The Amazon-Wal-Mart Retail Battle: Everything You Need to Know
Amazon and Wal-Mart are vying for the position of everyone’s go-to retailer and their attempts to one-up each other on acquisitions and innovations, among other things, has made for rapid changes at both companies.
By annual revenue, Wal-Mart’s $485.9 billion last year has Amazon’s $136 billion beat, not to mention it has more than six times the number of employees, but Amazon’s growth has far outstripped that of any other retail player, online and off.
So it’s no wonder that Wal-Mart would be eager to get in on that growth, if nothing else to ensure its future existence.
To that end, the original big-box shop is becoming more strategic than ever and Amazon, not one to be outdone, is responding in kind.
Here, WWD looks at the three main areas of the growing Amazon-Wal-Mart rivalry:
Acquisitions
• Wal-Mart Moves: Since last year’s $3.3 billion acquisition of Jet.com, Wal-Mart has snapped up young, digital-first brands such as ModCloth, ShoeBuy and Bonobos. It’s also put Bonobos chief executive officer Andy Dunn in charge of digital brands, meaning further acquisitions are likely, given Dunn is said to have his eye on scores of companies that could add to Wal-Mart’s market share. Already, talks with beauty box company Birchbox are said to be in the works.
• Amazon Moves: Amazon has had a busy year as well. First, it struck a deal to acquire Souq.com, the largest e-tailer in the Middle East, then came a $13.7 billion agreement to buy Whole Foods. If that acquisition is approved, Amazon will suddenly be the operator of more than 400 stores, making it much more competitive in the land of brick-and-mortar retail, which it’s struggled to break into. It also seems to be wanting to move its image away from utilitarian catch-all web site to one with a higher-end. A tie-up with luxury beauty site Violet Grey is said to be imminent and branding veteran Christine Beauchamp is now heading up Amazon Fashion.
Innovation
• Wal-Mart Moves: After changing up the look and operation of stores, Wal-Mart may be able to offer customers virtual and even automatic shopping. In the meantime, the retailer is looking to make shopping as “frictionless” as possible and is pushing ahead with initiatives for automated pick up stations, machine learning-based pricing and the elimination of the traditional checkout process.
• Amazon Moves: It’s brought artificial intelligence to the online shopping masses with its Alexa-enabled speakers and cameras, launched its own social media platform for dedicated Prime members and hopefully influencers, launched a slew of private label brands and even patented a system of “on-demand” production of apparel, while turning a random day in July into a mid-year shopping bonanza. If Amazon has a “thing,” innovation is it.
Shipping
• Wal-Mart Moves: Wal-Mart has had a bumpy time trying to keep up with Amazon’s shipping prowess, but early this year, it made two-day shipping on orders more than $35 free. It’s also launched an “easy reorder” app that integrates online and in-store purchases for pain-free ordering and delivery and it’s set to use store associates as end-of-the-line delivery people.
• Amazon Moves: Never one to undermine the mundane, Amazon effectively set the bar for what online shoppers expect in terms of receiving their purchases, but it’s eager to best Wal-Mart. In May, it lowered its free-shipping order minimum to $25 and even though it’s offered two-day shipping on a plethora of products for years and even offers same-day delivery on some. It’s also just launched “instant pickup” locations for orders made through its app will likely keep up the pressure.
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