How small is Amazon compared to Walmart
Amazon vs. Walmart - who will win the battle for the customer?
Hardly noticed in Germany, Walmart in the USA is just as huge a "thick ship" as Amazon. One dominates online trading, the other dominates the retail market. However, you can no longer really draw such a clear dividing line between the two giants, because both companies have long been fighting for the same clientele and are in part on the same "battlefields". Here are the key facts about Walmart vs. Amazon in advance:
- Amazon and Walmart are two of the largest traders (or trading companies) in the world and have been in direct competition for several years.
- While Amazon dominates online retail by far, Walmart is clearly ahead in the offline area.
- Both companies are a kind of marketplace on which various branded products from third-party providers and own brands are offered.
- Amazon and Walmart are constantly expanding their business area in order to win new markets and customers.
- The competition between the two groups will increase more and more in the future, as both penetrate each other's original markets.
Walmart was over 30 years ahead of Amazon
If you look back at the founding years, there is an astonishing gap in the lead that Walmart took advantage of very late (perhaps too late). The supermarket chain was founded in 1962. Jeff Bezos only founded Amazon 32 years later and is currently fighting on an equal footing with Walmart, or has overtaken the retail giant in the online business by far. Walmart could and would have filled its coffers for a third of a century invest in emerging e-commerce much earlier can. However, a Jeff Bezos first had to show in Seattle what the large existing corporations (also and especially in Germany) have slept through for so long.
Nevertheless, there is a not inconsiderable gap Gap between Walmart and Amazon. The online giant employs almost 600,000 people worldwide and has equity of a good 43 billion US dollars. Walmart, on the other hand, has 2.2 million of its own employees and equity of just under 80 million US dollars and is thus clearly ahead in both respects. Although Walmart invests heavily in online retail and is growing strongly here (40% growth from 2017 to 2018), Amazon still clearly dominates this area. About 50% of all online purchases in the US are made on Amazon - Walmart is miles behind here. Interestingly, this competition began with a planned partnership in the mid-1990s, which however never came about.
Innovation and customer focus: Amazon is one step ahead
If you want to survive in e-business and even in retail, you have to invest in growth and innovation. Both Walmart and Amazon have been doing just that for years and sometimes come up with innovative, new ideas. While Amazon started out as an online book shop, they have long since penetrated offline and even logistics areas with Amazon Go and the FBA program. Walmart, on the other hand, started out as a classic retailer and continues to fight its way into the online and logistics market. Just recently, Walmart announced (report from CNN Business) that it would install around 1,500 new robots in its local stores in order to optimize processes and reduce human labor (and thus costs).
But more and more machine automations are being installed in the Amazon shipping centers thanks to Amazon Robotics. In addition, Amazon has long since successfully made the leap into offline business with its own, almost automated supermarkets. It is true that the current 17 Amazon supermarkets are compared to the thousands of Walmart stores not even a drop in the ocean, but Amazon has the capital, the employees, the products and even the logistics to expand this further and thus penetrate even more into the original Walmart market. Innovations such as the Amazon Prime Wardrobe are also clear steps towards linking online and offline business and therefore more pressure for Walmart to catch up or to be better.
Amazon scores with its own cloud
Another crucial milestone that separates Amazon from Walmart is Amazon Web Services (AWS for short). The services from Netflix, Pinterest, Dropbox and Tinder even run on the company's own cloud platform. This business area that Amazon has driven forward in recent years is not only innovative, but also highly profitable.
Another plus point for Amazon is the strong customer focus. Everything that the e-commerce giant plans, implements or changes is geared towards the consumer. Amazon claims to be the most customer-friendly company in the world and according to the "American Customer Satisfaction Index" (ASCI for short) they are 82% and thus the second highest rating almost too. Walmart is also customer-centered, but according to ACSI, it only achieved an overall rating of 74 percent in 2018. So you can say that compared to Walmart, Amazon is not only more innovative, but also more customer-friendly.
Digital growth and logistics - Again, Amazon wins against Walmart
Although both companies in recent years huge investments in e-business and logistics have put in, Amazon is clearly ahead in this area as well. In terms of retail reach, Walmart is of course the clear leader with over 11,000 local stores and dominates this market. However, Amazon wants to expand its Go supermarkets to 3,000 stores by 2021. This is still just a third compared to Walmart, but we're talking about an original online pure player that is mutating into a retailer. If we look at digital growth, then Amazon is developing significantly faster in terms of sales and reach, although Walmart is also recording steadily increasing online sales and is making great efforts to keep pace with Amazon. However, in connection with its own cloud (AWS) and the ever-growing advertising budget that brands and online retailers are investing in Amazon, Walmart will find it damn difficult to catch up or to stick with it. Hunting especially in the area of performance marketing (CPC model) and programmatic advertising (CPM model) Amazon even Google and Facebook too more and more business from and growing rapidly. With Amazon Pay, Amazon also links the marketplace and classic web shops that can now use Amazon's own e-payment solution for "external" sales.
As already mentioned, Walmart has a significantly higher reach in the retail sector and they understood how to use and expand this lead for themselves. According to CNBC (https://www.cnbc.com/2019/02/19/amazon-isnt-killing-walmart-online.html) Walmart is planning a massive expansion of its "pickup stores". Walmart customers can order their products online and pick them up at a Fedex branch near them. The number of such pick-up stations is to be increased to over 3,000 this year. A clever move by Walmart, because it also binds and wins customers who don't have a local shop in their area and who might have migrated to Amazon.
Amazon and Walmart with one-day delivery
This is also evident in the logistics area Competition between Amazon and Walmart. When Amazon published its “One-Day-Delivery”, it took just a few weeks for Walmart to catch up and also present a 1-day delivery service for selected products. However, while Walmart maintains and develops a close partnership with FedEx, the number 1 delivery service in the USA, the logistics group has withdrawn from Amazon entirely, as Forbes.com recently reported (https://www.forbes.com/sites / blakemorgan / 2019/08/09 / a-painful-breakup-amazon-and-fedex /). The reason for this was the massive expansion of Amazon Logistics, Amazon's own delivery service and logistics service. What is still in its infancy here in Germany has long since become a nationwide delivery concept for Amazon in the USA. Own planes and vans as well as subcontractors deliver almost all orders to Amazon customers. This means that Amazon is largely independent of external logistics companies, at least in the USA - impressive for a former online book shop.
Conclusion: Amazon vs. Walmart - it remains exciting
A digital bookstore founded 30 years later and then small at the time, is now with one of the largest trading company in the US (and measured worldwide in terms of sales, number of employees and reach) is impressive in itself. Nevertheless, one should not underestimate the sleeping giants, because Walmart's war chests are well filled and their customer reach and acceptance are still extremely high. In some areas such as cloud, logistics or online reach, Walmart will have a very difficult time against Amazon in the future not to lose the connection here, or to establish it at all. And even if online trade is booming in the USA and worldwide - the retail sector will probably still generate significantly high sales in the next 10 years and Amazon is clearly at a disadvantage here. However, it is exciting to see how two such huge companies are fighting for market share and current and future customers on a very high, global level. And that's not all, because Amazon is looking for the competition also with other giants like Facebook and Google when it comes to online advertising budgets. Against Apple and again Google has Amazon For example, the battle for voice-controlled, intelligent devices with Alexa or Amazon Echo has already been won. In any case, it will remain an exciting race between powerful corporations and consumers will very likely benefit from it: faster delivery services, more products that can be bought online and a wider range of digital services.
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