Last week, Wesfarmers dropped the gauntlet. By announcing a partnership with The Walt Disney Company, and creating an easy way for customers to get access to the Disney+ video streaming service, as well as its own OnePass subscription shopping service, Wesfarmers has taken aim at Amazon Prime. The new subscription deal, which costs $14.99 a month and will be available later in December, saves customers $3 a month, and will likely provide shared access to data for both businesses’ custo
customers.
With Disney+ and OnePass together, customers will get access to free online delivery across Target, Kmart, Catch, and Bunnings (with Officeworks soon to join), as well as the ability to watch the growing library of content on the streaming service: which already holds some of the world’s biggest names in entertainment.
“We know how important value is to our customers and our new OnePass membership program offers free delivery across some of Australia’s most trusted and best-value brands,” Wesfarmers’ MD of OneDigital Nicole Sheffield said.
“Our exclusive partnership with Disney+ will provide Australian families with even more value and access to world-class entertainment.”
The deal comes at an interesting time, according to advertising firm Spinach’s general manager and media director Ben Willee, with cost of living pressures forcing many Australians to weigh up each expense’s total value.
According to a recent survey by Deloitte, customers are more likely to cut spending on eating out, alcohol, tobacco, and even groceries, before cancelling media streaming services – meaning OnePass may be buoyed by Disney’s stickiness.
Goliath v. Goliath
A key goal of the new deal, beyond providing more value for money to customers, is to take Amazon’s Prime membership on head first.
Amy Konary, chair of Zuora’s Subscribed Institute, told Inside Retail that OnePass was already fashioned in Amazon Prime’s image, and that adding Disney+ completed the picture.
“Retail shoppers really like no-cost delivery, but I think many want something more,” Konary said.
“Amazon Prime’s offering is so strong, and offers a range of add-ons – such as free shipping, TV and movies, gaming, music and podcasts, e-books – that challengers will likely have to collaborate to compete.”
While Disney is the first of OnePass’ partnerships, it’s unlikely to be the last. Wesfarmers recently invested $100 million into OneDigital, the business’ digital arm which houses OnePass, which suggests that more may be on the way.
“The fact that Wesfarmers owns other large retailers – including Priceline and Officeworks – seems to be an ace up their sleeve,” Konary said.
Netflix next?
It’s not just that the collaboration is a good deal, or that it has scope to grow, according to Pattern’s general manager Merline McGregor. It could set the stage for more partnerships between retailers and other service providers.
“By leveraging two strong and complementary brands, the partnership has served to strengthen both products without the risk of cannibalisation,” McGregor told Inside Retail.
“I’m sure this won’t be the last collaboration we see where two or more brands open up their core value propositions to each other to strengthen their position in the market.”
Willee added that he expects more streaming services to deepen their partnerships with retailers in the coming months: with Netflix likely to be next.
“The fight for eyeballs is heating up and any additional value streaming services can provide will make a big difference to perceived value,” Willee said.
“This partnership… isn’t just a direct shot over the bow of Amazon Australia, it’s also a clear move on Netflix. When launching a virtual service, a retail network can make a big difference [and] it appears Disney+ has just taken out the biggest retailers in the country.
“Expect to see Netflix making some big announcements soon. They are under enormous pressure to increase revenue, [and] advertising is clearly in their sights.
“That could well expand to retail partnerships.”