Amazon vs. Walmart Strategy

Author: 8th and Walton

walmart-associate

Amazon has surpassed Walmart in market value, Amazon’s market value was recently estimated at about $264 billion, while Walmart’s was around $233 billion.

Walmart is no longer the largest retailer in the world.

Sure, Walmart is still the largest in many ways. Walmart is the largest private employer in the country — and not just among retailers. Walmart has the largest footprint in terms of real estate. By most measurements, Walmart is still at the top.

But Amazon is a serious rival — some would say the most serious rival. Online, Amazon is still way ahead of Walmart: in 2014, Amazon’s had $89 billion in sales compared wit Walmart.com’s $12.2 billion.

Walmart’s focus on ecommerce is definitely paying off, and over time Walmart may overcome Amazon as it has overcome so many brick and mortar competitors.

But Walmart.com has an advantage over Amazon that can’t be gainsaid: its physical storefronts.

Walmart’s Bao Nguyen was quoted in Digiday as saying that Walmart’s digital strategy is optimized not only for shopping but also for the research phase of shopping, which is now primarily conducted online. Most actual purchases are still made in physical stores, but people who are planning to shop in physical stores normally go online first. Many purchasing decisions are now made online, at the Zero Moment of Truth.

Walmart shoppers go to Amazon to research products and then go to Walmart stores to buy them. This can be considered a free service Amazon provides to Walmart, which has only 1% of the online assortment Walmart has.

Walmart.com is streamlined and doesn’t present shoppers with too many choices. Walmart’s customer-centric culture and deep understanding of the Walmart shopper allows Walmart.com to become a comfortable extension of the store, and may keep Walmart on top as a physical retailer no matter what Amazon does.

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