WalMart vs. Amazon

It’s the Christmas Shopping Season and we are all looking forward to the Battle of the Heavyweights.  No, I am not referring to boxing, the sport.  I am referring to Big Box vs. Online.  Big Box is WalMart, and Online is dominated by Amazon.com.  Like McGregor vs. Mayweather earlier this year, wherein MMA-fighter McGregor agreed to a boxing match against boxer Mayweather for big money, WalMart vs. Amazon will be played out in the milieu of online retailing, which is Amazon’s forte.  Upstart Walmart (can any firm as huge as WalMart be considered an upstart?) has beefed up its online presence.  WalMart is now offering different pricing for the same products online vs. in the store.

WalMart Advantages

I believe WalMart can gain market share in online retailing because I believe they have some advantages over Amazon:

  1. WalMart has more proprietary products that are sold directly by WalMart or WalMart.com.  Think of Amazon as a website middleman wherein you can purchase products offered by other, independent producers or retailers.  Often, on Amazon, you are not purchasing an Amazon product.  WalMart.com has some of that as well, but mostly you are purchasing directly from WalMart.  You can also limit your product search to WalMart-only products.
  2. Speaking of Search, I believe WalMart’s search and product screener is superior in some ways to that of Amazon.  In Amazon, of course, you can type in the product that you are looking for and you can go right to that product.  In WalMart.com, you screen down to the product that you are looking for, and you can view a number of options within that product.  I believe WalMart’s screener allows you to view a greater number of options from which to make a purchase decision.
  3. I believe WalMart’s website is more user-friendly and easier on the eyes than that of Amazon.  Amazon’s website can be information overload, thereby making it difficult to make a decision.  WalMart’s is more orderly, in my opinion.
  4. WalMart has a greater inventory and selection of some products, less of others, than Amazon.  I’m not a retail expert, so I don’t know which product lines favor WalMart, but some do, and this is an advantage for them.  Amazon’s inventory selection sometimes gets thin.

Amazon Advantages

  1. Amazon Prime.  WalMart doesn’t have anything like it.  Shipping costs can quickly eat up any savings you might have on a particular product.  Currently, WalMart offers free shipping on some products, or if you spend more than a certain amount (when I checked today it was $35, which isn’t a high hurdle).  But, Amazon Prime and its shipping and other product benefits are a big Amazon advantage and one that will foster customer loyalty for Amazon.
  2. Shipping:  Time will tell if and how WalMart can match Amazon with regard to the various shipping costs and options offered by Amazon.  Amazon even has the US Postal Service working on Sundays!
  3. Amazon is an organizational and logistic miracle.  I don’t know how Amazon gets it all done and on time, especially working with third-party shippers such as the USPS and UPS, in addition to working with the third-party retailers who sell through Amazon.com.  Kudos to them and all they do.

IMO

I am not advocating purchasing WalMart stock, Amazon stock, or in pair-trading one against the other.  I do believe WalMart has some advantages over Amazon, and that if WalMart can match or come close to Amazon regarding shipping, I think WalMart can gain market share.  We will see how this plays out over this Christmas shopping season.  This is something to keep an eye on when sales and earnings results come out during the First Quarter of 2018.

 

 

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