To top
Share on FacebookTweet about this on TwitterPin on PinterestShare on Google+Share on LinkedInEmail this to someone

For over 50 years, Walmart has been cited as an example of a successful retail chain. However, as the saying goes, there has to be a changing of the guard. Just recently, Amazon has overtaken Walmart as the biggest retailer in the world. According to CNN, Amazon’s stock surged 10 percent on the heels of its Q2 2015 earnings report. Amazon was valued at around $250 billion, which put them ahead of Walmart ($230 billion).

In addition, Amazon also turned a profit of $92 million. Last year, it posted a loss of $126 million, and analysts were predicting another loss in 2015. Part of Amazon’s success is their Amazon Prime program, which is rapidly growing outside the United States. Amazon Prime members get several perks such as free two-day shipping, free e-books and more. Amazon’s Prime Day (July 15), despite generating some negative social media responses, saw sales almost double. “We’re thrilled with the results of Prime Day,” Amazon CFO Brian Olsavsky said. “New Prime members signed up in higher rates than we’ve ever seen.”

Walmart’s response to Prime Day was their announcement of “rollbacks” (discounts) at their stores, and also took shots at Amazon’s Prime service. “We’ve heard some retailers are charging $100 to get access to a sale. But the idea of asking customers to pay extra in order to save money just doesn’t add up for us,” CEO Fernando Madeira said on a blog post. “We’re standing up for our customers and everyone else who sees no rhyme or reason for paying a premium to save,” he added, criticizing Amazon’s decision to “gate” the sale to Amazon Prime members only.

When it comes to e-commerce, however, Amazon has continued to widen the gap. Amazon has been able to adjust to the demands of e-commerce due to its youth (the company recently celebrated its 20th anniversary). Walmart, despite being in the retail business since 1962, has been forced to play catch-up. They may even sink further behind in the global market: Chinese e-commerce retailer Alibaba is quickly growing in valuation ($212 billion) and has tapped ex-Goldman Sachs banker Michael Evans to expand their presence in the American market.

Walmart CEO Doug McMillon said that he plans to react to the e-commerce frenzy by creating an omni-channel, customer-centric experience. “I want us to stop talking about digital and physical retail as if they’re two separate things,” McMillon said to attendees at the company’s annual meeting. “The customer doesn’t think of it that way, and we can’t either.” McMillon stated that Walmart gives his customers far more alternatives to shop than his e-commerce rivals. “One customer can shop with us in so many different ways — in stores, on their phones, at homes, a pick-up point. But they just think they’re shopping at Walmart, at ASDA, at Sam’s Club.”

However, Marketing Land contributor Josh Manion warned that the omni-channel experience has drawbacks. “Omni-channel marketing requires a long-term commitment to execute, scale, manage, measure and optimize these capabilities. The pragmatic view says: Start small, start now, and don’t lose sight of the end game,” he said. While Amazon and Alibaba don’t have physical stores, they do have the advantage of being purely online, which allows them to cut the costs of having a physical store and allows them to cater to a more global audience.

While Walmart has expanded outside the United States, their largest presences are in Mexico (2,260 locations), the United Kingdom (573 stores, under the name Asda), Canada (394 locations), and Latin America (where it operates under Bompreco in Brazil, Walmart Chile in Chile, and has locations in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica through its 51 percent ownership stake in the Central American Retail Holding Company, or CARHCO). Walmart also has significant presences in China (through Chinese supermarket Yihaodian), Japan (through Seiyu), and a planned expansion into India.

Is Amazon truly the king of retail? As the saying goes, numbers don’t lie, and Amazon has a huge advantage in the e-commerce space as well as a higher marketing valuation. However, Walmart has physical locations and an aggressive omni-channel marketing campaign as opposed to Amazon’s single-channel marketing (online). All things considered, we could be comparing apples and oranges, but Amazon is the king of e-commerce as of right now.

Leave a Reply

We are on Instagram