Is Walmart the New Amazon?

Is Walmart the New Amazon?

Entrepreneurs across the globe have jumped into opening e-commerce businesses through Amazon. By working the system and mastering the algorithms, many have leveraged a lucrative opportunity for themselves.

A great case can be made that the era of the Amazon store is far from over and that a powerful opportunity still exists for people who know how to utilize its tools to their advantage.

However, in recent years, Walmart entered the e-commerce scene as well. But is it any threat to Amazon?

Walmart is already well-poised in terms of its business model, and e-commerce is an extension of its existing infrastructure. As the world’s largest retail operation, Walmart considers Amazon a competitor — and has taken direct steps to address this competition.

In an interesting bit of history… Amazon founder Jeff Bezos met with Walmart in Amazon’s early days to discuss working together.[1] Though nothing came to fruition… Bezos studied Walmart closely as he formulated his own business model and used some of its ideas as a template when taking his own plans to the e-commerce space.

Amazon has changed the buying habits of consumers (as well as their expectations) with many features — Alexa, one-click ordering and speedy delivery just to name a few.

Amazon also developed an extensive warehousing and distribution network, something that Walmart already had in place.

Walmart also has the advantage of being one of the most recognizable brand names, which customers associate with low prices and flexibility. It has the best of both worlds: physical stores and e-commerce.

The retail giant has followed Amazon’s lead in developing a convenient and user-friendly online presence and app, as well as subscription services for frequently ordered goods. Local inventories are integrated into the e-commerce space, and consumers can choose delivery of goods, curbside pickup or no-line pickup in the store itself.

Additionally, Walmart’s website monitors prices of goods advertised across the web in order to keep prices competitive. Amazon, in turn, targets Walmart’s market with features like Prime Pantry, a service that offers the delivery of fresh food — in some cases within an hour.

Walmart’s growth into e-commerce specifically targets millennials, which makes sense. Millennials currently make up one-quarter of the U.S. population, are now heads of households and are among the most ardent purchasers of day-to-day essentials and consumer items.[2] They also demand e-commerce convenience.

But What About the Entrepreneur?

With Walmart’s massive warehouses, ever-growing online presence and energetic effort to grow its online business… where does the entrepreneur fit in?

Currently, Walmart.com welcomes third-party sellers to its site in 35 broad categories. It offers the benefits of no startup or monthly fees, a wide customer base and listing on affiliate websites. It also offers positive name recognition, a platform for simple transactions and mobile presence.[3]

The biggest disadvantages sellers may face are strict price controls in keeping with Walmart’s lowest-price policies and the ensuing squeeze of profit margin that may result.

Max Godin of CrazyLister encourages e-commerce entrepreneurs to come over to the “blue side” and tap into the 332.82 million unique visitors that Walmart.com receives each month. He adds that Walmart’s seller support leaves Amazon’s in the dust, “Walmart has actually made serious improvements to its seller support by opening up a seller hotline as well as a menu that is interactive and can help sellers solve problems in real-time.”[4]

Godin adds that Walmart.com may not be for everyone but offers an opportunity that e-commerce entrepreneurs should consider tapping into. While Amazon is currently looking at Walmart in the rearview mirror when it comes to e-commerce, it’s a dynamic industry in which serious up-and-comers can gain ground quickly.

Worth a try? You’ll have to weigh the pros and cons and decide for yourself. Amazon isn’t going away any time soon, and they’ve got the business savvy to keep a step ahead of their competitors… but if you can benefit from taking advantage of selling opportunities at both of these corporate giants, then why not?

With purpose,

Patrick Gentempo

Patrick Gentempo

Sources

[1] Blake Morgan. “7 Ways Amazon and Walmart Compete -A Look At The Numbers.” Forbes. August 21, 2019. www.forbes.com.

[2] Abhishek Jaiswal. “Getting Started Selling on Walmart in 2020: An Insider’s Guide To Success.” Big Commerce. N.d. www.bigcommerce.com.

[3] Ibid.

[4] Max Godin. “The Beginner’s Guide to Selling on Walmart Marketplace Successfully.” Crazy Lister. September 16, 2019. www.crazylister.com.