Shownotes
Walmart has added Papa Johns to Walmart Express Delivery, making it the first national restaurant brand fulfilled entirely from locations outside of Walmart stores.
Chris Walton and guest host Josh Hahn discuss whether Walmart’s latest move is a clever way to bring customers into the app more often, or if they are solving a need that consumers never actually asked for.
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Transcripts
Number one, Walmart added Papa John's to Walmart Express delivery, making it the first national restaurant brand fulfilled entirely from locations outside of Walmart stores.
Speaker A:According to chain storage, Papa John's orders will be built directly into the Walmart app's dedicated Restaurants tab.
Speaker A:There's a dedicated restaurants tab and customers can bundle pizza, wings, sandwiches, sides and desserts.
Speaker A:My four favorite food groups or.
Speaker A:Yeah, no, four.
Speaker A:Nope.
Speaker A:Five favorite food groups.
Speaker A:Josh.
Speaker A:With groceries and household essentials in the same Walmart, order or order Papa John's all on its own.
Speaker A: e move follows Walmart's June: Speaker A:Papa John's delivery begins rolling out in select markets this fall, with plans to scale to thousands of participating locations nationwide.
Speaker A:Josh, this is also the A and M Put yout on the Spot Question of the Week.
Speaker A:We are starting out strong.
Speaker A:They're the sponsor of this headline.
Speaker A:They're doing the Put you on the spot question of the week just for you to start off the week.
Speaker A:Josh.
Speaker A:So their question is, what are the executives at DoorDash or UberEats likely thinking and planning right now after seeing this move from Walmart?
Speaker B:I love it.
Speaker B:So I got a hot take on this one.
Speaker B:I think they're saying.
Speaker B:Yeah, I think they're saying, bring it.
Speaker B:Are you.
Speaker A:Oh, wow.
Speaker A:Oh, wow.
Speaker B:I don't like this at all.
Speaker B:I'll be honest.
Speaker B:So I don't.
Speaker A:Wow.
Speaker B:I applaud Walmart.
Speaker A:Oh, my God.
Speaker B:For testing and learning.
Speaker B:Right.
Speaker B:I'm, I'm all for that.
Speaker B:Like, you have to go try things.
Speaker B:You have to fail in order to innovate.
Speaker B:Right.
Speaker B:But sometimes I think you can innovate yourself right into, right out of relevance.
Speaker B:And really by.
Speaker B:And I think, I think the reason I say that is because I think they're solving problems that consumers never ask them to solve.
Speaker B:Right.
Speaker B:It just feels to me like a strange place for Walmart to compete from my perspective.
Speaker B:And again, I'm an audience of one.
Speaker B:But I think about DoorDash.
Speaker B:I think about DoorDash, I think about Uber Eats and Grubhub.
Speaker B:You know, they've spent years building out, most importantly, I would say consumer behaviors.
Speaker B:Right.
Speaker B:Which are the hardest things to change.
Speaker B:But they have driver networks, they have routing technology, they have relationships with these restaurants.
Speaker B:And I just think there's danger in Walmart trying to become kind of this everything app versus the preferred app for what they're great at.
Speaker B:And so I think the other thing is that these are going to have to all become 30 minute deliveries, right?
Speaker B:You're talking about hot pizza here.
Speaker B:And that adds cost, it adds labor, it adds delivery costs, it adds customer service issues that cost money.
Speaker B:They're going to have to invest in tech, they're going to have to do all these things and they're going to have to promote it, which are more cost.
Speaker B:Right.
Speaker B:And so I don't, I don't see it adding a lot of new customers, which I think is the challenge.
Speaker B:I think it's a great perk for their existing customers, people that are in the app, using it all the time.
Speaker B:But, you know, I had this amazing moment with a consultant years ago in my career, okay.
Speaker B:And they made this, they made this comment that they said you need to work to enable things that already want to happen.
Speaker B:And so I've carried that with me my whole life where instead of trying to create new behaviors.
Speaker B:And so I've always been a fan of that.
Speaker B:And I just don't, I don't think it's a great move.
Speaker A:Wow.
Speaker A:Okay, Josh, you're coming in so strong on this one.
Speaker A:This is fantastic.
Speaker A:So you don't, you don't, you don't subscribe to the.
Speaker A:Your margin is my opportunity here, which is basically what Walmart's doing here, which is an Amazon slogan and saying, but that's essentially what Walmart's doing here.
Speaker A:So you're not, you're not subscribing to that with, in this case, for Walmart?
Speaker B:Not really.
Speaker B:I'll give you an analogy.
Speaker B:Okay, this is like, this is a weird one, but have you ever had like a recipe on the side of like, like a carton of beef broth or like a can of soup?
Speaker A:Yeah, for sure.
Speaker B:Okay, so it's, have you ever used one of those recipes?
Speaker A:Never.
Speaker B:Okay, so.
Speaker B:But why?
Speaker B:Because it's so convenient.
Speaker B:It's right there in front of you.
Speaker B:It's on the carton.
Speaker B:But the reality is there's a better way.
Speaker B:And so like cookbooks and recipe sites and all these things that consumers have like grown to adopt.
Speaker B:You're trying to change that behavior by saying, hey, now order your pizza through Walmart.
Speaker B:Which I, you know, and I think, again, I applaud them for trying and I applaud them for trying to, you know, for being innovative and going into this space and testing it out.
Speaker B:But I don't think long Term, you're going to shift enough behavior for it to be like really profitable.
Speaker A:Okay.
Speaker A:Wow.
