Amazon is doing offline, Wal-Mart is doing e-commerce. Who has a better prospect?
According to foreign media reports, the competition between Wal-Mart and Amazon’s two retail giants is almost everywhere in their business. For the two companies, where is the focus of their attention? It should be the competition between the offline entity business and the online shopping platform.
The game began in August 2016, when Wal-Mart acquired the e-commerce site Jet.com. This is Wal-Mart’s direct response to Amazon’s online business and a clear signal that the company is ready to participate in online competition.
But not long after, Amazon bought the Whole Foods Supermarket in June 2017. The acquisition’s goal is to give Amazon access to the rich data behind more GM supermarket customers and access to all of its own brands that organic food retailers have accumulated.
Since last summer, Amazon has been looking for ways to expand its physical business with services such as Amazon Lockers and Amazon Go.
As with e-commerce, convenience is critical to consumers of offline business. Amazon’s main task is to shorten the time it takes for consumers to complete their purchases. The emergence of Amazon Go is entirely about creating a frictionless shopping experience. It was opened to the public in January 2018 and promised that there would be no cashiers and checkout counters, no queues for checkouts, and a more streamlined shopping experience. This may be very beneficial for Amazon to expand its business, because in the past year, 86% of American consumers said they left the shopping store because they had to queue up, went to different stores to shop, or gave up shopping.
In addition, Amazon lockers are found everywhere in its full-food supermarket. While they are primarily convenient for shoppers to pick up and return goods from Amazon.com, they also increase the likelihood that people will buy items when they use the lockers.
While all of this is happening, Amazon continues to strengthen its online business and product offerings on its platform. Retailers selling goods through online channels are more than ever, enabling Amazon to keep abreast of consumer trends and pricing data to make smarter decisions about private label brands.
On the other hand, Wal-Mart has a large physical store network with more than 5,000 stores. The company continues to improve its in-store experience with new technologies such as its Store Assistant Assistant. Wal-Mart is still testing new layout concepts and attracting customers through new, self-owned branded apparel.
The brick-and-mortar retailer has also made great strides in e-commerce. Wal-Mart recently released a new streamlined website and mobile app that changes the look and feel of the user while making it easier for consumers to find brands they know and love.
Also on the new website, you will find that Wal-Mart has brought more high-end fashion products to consumers through its partnership with Lord & Taylor. For various reasons, both companies want to see sales growth. Wal-Mart can now surpass the daily low prices and attract more high-end customers. And Lord & Taylor has expanded their online business and customer base without incurring significant costs.
Although all of this is commendable. But the best strategy for Wal-Mart to attract Amazon users is to offer a free two-day delivery service. Amazon only offers this service to users with Prime membership, and the recent cost has increased by 18%, but Wal-Mart offers this service free of charge to all shoppers with more than $35 in total.
It is really interesting to see that the two are narrowing the gap between online and offline. I think this competition will only continue to heat up. Both will experience more difficulties as they continue to enter the unknown.
Amazon has become so big that they are beginning to underestimate other retailers, including Wal-Mart. While anyone who claims to have achieved this success deserves praise, an excessive self will provide opportunities for competitors. Regardless of the outcome, Seattle and Silicon Valley do not seem to lack self.
This battle is still going on.
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