How Walmart And Amazon Are Becoming Clones Of Each Other


If you want to know what the Walmart of the future looks like, it’s best to look at Amazon for a rough sketch.

The same goes for the reverse.

As Walmart and Amazon become fiercer competitors, they’re starting to look more and more like each other. Walmart continues to move its business online as Amazon moves offline, and they’re becoming the first two truly omnichannel retailers in the process.

Walmart is still the indisputable leader offline as the largest retailer in the US — and possibly the world— by sales, while Amazon still dominates online.

 

As businesses start to think about an equilibrium between online and brick-and-mortar, there’s no better time to consider what America’s biggest retailers will look like in the future.

One of the most obvious recent examples is the development of in-home delivery programs. Walmart was first to the punch, launching its limited pilot program with August Home in September. Then, in October, Amazon leapfrogged it with a nationwide rollout of its own program, which is called Amazon Key.

Though it’s unclear who started developing the ideas first, the fact remains that both retailers were working on what amounted to the same service at exactly the same time.

There are larger examples from just this year

Amazon’s purchase of Whole Foods and its 450 stores put it on the map with a significant brick-and-mortar presence. That only makes Walmart and Amazon more similar in that they both have physical stores in their portfolio.

Even more similar is the approach that Amazon has taken with its new acquisition, steeply slashing prices of Whole Foods’ most popular items to bring customers in and increase store traffic. The strategy is likely familiar to anyone who knows Walmart’s story.

2017 was also the year that Walmart got serious about online shopping. Early this year, it started offering free two-day shipping with every $35 purchase.

Yes, free two-day shipping — the same perk that millions of Amazon Prime members enjoy. The only difference is that Walmart’s version calls for a $35 minimum order, and no membership is required.

Amazon’s vast product offering is one of the biggest competitive advantages it has over other retailers, but Walmart has nearly tripled its online assortment over the last year, going from eight million to 23 million items.

Those initiatives have caused Walmart’s online sales to soar, and they’re increasing at a steady clip. As of its investor’s conference, e-commerce sales were up over 60%. It’s now making a statement that it’s a serious online player.

 

There are smaller examples, too

In clothing, both retailers are reaching for wealthier shoppers. Walmart is teaming up with Lord & Taylor to sell designer goods online, while Amazon is trying to lure luxury brands, like Nike, to its site with better terms.

Amazon has made a big push with its Alexa platform, working to get its Echo device into as many homes as possible. Not to be outdone, Walmart has partnered with Google and its Express platform, which enables voice shopping via Google Assistant. Customers can link their Google and Walmart accounts to enjoy unique features on the platform.

Voice shopping hasn’t yet found mass appeal, but both retailers are in the ready position for when it does.

 

Still, each retailer has its strengths and weaknesses

A good example of this is grocery pickup. Both retailers offer this, but Amazon currently only has two locations (both in Seattle) where customers can do it, while Walmart has opened more than 1,100 of them.

While Walmart has gotten grocery logistics down to a science, Amazon has traditionally struggled with it, at least prior to its acquisition of Whole Foods.

Walmart has a much larger network of grocery pickup locations.Walmart

Walmart’s pickup-associated discounts, faster in-store returns, and pickup towers make it easier for customers to buy online and get their items immediately.

But Amazon’s half-million products still dwarf anyone else’s offerings, and its ability to sacrifice margin to protect market share is formidable.

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How Walmart And Amazon Are Becoming Clones Of Each Other

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