Walmart online shopping for baby stuff7/23/2023 Another thing was they added video, and they had this idea that even if the video, even if the TV shows were not great, customers would see them as just an extra benefit. One was they added warehouses all across the country and that allowed them to get stuff to us quicker and more cheaply because it didn't have to go on a plane. Jason Del Rey: So Prime, it was not super successful early on, but over time a couple of things happened. So how did Amazon end up making Amazon Prime such an appealing option for so many people? When Amazon first introduced Prime in 2004, the folks at Walmart mistakenly believed that not a lot of people would pay $79 a year for it, but in fact, it turned out to be a crazy good value proposition. Michael Calore: With regards to pricing structures, I think that we have to talk a little bit about Prime. And that, at some point in Amazon's early history, became a key part of how they thought about pricing online. It'll be part of your DNA, part of what consumers expect and trust when they shop with you. Essentially, if you keep prices very low, you really don't have to advertise very much because customers will realize this. And then the last one that comes right to mind is-Amazon has changed on this front over the years, but Jeff Bezos saw in Walmart the idea that your pricing strategy is your marketing strategy. And that is something that comes from the early days of Walmart as well. But it is better to move quicker with the best amount of information you have than to hem and haw about new product decisions, new initiatives, and the like. So we might be able to be 80 percent sure that this new idea is great in about two weeks of planning, and maybe it would take us six months to be 100 percent sure we have the right plan. Essentially it means we need to move fast when we're trying new things. So frugality was something that was a big deal for Sam Walton, the founder of Walmart, and for Jeff Bezos as well. And if we're spending any excess money internally or on packaging or, I mean, on employees was in another way, then that is all going to lead to higher prices, and that's a no-no. And that comes from a Walmart idea of everything being about lowering the price for the customer. Amazon is not the Silicon Valley tech companies that have free lunches and dry cleaning on campus and the like. So that's the idea that when you're running your company internally, you shouldn't have any excess spending. Jason Del Rey: So there are a couple of key ones from the early days of Amazon that we could say Jeff Bezos "borrowed" from Walmart. Which tenets of Walmart's business informed Amazon's strategy in the early days? So in your book, you write about the ways in which Amazon actually borrowed from the Walmart playbook. And then in the second half of the show we'll get to the future of shopping-all of the wild, invisible, contactless ways that retailers want to keep us coming back to stores. So Jason, in the first part of this show, I want to talk about the ways not only in which Amazon and Walmart are so obviously different, with Amazon being focused on ecommerce and Walmart having these huge stores, but also the ways in which they're similar and how that has changed commerce. Why are we talking about the business of Amazon and Walmart on the Gadget Lab?" But the fact of the matter is we all shop, every single one of us, and these retailers, perhaps more than any retailer in American history, have forever changed the way we buy things. Some of you might be thinking, "Well, this isn't a Titans of Industry podcast. There's a whole story there about the last time we had dinner together, but we'll save the steak story for later. Jason Del Rey: Lauren, always, always a pleasure, whether over dinner or behind a mic. It's so great to have you on the Gadget Lab again. And not to bury the lead here, but perhaps most importantly, Jason is a former colleague of mine from the Recode days. Jason is the author of a new book called Winner Sells All: Amazon, Walmart, and the Battle for Our Wallets. Lauren Goode: We're also joined by longtime ecommerce and retail reporter Jason Del Rey. Lauren Goode: All right, let's talk about this. Michael Calore: OK, you have my attention.
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