this is a grocery store it's filled with
fruits you can touch and meet you can
pick out yourself
this is a fulfillment center it's filled
with robots that pick out products that
will arrive at your door
the first is amazon a company that
accounts for an estimated 40 of all
e-commerce sales in the us
but also has dozens of physical grocery
stores and hundreds more counting whole
foods
the second is walmart a company that
took in around 327 billion dollars from
its physical stores in the us last year
but is also investing heavily in its
e-commerce business
these companies fight for their share of
the estimated 5 trillion u.s retail
market has started to blur the lines
between the two i think amazon and
walmart are moving in on each other's
turfs because they're so big they are
fighting for dollars and they want to be
that place that people go to for
shopping in person and
online so let's take a closer look at
how the venn diagram that is amazon and
walmart is quickly becoming a circle
what are the areas these companies are
competing in today and will their fight
for retail dominance eventually make
them indistinguishable
the competition between these two wasn't
always obvious amazon built its
everything store for the online chopper
where they have really made a mark is by
appealing to people with fast delivery
for almost anything you can think of
walmart designed its super centers for
the in-person experience putting stores
near american homes and promising them
every day low prices walmart always low
prices
always a majority of retail sales still
happen offline but as online sales have
grown each year so too has this
head-to-head competition the american
consumer is really fickle you can't just
get people these days by offering the
lowest prices you have to offer them the
lowest prices and a whole range of other
products and services and i think the
biggest players are trying to do them
all for amazon that has meant expanding
into groceries not just for delivery
either
adding to its network of more than 500
whole foods locations amazon is pushing
deeper into physical grocery with a new
brand amazon fresh amazon fresh is more
like your traditional
grocery store so you'll find a wide
range of items from brands that you're
probably familiar with and you'll
probably also find items at low prices
if that sounds familiar it's not a
coincidence walmart is the undisputed
leader in grocery walmart is a massive
retailer that really at its base is an
american
grocery chain it sells other things but
most of its sales and profits come from
selling groceries and it's the largest
company doing that data from numerator
shows walmart accounted for roughly 21
of overall grocery spending in the us in
the last year amazon.com at whole foods
meanwhile made up about three percent of
spending in the sector but adding amazon
fresh to the mix gives the company a
store that experts say is priced to
compete with walmart
food is of huge value for them one
because food is something that consumers
buy really frequently and people i've
spoken to in this space have said that
it essentially gives amazon access to
more data of what their customers are
purchasing and how they're behaving
amazon has 27 fresh stores so far but
the company recently announced it would
refocus its physical retail efforts in
part on groceries and it's doing so with
an amazon twist it also serves as an
avenue to sort of try out some of these
technologies that they've come up with
like they're just walk out technology
just walk out which allows customers to
shop and walk out of the store without
stopping at a cash register is in place
at 11 amazon fresh stores the company's
dash carts which also allow customers to
skip the checkout lines by paying from
the cart instead
are used at other locations it's this
tech that amazon sees as its
differentiating factor why a customer
might pick amazon fresh over walmart and
in grocery loyalty is key one thing that
is unique about grocery stores is people
are really habitual about where they go
and once they do make the switch over
you will have a higher likelihood of
holding on to them
as amazon looks to peel away some
walmart grocery shoppers walmart is
eyeing a greater share of the e-commerce
market dominated by amazon in 2021
walmart added nearly 60 000 new sellers
to its online marketplace and the year
before it launched walmart plus a
subscription service that offers paying
members free shipping and fast delivery
it's very clear that walmart created a
membership model to
mirror some of the success that amazon
has had with prime there's a loyalty
factor there's a sheer revenue factor
and they would love to have that model
as part of their effort to keep sales
growing but in other ways walmart's
e-commerce efforts look very walmart the
best example buy online pickup in store
for walmart buy online and pick up a
store has been one of their major
successes it's also been a major part of
their e-commerce growth that counts as
part of their e-commerce sales and
that's a huge growth driver for them but
for some delivery is still more
convenient
amazon which offers delivery in as
little as five hours in some cases is
often the fastest option here it's able
to do this in part by having more than
380 fulfillment centers worldwide
walmart has just 31 dedicated e-commerce
fulfillment centers but the company uses
more than 3 500 of its stores to send
out online orders and it plans to attach
around 100 smaller fulfillment centers
to existing stores in the next few years
some of which are already in operation
walmart is really trying to leverage
stores to catch up to amazon on
e-commerce sort of ironically because
they have the goods in those stores and
they're trying to use those stores
increasingly as sort of hubs for
delivery an example of that is walmart's
in-home delivery service which brings
orders from the store straight into a
shopper's home or fridge walmart says
this service will be available to around
30 million homes by the end of this year
but all of these efforts cost money and
for walmart retail isn't enough they
want to find some other profitable
revenue pools to
do things like build lots of fulfillment
warehouses to offer fast shipping that's
something amazon does well the company
is now the third largest digital
advertiser after google and facebook ad
sales brought in 31 billion dollars for
the company last year walmart which
recorded 1.6 billion in ad sales last
year sees this as an opportunity walmart
has really emphasized building an
advertising business they have hired a
bunch of people they've restructured
that side of their business over the
last few years because they want to have
another profitable revenue source just
like amazon
it's clear this competition is changing
walmart and amazon shoppers don't need
to go into a walmart to shop with the
company nor do they need to trust amazon
to pick out the right avocado for them
and low prices and fast delivery are now
expected from both but will these
companies ever really be the same i
think that amazon and walmart are
getting more similar in some ways but
they're so fundamentally different in
where they came from walmart with its
background in physical stores is now
using those to help grow its e-commerce
business
while amazon is using the money it makes
from its digital offerings to support
its physical growth so they're crossing
each other's paths they're getting on
each other's turf but they're they're
not the same even if the two are
starting to look more and more similar
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