Netflix is making an all-out effort to get licensed merchandise from hit shows like Stranger Things, CoComelon and Squid Game into consumers hands ahead of the holidays with a partnership with Walmart.
Walmart has created a dedicated online hub for selling Netflix merchandise so consumers can easily find the clothes and toys as Netflix seeks to grow its retail sales. This is a first for streaming giant, Netflix, and it’s aimed at getting merchandise greater visibility. The dedicated online store does not extend to Walmart brick and mortar stores.
Jeff Evans, Walmart executive vice president of electronics, toys and seasonal merchandise, said this partnership is a way for the retail giant to keep its finger on the pulse of the hottest fashion, music and toy trends emerging from hit Netflix programs. The move was a smart one for Netflix, according to Carol Spieckerman, CEO of Spieckerman Retail. She said the partnership allows the companies to each do what they do best.
“Netflix brings a deep understanding of its various properties and fan bases while Walmart leverages its physical and digital scale to make the program sing. Both Walmart and Netflix benefit from the diversification that the program brings. Netflix expands into products harnessing the physical and digital presence of a massive, global retailer. Walmart gains relevance with, and insight into, Netflix’s multi-generational fan base which will likely result in additional purchases with Walmart,” Spieckerman told Talk Business & Politics.
Analysts have said Netflix is under pressure from investors to grow revenue at a time when subscription sales seemed to have peaked. This is one way the streaming company can grow revenue without raising subscription rates and risk losing market share.
Walmart has been selling Netflix merchandise since 2018 but said the new online hub will be a one-stop-shop so consumers won’t have to sift through millions of items also sold on Walmart.com. Also, Walmart has some exclusive and first-to-market items with this deal.
“At Netflix, we love it when stories transcend screens and become part of people’s lives,” said Josh Simon, vice president of consumer products at Netflix. “Walmart gave us the opportunity to deliver a shopping experience that sets a new level of innovation for the entertainment consumer products space.”
Simon said this is the company’s first digital storefront with a national retailer, in addition to a new direct-to-consumer business Netflix recently launched. Evans said Netflix fans are passionate about their favorite shows and Walmart saw an opportunity to bring those stories home in new ways.
He said the hub will also soon include a crowd-sourcing feature called “Netflix Fan Select” that will allow fans the chance to vote for the future merchandise they would like to see from their favorite Netflix titles. Items that garner the most votes will eventually be offered with help of supplier partners that will develop them at scale.
Spieckerman said partnering with Walmart was a great decision by Netflix. Walmart will give the products the attention they deserve online and in-store. The program would likely get lost in the shuffle on Amazon’s marketplace, not to mention the lack of physical presence. Target would have also been a good choice from a brand awareness standpoint yet from a volume potential standpoint, Walmart was the obvious choice, she said.
Netflix will report third-quarter earnings on Oct 19 and analysts expect another 3.5 subscribers were likely added in the quarter, an increase of 59% over the growth in the year-ago period. With production delays in 2020 and into 2021 the streaming giant burned through $8 billion of cash in the first six months of this year. Netflix shares (NASDAQ: NTFX) rallied on Monday’s announcement with Walmart to an intraday high of $636 per share. The stock fell back Tuesday, losing $2.10 per share to close at $624.94.