Speaker A:Wow.
Speaker A:I don't.
Speaker A:Jesus, I don't even know where to start.
Speaker A:Okay, let's have this discussion.
Speaker A:Okay, so that's, that's interesting to me and I'm trying to keep an open mind too.
Speaker A:Like, that's interesting to me because like I've talked about on this show, probably even when you were last on too, because Walmart comes up, it seems like every week.
Speaker A:But I talked about how Walmart is becoming my default go to for the quick delivery.
Speaker A:Like if I need something quick, I'm going to Walmart.
Speaker A:The only place I'm not going to it for is restaurant delivery.
Speaker A:So to me, especially with the Dunkin announcement and now with Papa John's, like this thing had me at pepperoni.
Speaker A:Like, I'm like, I'm like ready to try it out and if it works, then I think I'm gonna love it and I'm gonna try it again.
Speaker A:Which does bring more people into the, might not bring more people into the app, but it brings more people into the app more often.
Speaker A:Right, that's, that's the key thing here.
Speaker A:And the whole play here is to ameliorate the cost of quick delivery in general for Walmart.
Speaker A:So I don't, Yeah, I think it's.
Speaker B:Good for Papa John's.
Speaker B:I think it's good for Papa John's.
Speaker B:And, and to be fair, like, I'm not an everyday Walmart shopper.
Speaker B:I don't use the app that often.
Speaker B:I can tell you, like when I go to their website, which I'll, which I'll try every now and then just to check it out.
Speaker B:There's a lot there.
Speaker B:And so like I as a consumer prefer simple experiences.
Speaker B:Right.
Speaker B:And I'm kind of, I think I'm just archaic or something.
Speaker B:And I'm like, no, I want it simple.
Speaker B:I want to have my go to's.
Speaker B:Whether it's, you know, food or whether it's grocery delivery or whatever it is.
Speaker B:When you start mixing them all together, it becomes really complex to navigate, I guess.
Speaker B:And then I'm sure it's complex on their end to just which, which, you know, if anybody can figure out, they can.
Speaker B:But it seems a little too complicated for me as a consumer.
Speaker A:Yeah.
Speaker A:Did you know there was a restaurant tab?
Speaker A:I didn't know that.
Speaker A:I haven't had a chance to try it out yet because I've been in Paris all week, but I didn't know that either.
Speaker A:And like, I'm Curious to see how that works.
Speaker B:Yeah, there's not one on the, on the website that I could find, but it might be because of my location, but I didn't look at the app yet, but that was, I mean, that'll make it easier for sure.
Speaker B:So I think it's all about the experience.
Speaker B:If they make it easy, you know, if they do a good job on the fulfillment side and they can manage the costs that are going to be required because it's all going to be 30 minute delivery, then more power to them.
Speaker A:Okay, so last question then, because, you know, I've been talking about this a lot on this show over the past probably year, year and a half, you know, kind of the, I don't even know if this is the right word to use or phraseology to use, but like the Venn diagram of the Walmart Supercenter, the QSRs in said Walmart strip center and drone delivery.
Speaker A:So like, you know, if Walmart can light that up and get all of these various QSR partners that are inside those strip malls into this arena over the next five to 10 years.
Speaker A:Does that make you like this move any more or less?
Speaker B:Yeah, it makes me like it more.
Speaker B:I think it does.
Speaker A:Okay, interesting.
Speaker A:Why?
Speaker B:Because I do think that their stores and their locations give them an advantage because they're so dense and know throughout the US and so I think that gives them an advantage.
Speaker B:But if the Papa John's, I, I mean, I'm sure they're doing it very strategically, but if this thing's like way down the road and it's not next door, it's a little harder to, to manage the delivery time, the fulfillment side of it.
Speaker B:I don't know.
Speaker B:But I do think, yeah, if they can.
Speaker B:When you think about strip malls and you have them close from a geographic, you know, location standpoint, I think it's good.
Speaker B:I think that that will help tremendously.
Speaker A:So does that then, does that then change your response to A and M consumer and retail group's question of like, you know, if I'm Door Dash or what do they say?
Speaker A:Door dash or, or Uber Eats?
Speaker A:Like am, am I still like, are you still sitting on the perch of, yeah, bring it, or are you like, hey, we got to figure this out.
Speaker A:We gotta, we gotta, we gotta, we gotta stop this before it happens?
Speaker B:I don't know.
Speaker B:I mean, you can already order a Papa John's pizza through Door Dash, right?
Speaker B:Or Uber Eats.
Speaker B:And so it's like they're already there.
Speaker B:And so in my mind it's like that you have to have a really compelling reason to go to Walmart instead of, you know, DoorDash, which you might use every day for more than just pizza.
Speaker B:And so I think it's, it's differentiating that experience and that's why I think it's so good for the everyday Walmart shopper, the really loyal ones.
Speaker B:I can see that being, being a benefit, but I don't think it's gonna, like, gain new customers because they now have pizza in their app, I guess.
Speaker A:Yeah, that's really.
Speaker A:Yeah, you've got me.
Speaker A:You've got me thinking my take, Josh, which is why I love doing this show because, like, you know, you gotta say, like, okay, can Walmart do this better than DoorDash?
Speaker A:Because DoorDash does a pretty darn good job.
Speaker A:We're going to cover them later in the show as well.
Speaker A:And I've been a big proponent of the Dash Dash pass too, in the past, so.
Speaker A:Yeah.
Speaker A:Wow, you got.
Speaker A:All right, Josh.
Speaker A:Wow.