Why The Walmart E-Commerce Strategy Won't Beat Amazon PDF

4/5/2015
WhytheWalmartECommerceStrategyWontBeatAmazon
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The competitor to be feared is one who never bothers

about you at all, but goes on making his own business
better all the time.
Henry Ford
Beat Amazon? All of a sudden, Walmart has gotten serious

about this Ecommerce competition. 1 Why? Its all
about the future and the current trends. And the
Walmart ecommerce strategy.
http://www.digitalsparkmarketing.com/generalbusiness/walmartecommercestrategy/
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According to Nielsen, ecommerce will gain more ground

than any other segment of the retail industry by 2017,
with a compound annual growth rate of 11% each
year 2 . Supercenters come in second, with their
growth rate projected at only about half that of web
shopping. When you consider sales for consumer
packaged goods online food, groceries, everyday items
are more like high double digits, almost 20%, you can
see Walmarts concern.
Both chains dominate their areas of expertise. Once just

a bookseller, Amazon is now the biggest online store in
the world with $61 billion in 2012 revenue. Walmart is the
worlds largest retailer of any kind with $469 billion 2012
revenues (estimated $78 coming from Ecommerce in
2012).
Related: Industry Disruptive Change Who Will Be

Disrupted Next?
Walmart is doing all it can to catch up with Amazon

online. But lots of obstacles exist.
We dont think Walmart can catch Amazon for these 6

reasons:
GO
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thenextlevel?
Thenextstep...
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607.725.8240for
freediscussion,
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consultation.
C AT E G O R I E S
SelectCategory
Amazonssingularfocus
F O L L O W D I G I TA L
Amazon is an ecommerce company in everything they

do. They have developed all their expertise in full
support of ecommerce. In fact they now do ecommerce
S PA R K
for many other businesses. They are not hamstrung by an

enormous brick and mortar business like Walmart.
No internal competition like what Walmart faces dayin

dayout. Walmart doesnt discuss this subject and
probably would deny it exists. But it does. No question
there. And it yields a gigantic silent advantage for
Amazon.
MARKETING
ARCHIVES
SelectMonth
Logisticsanddelivery
2/11
4/5/2015
Logistics is what made Walmart great. But delivery is a

different matter. Walmart is dabbling in sameday
delivery and even going a step further than Amazon by
using stores as fulfillment centers and if expanded, could
turn 4,000 stores into bases for same day delivery.
Twothirds of the U.S. population lives within 5 miles of a

Walmart, and trucks crisscrossing the country arrive daily
to replenish the stores, which can greatly reduce
shipping costs. However, the process comes with serious
limitations, particularly since it diverts workers
attention away from ensuring stores are clean and
properly stocked. But it is still a possible big advantage
to Walmart if they could think like one business instead
of two.
They are also attempting to crowdsource package drop

off among customers.
But Amazon has nonperishable products like diapers that

its infrastructure allows shoppers to set up regularly
scheduled deliveries, a service popular on Diapers.com. A
fantastic feature.
And Amazon is already a step ahead with its Amazon

Fresh sameday delivery, currently available in the
Seattle area but soon headed for California. Amazon is
building out this infrastructure for perishables. Groceries
will be the battleground very soon coming to the
forefront. This will further eat into solid Walmart
business.
But what is Walmart doing? They are creating a vast new

logistics system that includes building new warehouses
for Web orders. Hedging their bets so to speak. More
illustration of the internal competition in our mind.
As Walmarts online orders have grown, it has turned to

makeshift spaces carved out of storeserving distribution
centers and thirdparty warehouse operators to help
handle the load. The extra layer added to its costs.
Walmarts online shipping can cost $5 to $7 per parcel,
while Amazon averages $3 to $4 per parcel, analysts saya
big difference considering some of Walmarts popular
purchases are lowcost items like $10 packs of underwear.
3/11
4/5/2015
AgileInnovation
Amazon has existed in the ecommerce technology world
since their inception. They think like a technology
company and agile innovators. They are not afraid to try
new things and they can get things done quickly, thanks
to the culture their CEO Bezos has instilled.
Related: Amazons Innovation Culture: What is Jeff

