Walmart Takes On Amazon In E-Commerce
Late to the online consumer market, the retail giant is expanding its web presence to challenge the online shopping king.
- 24 october 2013
In terms of sheer revenue and size, it’s hard to challenge Walmart when it comes to retail (an expected $500 billion in revenue this year). However, in the growing online marketplace Walmart is still playing catch-up.
As difficult as it is to believe, Walmart is still learning e-commerce as they prepare to challenge the online retail king, Amazon. To gain some leverage, Walmart has established @WalmartLabs at Walmart Global E-Commerce in California.
@WalmartLabs is Walmart’s primary attempt to challenge cool tech companies – Amazon, YouTube, etc. – for online business and technology talent. To do so successfully, they’ve taken a page out of everyone else’s books: cool workspaces (treadmill workstations and foosball tables), company hack days for engineers to pursue their own interests, and acquisition of pioneering startups (Torbit, OneOps, Tasty Labs, and Inkiru) that can enhance their ability to crunch data and increase web speed. (The added bonus of smaller acquisitions is that talent, i.e. the startup founders and engineers, can be hired on to continue growing the Walmart brand digitally.)
Initial e-commerce attempts by Walmart have included in-store pickup and same day delivery of online orders, but the company intends to turn its physical stores into a network of global e-commerce assets. And, as Walmart invests further in technology, Amazon is working in the opposite direction to build a physical presence with warehouses and pickup locations – suggesting a combination of digital and physical stores may be the best option.
While Walmart’s total revenue is projected to be over 5x greater than Amazon’s, the e-commerce return for Amazon (all revenue) is over 7x greater than Walmart’s e-commerce revenue. “Amazon is the Walmart of the post-2000 period,” said Matt Nemer, an analyst at Wells Fargo.
Can Walmart successfully adapt their model online to challenge Amazon? It may be difficult to imagine given the retailer’s size, but it’ll be interesting to watch.