Survey: Walmart Is Now the Consumer Favorite Over Amazon
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Walmart’s targeted efforts to keep up with Amazon seem to be working, according to a new report from First Insight.
According to the retail analytics firm, 55% of shoppers it surveyed indicated they favor Walmart over Amazon in 2019, up from 47% last year.
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At the same time, First Insight found that consumers are making fewer purchases on Amazon. In 2017, 80% of Amazon Prime members said they bought items from the site at least six times a month. But this year, 40% of Prime members said they only shop Amazon once or twice a month, if at all.
Over the past few years, under the helm of CEO Doug McMillon, Walmart has made a concerted push to stave off competition from Amazon, as well as grocers and the off-price channel. To adjust to a shifting retail climate, Walmart upped its employee retention efforts, pledging and enacting wage increases; worked to reduce excess inventory in its stores; and bolstered its e-commerce offerings.
On the earnings front, Walmart reported revenue growth of 2.8%, across online and brick-and-mortar, for the second quarter. Its strongest gains were in the e-commerce space, where sales climbed 37%. As for the company’s Q3 earnings, they will be reported Nov 14.
Still, there have been some challenges for Walmart’s recent acquisitions. The company acquired e-tailer Jet.com in 2016 for $3.3 billion, but the site had decreased traffic and sales in 2018. Now, Walmart is folding Jet staff into its Walmart.com team, although it will retain the Jet brand. And, just last month, the retail giant agreed to hand over women’s apparel company Modcloth, which it acquired two years ago, to brand investment firm Go Global Retail. Although terms were not disclosed, the deal is expected to close late this year.
With the race for holiday shoppers currently underway, Walmart is looking to compensate for a shortened holiday season with a longer discount period. The company rolled out its Black Friday promotions on Oct. 25 and will offer free one-day shipping to shoppers — no membership required.
Meanwhile, Amazon expects to spend $1.5 billion by year’s end on costs related to speeding up its Prime members’ benefits from two-day to one-day free shipping.
The e-comm behemoth disappointed investors in Q3, sending its shares tumbling last week, after it posted profits of $4.23 per share, well below the $4.62 analysts had expected. It also marked Amazon’s first year-over-year earnings decline since June 2017, with profits dropping to $2.1 billion compared to $2.9 billion a year ago.
Nevertheless, even with Walmart’s latest moves, Amazon remains one of the world’s largest publicly traded companies, with a market cap of about $888 billion. Walmart’s market cap is about $337 billion.
First Insight surveyed around 1,000 shoppers, including consumers with and without Prime membership, in December 2017, September 2018 and September 2019.
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