17 Jul, 2017

Wal-Mart Pushes Back Against the Amazon Takeover


“Amazon intends to take over the world, and they’re doing a pretty darn good job of it.” Retail Consultant Jan Kniffen of J. Rogers Kniffen

Remember when Amazon.com was simply an online book retailer? Well now, having recently infiltrated the grocery market with its acquisition of WholeFoods, Amazon is forcing executives across all industries to seriously rethink their future.

That said, in the midst of the Amazon takeover…

“There’s only one person really geared to fight back, and it’s called Wal-Mart.” Retail Consultant Jan Kniffen of J. Rogers Kniffen

It’s obvious that Wal-Mart and other major retailers are feeling the heat from Amazon, but amongst them, Wal-Mart’s efforts to stay competitive clearly stand out from the rest.

With Jet.com, a $3.3 billion acquisition guiding Walmart’s online strategy, Walmart is prepared to compete with Amazon on the delivery of everyday items.

The major retailer hasn’t released any statements regarding its plans to compete with Amazon directly. There’s no real reason to do so at this point because Amazon is obviously setting the bar for digital retail.

The second annual Amazon Prime Day was a huge success for the Internet giant last week, but Walmart made sure to let the world know that Amazon isn’t the only place to get the best deals.

According to an article on Fortune, Walmart is the 2nd-most-visited eCommerce site in the United States, and deservedly so.

Wal-Mart and Jet.com managed to match Amazon’s discounts on a number of items like the Sony XB950B1 headphones, Fujifilm Instax Mini 90, and Cuisinart DLC-2ABS Mini Prep Plus.

Market Track analyzed price parities between industry leaders and recorded Wal-Mart to have the most overlap in its online collection compared to Amazon’s.

In fact, out of the 52 Amazon products Market Track observed, 82 percent of them were available at Walmart.com. 50 percent were also available at Jet.com.

Several other major retailers did their best to match the Prime Day prices, but no one did so as efficiently as Walmart.

Staying in the Game

In order to become more valuable to the common consumer, Walmart is concentrated on two things:

  • Increasing assortment
  • Adding more support for third-party sellers on their online marketplace.

Increasing Assortment

Catching up on Amazon’s 260 Million items available online is no small feat, but Walmart executives are dedicated to expanding their online catalog with plans to add at least one million items to their website every month.

Continuous growth and diversification of their online shopping catalog are going to be essential in order for Walmart to continue competing with the ever-expanding Amazon brand.

Support for Third-Party Sellers

By increasing support for third-party sellers on their online marketplace, Walmart is aiming to make more connections than ever before.

Third-party sellers are a big part of the retailer’s business plan because they pay Walmart commission for the sales, allowing Walmart to avoid paying for services such as warehousing and shipping.

eMarketer reported that total eCommerce sales will reach $684 billion in 2020, so Walmart wants to enhance their online presence and stay as dominant as possible in the eCommerce market.

“On-Time, In-Full” (OTIF)

Walmart has been working on new shipping programs to speed up deliveries to customers for years. Some of the programs from 2016 include having employees drop off packages on their way home and offering free two-day shipping on orders of $35 or more. The success of these programs has lead Walmart executives to come up with their latest idea, “On-Time, In-Full” (OTIF).

Efficiency and reliability are key in today’s eCommerce industry. Everyone wants their online purchase to reach them on time and in full, and Walmart intends to meet these demands. OTIF is Walmart’s newest program that will fine suppliers for any deliveries that come in late, early, or improperly packaged.

In order to make sure suppliers don’t feel too threatened by this new program, Walmart will be working on a scoring system to go along with OTIF. The system with help determine who is at fault for the packing being wrong, or the orders not arriving on time.

By improving product availability with OTIF, Walmart expects to increase revenue by $1 billion. Walmart will begin enforcing the new rules this coming August. By February, the company trusts that its deliveries will arrive “on-time” and “in full” 95% of the time.

Whether you like it or not, today’s eCommerce market is all about staying competitive with Amazon. And when it comes to doing just that, Walmart is number one.


Digital Retail Transformation Assembly

North America’s most prominent digital, marketing, technology, and business leaders from the Retail Industry are coming together October 19-20, 2017 at the Grand America Hotel in Salt Lake City, UT, for the Digital Retail Transformation Assembly. Michal Russ, Director of Omni-channel Experience at Wal-Mart Stores Inc., along with other industry leaders will be taking part in our unique event.

By working with the industry, we have put together an event to challenge attendees and anticipate the highly complex digital retail marketing environment that will develop over the next few years.

With new augmented reality, virtual reality, machine learning, and artificial intelligence technology making a splash in 2017, retail CDOs and CMOs are uniquely positioned to take full advantage of these tools and deliver unique consumer experiences.

We’re also thrilled to announce the participation of Martin Barhel, Global Head of eCommerce & Retail Strategy, Facebook, and Brendan Witcher, Principal Analyst, Forrester as speakers at this edition of the Digital Retail Transformation Assembly.

Retail has in many respects led digital transformation. As industries like healthcare, looked to retail for guidance on connecting with the on-demand customer, the retail industry is experimenting with the next stage of digital transformation.

This is not just another “Retail” event. Spaces are reserved for the best in the business. Register your interest here >

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