A look at what will happen next in the world economies
Thursday, April 11, 2013
Walmart Vs. Amazon: It's About To Get Interesting
Amazon vs Walmart in the internet sales game. Even Walmart is feeling the heat. Aivars Lode
In the case of Walmart Vs. Amazon, it’s about to get interesting.
Let’s put aside the much discussed news leak that Walmart is considering using its own shoppers as delivery people, providing some kind of incentive to drop off online orders on their way home from the store.
It’s not likely to happen, there are far too many unattractive variables. But it shows the retailer is thinking outside of the box when it comes to competing with its online competition, Amazon.
Walmart already offers in-store pick up and just expanded its test of a locker system where shoppers can order online and pick-up in the store without waiting in line. It’s similar to Amazon’s recent deal with Staples and 7-Eleven to do the same.
The big box behemoth may not be a start-up, but it does try to think like one with its Walmart Labs division. That group is developing Pangaea, a global technology platform, scan and go apps that let shoppers buy in store via a smartphone, and online operations in growing markets outside the U.S. such as Brazil and China.
Wal-Mart is still testing same-day delivery in four cities. The program uses stores as fulfillment centers and if expanded, could turn 4,000 stores into bases for same day delivery.
According to Internet Retailer, Walmart is the fourth largest e-commerce retailer and expects to generate $9 billion in global e-commerce revenue in its current fiscal year, ending Jan. 31, 2014.
Compared to Amazon, that $9 billion is pocket money. Amazon’s sales for the fourth quarter alone were $21.27 billion.
But take a look at the profits and some other key indicators. Income is slowing, expenditures are up and there’s an Marketplace Fairness Act on its way to force the collection of state sales tax. Sooner or later, people will start to notice the lack of earnings.
Amazon is building out a physical infrastructure to provide same day delivery, it doesn’t have Walmart’s existing store base to work from.
It’s too early to call a winner in the retail race. Maybe there’s room for both, although they don’t think so. In the case of Walmart Vs. Amazon, it’s about to get interesting.