Amazon vs Walmart.
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In this episode, we look at Amazon and Walmart, the 2 kings of retail. How do they compete against each other? by undergoing significant changes, powered by technology and changing customer preferences.
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Walmart and Amazon, the kings of retail, both offer their customers online and offline shopping options.
Walmart is the undisputed champion of retailing; the biggest retailer in terms of revenue, physical stores, number of employees and with a rich repository of customer shopping data.
Amazon is to eCommerce like Google is to search. It nearly single-handedly revolutionized online shopping since its launch in 1995.
It is the largest internet company based on revenue and has extensive data about online shopping habits.
Amazon’s growth has been nothing short of phenomenal:
• Revenue CAGR of 24.8% over the past 10 years
• Consistent eCommerce market share growth year over year
• Investment in innovation
Bold acquisitions aimed at increasing their physical store footprint
Given such a powerful competitor, can Walmart effectively compete in the online space?
The name of the game is diversification. Walmart has made decisive moves to successfully compete with Amazon, starting with their partnership with Google in the summer of 2017.
This partnership helps them monetize their vast shopper behavior data, and gives them access to more online shoppers, where they can compete on perks like free shipping.
They have also:
1. Brought in employees with deep digital skills
2. Put significant investment in technology to better manage their operations
And made acquisitions in eRetailing that close their capability gaps
And since 90% of customers are still making their purchases in physical stores, Walmart will continue to hold massive influence in trade negotiations
Finally, Walmart will continue to monetize their web traffic by offering valuable advertising space on their website, referred to as retail digital media
Predicting the future is hard, but one thing is clear: retailing is undergoing significant changes, powered by technology and changing customer preferences.
And while it may seem that Amazon is a runaway winner in eRetailing, Walmart is surprisingly not far off. They expect eCommerce sales to grow +40% in the coming FY, their biggest source of growth.
Is this clash of titans going to have 1 winner?
We believe there is room for 2 ... To be continued