Digital Economy Blog

 The Battle Between Walmart & Amazon

Walmart dominates the physical space and Amazon leads online retailing. Whilst Walmart has been around for 30 years longer, the two retail giants now fight for the same customers. The two brands compete on everything from innovation to digital growth, logistics and sustainability. Up until 2015, e-commerce was not considered a viable direction to transcend Walmart. However, to compete directly with Amazon, Walmart decided to leverage its 13,000 physical stores worldwide and its title of being the world's largest retailer to become one of the world's largest and fastest growing and most dynamic e-commerce organisations.

In order to cross the intersection between physical and digital, firstly, Walmart needed to create that differentiation between the two modes of retail. Consequently, Walmart online strategy was to build the best-in-class e-commerce and marry that with its organisational assets. Essentially, Walmart's goal was to satisfy the customers' needs with the products they are selling them. Therefore, Walmart adopted a holistic approach to retailing in which they would help their customers at each stage of the purchasing process - finding what they want, what they need, when, where, and how they want it.

Instead of outsourcing its e-commerce development to low-cost countries and other domestic firms, Walmart decided to develop its online operations within the company, in part by acquiring technology companies. Neil Ashe, the organisations chief executive, explained that in order to deal with an ever-changing consumer, this meant that Walmart had to pursue a customer-centric and change management orientation. In essence, Walmart had to ensure that their customers were placed at the forefront of their philosophy and ideas. To execute this, Walmart needed to have the ability and nimbleness to build and invent, but most importantly, to have the scale to do what's required of them in providing a service that will benefit their customers. Ashe stated that to be at the size and scale of Walmart, it was not sufficient of the retail tycoon to be a systems integrator in that process.

A big step in closing this gap between Walmart and Amazon in online shopping revenue, Walmart acquired Jet.com for $3.3 billion. With this acquisition, this enabled Walmart to acquire a unique business model as well as access to urban customers, and the fact that Jet.com is a digitally native brand in the US, this meant that Walmart could expand its online reach further. In addition, its partnership with Google Express in 2017, and its specialty apparel brand acquisitions to attract millennial customers will further create a reason for customers to shop at Walmart instead of Amazon, according to CEO, Marc Lore.