Bezos Up to Now?
Walmart may not be a startup, but it does try to think

like one with its Walmart Labs division. Those groups is
developing Pangaea, a global technology platform with
scan and go apps that let shoppers buy in store via a
smartphone, and online operations in growing markets
outside the U.S. such asBrazil and China. Theyre doing
more new things, but they are slowed down by their
legacy business and its mindset.
They are as trying outlockers, one of Amazons

hallmarks, allowing shoppers to order items online and
pick them up in stores crucial for the Walmart
demographic, a quarter of whom reportedly do not use
debit or credit cards or even have a bank account. But
why would an online shopper want to deal with the
congestion of a visit to a Walmart mega store? Not us.
Customersetdifferences
Walmart demographics, a quarter of whom reportedly do
not use debit or credit cards or even have a bank
account
, represent a big difference with their key e
commerce competitor. While we have not found any

statistics on Amazon customer set, we speculate a much
larger representation of higher end incomes among their
shoppers. Big advantage to Amazon we believe, both in
consumer disposable income, but also in ability to
operate and shop online. And take advantage of
frequent new technology features.
4/11
4/5/2015
Existinginstorestrategies
Walmart has an enormous and growing network of brick
and mortar outlets 4,000 in the U.S. and counting. More
internationally. With those stores goes an equally
enormous product offering. A blessing but an equal curse.
They are a long ways on being able to put all the products
online where they can be easily found.
At some stage these stores and product line may be an

advantage for Walmart. But those are technology
constrained goals that are, for now, out of reach. And
that is not even considering how Walmart might solve its
internal competition problems. Can you imagine the Wal
Mart cash cow making compromises in terms of revenue
and profit to help their ecommerce business? Not us.
Technologylead
Like Amazon, Walmart has a massive product offering.
This isnt a new problem for either of them, but as the
race to fulfill orders guarantees quicker turnaround times
and more convenienceafterplacing the order, Walmart
must control everything it canbeforethe order is placed
to ensure its actually placed through them. In this case,
that means making sure customers can find what theyre
looking for, quickly and easily. Or, in the case that
customers dont know exactly what that is, helping them
figure it out with a fairly high degree of accuracy.
Walmart must transform itself into an invisible personal

shopper to help customers navigate its vast inventory.
What exactly would that take? A lot. But Walmarts two

most crucial priorities will be helping online customers
navigate its extensive product list easily and quickly, and
streamlining online and offline operations to create a
turnkey overall experience.
To act as an invisible personal shopper, Walmart must

master what they do with this powerful combination of
content and dataand when they do it. The goal is to use
it in realtime, as customers are browsing their online
store.
5/11
4/5/2015
Walmart is trying to improve links between its store

inventory, website, and mobile phone apps so that more
customers can order online and pick up their purchases at
stores, which half of Web customers do already.
Walmart is trying Webbased shopping tactics, like its Pay

With Cash program for Walmart customers who dont
have credit cards. The new program allows them to
reserve products online and pay cash at their nearest
store.
Keytakeaways
At the end of the day, Walmarts rise to online
dominance really just revolves around turning an
otherwise complicated shopping experience into one
that feels quaint and easy. It can accomplish this by
setting up a strong behindthescenes infrastructure that
puts the customer experience at the forefront.
And isnt that what their new strategy is all aboutgiving

the customer what they want where and when they want
it?
Unfortunately it is much easier said than done.
There are many great ecommerce campaigns we can

learn from. Please post your comments below, offering
questions or your own great examples for ecommerce
strategies.
Need some help in finding ways to grow your customers?

Such as creative ideas to help the differentiation with
potential customers? Or perhaps finding ways to work
with other businesses?
Call today for a FREE consultation or a FREE quote.

