Battle of the Retailers!
In one corner we have Amazon, the undisputed champion of online retailing, and in the other Walmart, the biggest brick-and-mortar retailer in the world. Their strategies starkly contrast, but their goals are similar: expand their omnichannel network. Amazon vs Walmart: it’s on!
As Amazon adds offline capabilities, Walmart is acquiring digital talent. Recently, Amazon announced that it was acquiring the Whole Foods market for $13.7 billion, just a few hours later; Walmart announced an acquisition of menswear e-tailer Bonobos. Amazon and Walmart might once have existed in parallel universes, but these days they're in a price war. Both giants are now seeking to make investments to compete on the other's turf.
Amazon, which was founded on July 5, 1994, by Jeff Bezos, is the largest online retailer and a prominent cloud service provider.Amazon leads the battle with its algorithmic approach and real-time data. Amazon’s capacity to revolutionize the in-store experience and triggered innovation is unprecedented. The goal behind acquiring Whole foods, the high-end grocery chain, was to hyper-local delivery services. Meanwhile, the company is running another brick-and-mortar experiment, Amazon Go, a concept where shoppers pick up their food as you would a package at the post office.
But that’s only the first step!
Amazon’s long term plan is to reduce delivery time and increase efficiency. That's where Amazon’s drones and self-driving delivery cars step in. This quiet program has been working on the delivery process for over a year. It is the start of an incredible wave of innovation across the grocery/shopping landscape.
Don’t count out Walmart just yet!
It may have started out old school but it has nearly 4,700 stores in the U.S. and more than 1.5 million employees. Amazon dominates online retail while Walmart controls brick-and-mortar.
“Offline Retail is absolutely not dead. Offline Retail is just going to look different in the future”
- David Bell, Wharton marketing professor
Walmart is moving to online sales, armed with open source software such as OpenStack Cloud. Its acquisitions in eCommerce including Jet, shoebuy.com, Moosejaw, ModCloth, and Bonobos clearly states its intentions to increase its omnichannel network and grow their eCommerce data stack. Walmart is the largest private employer in the country — and not just among retailers. Walmart has the largest footprint in terms of real estate. Cutting edge technology and cloud platform give Walmart an advantage, and not to forget powerful brick-and-mortar presence. By most measurements, Walmart is still at the top.
Amazon Vs Walmart, Who will win? It’s too early to tell. Both giants are expanding their omnichannel network because omnichannel consumers are simply more valuable than non-omnichannel consumers. Some areas that would eventually determine the winner are
- Supply chain mastery
- Claiming new turf
- Brands/retailers support of lower margins
Ecommerce would kill traditional retail…or this is what people thought, but offline retail still prevails. In an omnichannel network, Amazon currently has the advantage over Walmart, but this can change at a moments notice! 52% of US Internet users still shop in-store and Walmart has an extensive brick-and-mortar presence. Amazon.com Inc. may have a significant brick-and-mortar presence and Walmart might increase its eCommerce consumer stack, the only remaining question is when and how?