TWO RETAIL GIANTS, ONE GOAL: THE ULTIMATE SHOPPING DESTINATION
Amazon and Walmart are two of the best known companies in the world, and both have the same goal in mind: become the top seller of products in the United States—maybe even the world.
In the tough competition to be the top retailer, the two companies have recently been locked in a battle to try to one-up each other. But their approaches are vastly different as they capitalize on their foundations as a company and particular strengths. Amazon started its campaign online as a seller of books, and has only recently begun to move into the brick-and-mortar space, while Walmart started as the price-slashing brick-and-mortar establishment that has only recently ramped up its online and omni-channel efforts, in part because of a new partnership with Google.
Both companies seem aware of how important a multi-pronged approach is to the overall success of their brand, and both are taking strikingly similar approaches despite their drastically different starts. As each company races to get to the center of the playing field—the perfect blend of online and brick-and-mortar, pickup and delivery—here’s what you should be paying attention to.
Picking up the slack with partnerships
While both Amazon and Walmart made some pretty huge strides on their own, both retail giants have recognized that the path to success is not a solitary one. To cover their respective weaknesses, they’ve both invested heavily in partnerships outside their realms of expertise.
Walmart wasn’t entirely new to the online space when it acquired Jet.com in 2016, but the acquisition was seen as its first legitimate, aggressive push into the space. Today, it’s partnership with Google displays the same thing: a desire to master the online realm. Google may not be the master of e-commerce, but it’s dominated the internet space, something that Walmart struggled to understand.
Similarly, Amazon has made its own push into brick-and-mortar, but only recently started making headlines for that push. Its physical bookstores are still novelties, only popping up in a couple of locations across the country, and its Amazon Go store, while hugely innovative, is more a feature of Amazon’s corporate campus than something likely to expand to any real scale in the immediate future. But with its purchase of Whole Foods, Amazon suddenly holds some weight in the brick-and-mortar shopping game. While Whole Foods’ shopping demographics are different than Walmart’s, it will be interesting to see how the “usual” shoppers at each store evolve as their partnerships mature.
Taking retail technology to new levels
All battles have weapons, and a retail battle this big is no exception. In this case, new and innovative forms of technology seem to be the tools of choice.
First and foremost, both companies seem to be betting on the popularity of voice-activated home assistants. Amazon’s Echo was an early leader in this field, allowing those who purchased the device to order products from Amazon with a simple verbal instruction. With its purchase of Whole Foods, Echoes are now being sold in physical stores, and customers can use them to order their groceries from the comfort of their home.
For Walmart, its big break in this technology came through its partnership with Google. The Google Home, Google’s own attempt at the home assistant, will now support ordering through Walmart, with Google Express taking over the delivery.
Beyond home assistants, Walmart and Amazon have been warring over ever-more advanced warehouses, delivery methods, checkout methods, and other retail technologies. Some of the most notable ones include patents for blimp warehouses, underwater warehouses, and a network of underground, package-delivering tunnels.
Package pickup and delivery
Only part of the retail experience is driven by where consumers shop. The other is driven by how they get their purchases. Is it in-store with classic checkout, pick up in-store after buying online, or through a delivery service? Each has its advantages, and each company is better at its strengths. Amazon has dominated the delivery aspect, but Walmart has been a leader in the in-store pickup movement.
Between package pickup towers and drive-through pickup lanes, Walmart is testing a variety of new solutions for pickup, something that’s only possible because of their vast number of brick-and-mortar stores. On the flip-side, Amazon’s warehouses allow them to deliver in a timely manner—within two days with no extra charge, if you’re a Prime Customer.
To give customers the well-rounded experience they want, both retailers want to perfect both tactics.
Grocery continues to anchor retail
Just as grocery stores are recruited as anchors in large shopping centers, it seems that grocery may be the anchor that decides whether Walmart or Amazon wins the retail battle.
No matter your lifestyle, hobbies, or personal interests, everyone spends money on food. It makes sense that this is an area that both retailers, but especially Amazon, are pushing at aggressively. Walmart has been the country’s largest grocer for some time, often with some of the lowest prices on the market. Amazon, on the other hand, only recently acquired Whole Foods. However, it immediately lowered the stores’ prices on select products.
Delivery and pickup for grocery have yet to get firm footholds in the market, but it’s likely whoever perfects the most convenient, low-cost form of grocery shopping—whether it’s Walmart’s “deliver while you aren’t home” model, its new offering of Terra’s Kitchen and other meal kits in December, or Amazon’s soon-to-be-available Meal Kits—will likely come through as the stronger retailer.
Creating the ultimate customer experience
Retail’s evolution has lent itself to two different approaches that are both trying to reach the middle first. Amazon, the online retail giant, wants a better hold over physical retail and distribution chains, while Walmart wants a shot at the online retail space and delivery.
It’s difficult to say that one currently has an edge over the other. Walmart has over 5,000 stores, a daunting number for Amazon to catch up to, and one that gives them the advantages of convenience and low prices because of their distribution networks. Amazon, however, has nearly perfected the art of online shopping and delivery, and is a technology company in its own right.
For shoppers, this competition is a win for them. They reap the rewards with competitive prices and get to experience the newest technology. All in all, both companies are making great strides toward the center to give customers the full omni-channel experience, low prices, and convenience they’re hoping to get from their retailers.