Learn about some options to scope your job.
Call Mike at 6077258240.
All you get is what you bring to the fight. And that fight
gets better every day you learn and apply new ideas.
When things are not what you want them to be, whats
most important is your next step. Call today.
6/11
4/5/2015
Test. Learn. Improve. Repeat.
Are you devoting enough energy continually improving

your business learning?
Do you have a lesson about making your learning better

you can share with this community? Have any questions
or comments to add in the section below?
Mike Schoultz is the founder ofDigital Spark Marketing, a

digital marketing and customer service agency. With 40
years of business experience, he blogs on topics that
relate to improving the performance of your business.
Find them onG+,Twitter, andLinkedIn.
Digital Spark Marketing will stretch your thinking and

your ability to adapt to change. We also provide some
fun and inspiration along the way. Call us for a free
quote today. You will be amazed how reasonable we
will be.
More reading on continuous learning from Digital Spark

Marketings Library:
Minimalist Guide to be a Business Where People Want to
Work
7 Surprising Things to Know About the Amazon Business
Model
Secrets to Chipotles Culture and Employee Engagement
Like this short blog?Follow Digital Spark Marketing on

LinkedInor add us toyour circlesfor 34 short,
interesting blogs, stories per week.
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Will Walmart Labs

Make Walmart
Innovative in E
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T AGGED WI T H
agile innovation beat Amazon customer
differences ecommerce competition logistics and delivery

Walmart ecommerce strategy
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6ResponsestoWhytheWalmartE
CommerceStrategyWontBeat
Amazon
ola says:
July28,2014at12:55am
I really enjoyed this articles. And I

pretty much agree with everything
you said. To be honest, I kind of hope
that walmart goes out of business.
RE PLY
8/11
4/5/2015
mike says:
July28,2014at11:34am
Thanks for your

comments. Walmart is
not my favorite retailer
either.
RE PLY
bond says:
November17,2014at1:15pm
Walmart is doing some great

innovations and everyone will come
to know in next 23 years whats there
in the bag
RE PLY
mike says:
November17,2014at1:48pm
Bond I am sure they

are and time will tell.
But can they catch
Amazon? Certainly not in
23 years in my humble
opinion.
Mike
RE PLY
techguy says:
February10,2015at8:13am
Walmart will never beat Amazon due

to two reasons: SERVICE and
CULTURE. How can you replicate
great service online if you cant even
do it in their stores? You dont shop
Walmart for the customer
experience.
9/11
4/5/2015
RE PLY
mike says:
February10,2015at8:21am
Point well taken. Thank

you for sharing.
RE PLY
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4/5/2015

Can Walmart ecommerce strategy beat Amazon?

The competitor to be feared is one who never bothers

Beat Amazon? All of a sudden, Walmart has gotten serious

According to Nielsen, ecommerce will gain more ground

Both chains dominate their areas of expertise. Once just

Related: Industry Disruptive Change Who Will Be

Walmart is doing all it can to catch up with Amazon

We dont think Walmart can catch Amazon for these 6

Amazon is an ecommerce company in everything they

for many other businesses. They are not hamstrung by an

No internal competition like what Walmart faces dayin

Logistics is what made Walmart great. But delivery is a

Twothirds of the U.S. population lives within 5 miles of a

They are also attempting to crowdsource package drop

But Amazon has nonperishable products like diapers that

And Amazon is already a step ahead with its Amazon

But what is Walmart doing? They are creating a vast new

As Walmarts online orders have grown, it has turned to

Related: Amazons Innovation Culture: What is Jeff

Walmart may not be a startup, but it does try to think

They are as trying outlockers, one of Amazons

, represent a big difference with their key e

commerce competitor. While we have not found any

At some stage these stores and product line may be an

Walmart must transform itself into an invisible personal

What exactly would that take? A lot. But Walmarts two

To act as an invisible personal shopper, Walmart must

Walmart is trying to improve links between its store

Walmart is trying Webbased shopping tactics, like its Pay

And isnt that what their new strategy is all aboutgiving

Unfortunately it is much easier said than done.

There are many great ecommerce campaigns we can

Need some help in finding ways to grow your customers?

Call today for a FREE consultation or a FREE quote.

Test. Learn. Improve. Repeat.

Are you devoting enough energy continually improving

Do you have a lesson about making your learning better

Mike Schoultz is the founder ofDigital Spark Marketing, a

Digital Spark Marketing will stretch your thinking and

More reading on continuous learning from Digital Spark

Like this short blog?Follow Digital Spark Marketing on

Will Walmart Labs

agile innovation beat Amazon customer

differences ecommerce competition logistics and delivery

I really enjoyed this articles. And I

Thanks for your

Walmart is doing some great

Bond I am sure they

Walmart will never beat Amazon due

Point well taken. Thank

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