If you’re in eCommerce, there’s a small chance that you’ve missed the battle of the behemoths – Amazon and Walmart. Both eCommerce giants have been rampantly buying smaller organizations off late, trying to fortify their retail offerings and infrastructure. With Amazon’s takeover of Whole Foods Market and Walmart’s purchase of Bonobos, these giants have made it plenty clear that they’re locking horns for the global retail market. So, which team looks more likely to win from today as a standpoint? Let’s explore.
How Walmart competes against Amazon
In terms of revenue, Walmart is substantially ahead of Amazon. In fact, Walmart is 300% larger than Amazon with its revenue crossing $500 billion in 2017. This allows the eCommerce giant the luxury of placing a price squeeze on Amazon.
However, a good part of Walmart’s revenue comes from its grocery store, which Amazon can now compete with because of the Whole Foods acquisition. In fact, Amazon can do more than match Walmart as it offers customers exclusive products from private label apparel brands. But Walmart hasn’t taken that threat quietly, responding with its own private-label apparel brands and expanding to bedding.
In summary, Amazon and Walmart are constantly working towards dethroning each other as the highest revenue-generating eCommerce platform. For Amazon to permanently outlast Walmart, the online hypermarket has to excel in food and clothing, in which Walmart is currently leading. The battle between Walmart and Amazon is likely to last for years, with Jeff Bezos trying to expand beyond 468 Whole foods stores and Walmart attempting to respond by improving online operations for 11,500 grocery stores. Ultimately, the war will be won by the giant that truly differentiates their offerings and experience, both.
What Walmart is offering to compete with Amazon
During the second quarter of 2018, Walmart mounted a strong offense against Amazon’s eCommerce shopping experience that seemed to have worked wonders. Walmart reported its highest quarterly comparable sales in over ten years. Walmart’s offline stores gained 2.2% more visits, as did the average money spent by visiting customers. So, what exactly did
Walmart do to achieve this success?
Walmart created an omnichannel customer experience approach that brought digital technology into brick-and-mortar stores, while linking the offline store experience to online shopping. The goal was to create a seamless shopping experience for customers, regardless of how they preferred to shop.
While Amazon is heralded as the best in online eCommerce, Walmart has massive coverage on the ground. Close to 90% of the US population has a Walmart within 10 miles of their residence. This has allowed Walmart to launch a unique omnichannel shopping experience that Amazon can’t compete with.
Simultaneously, Walmart is also expanding its online presence by acquiring stores with a massive online presence such as Jet.com, Bonobos, and Modcloth. These acquisitions have made room for innovations such as Pickup, which allows customers to make purchases online and then pick up ordered items from brick-and-mortar stores. While Amazon is implementing programs such as Amazon Go to promote self-service and convenience in offline stores, Walmart is also testing the same concept with Endless Isles. Walmart’s Endless Isles allows customers to browse through an entire Walmart store’s inventory using a digital interface placed at the end of each aisle.
To compete with Amazon Prime, Walmart introduced their ShippingPass service, which was later scrapped due to lack of engagement. Instead, Walmart offered free shipping for orders greater than $35. Many of Walmart’s stores also give customers the option to altogether avoid shipping costs by having products shipped to local stores. The customer then gets an automated phone call, SMS, or email, notifying them of the arrival, so they can collect it at their convenience.
Walmart even encouraged adopting of in-store pickups by giving customers who chose this option discounts. Heavy goods were given the most discounts to encourage more in-store pickups.
Through its acquisitions and brick-and-mortar initiatives, Walmart is holding its own in the battle against Amazon. Only time will tell which one of these giants will take the win.