The story of Walmart versus Amazon has been capturing headlines since the fall of 2016 when Walmart made the massive acquisition of Jet.com. The size of the acquisition and the immediate promotion of Jet.com’s CEO Marc Lore to head all of Walmart e-commerce efforts sent a clear message to the retail world of Walmart’s intention to compete in the $500+ billion US retail e-commerce market.
Since then, there has been no shortage of Walmart-versus-Amazon narratives circulating the media as these two retail giants push the industry forward with one-day shipping, in-home delivery, and automated logistics including the middle mile and the final mile.
On the surface, it appears Amazon and Walmart are in an all out brawl to win the other’s customers. To some degree this is true, but the recent article “The consumer is changing, but perhaps not how you think” from Delloitte calls this a bit into question. The report, the latest from Kasey Lobaugh, highlights an interesting scenario:
“It appears that Walmart is popular among the baby boomers and the lower-income group, as it is growing its digital sales for these cohorts at 1.4 times and 1.2 times the rate of Amazon, respectively.”
This data fits in well with what we already know about Amazon. In 2017, Vox reported on Prime membership cresting 80% in upper-income households, the highest of an income segment. As Amazon looks to move in-store, they have purchased Whole Foods. A high-end food store, and have rolled out Amazon Go locations in affluent city centers. When faced with public and political pressure warehouse conditions, Amazon raised wages in order to protect its brand and public image. Even the investment into next day delivery has valued service quality over cost as it is directly linked to a price increase of the Prime membership and is expected by some analysts to lead to a further increase in Prime soon.
Meanwhile, Walmart has always been the low-cost retailer of the US. They have focused on inexpensive real estate and pursued tax subsidies long before and more effectively than Amazon’s HQ2. They are the original retailer to be criticized for squeezing suppliers and not paying a living wage.
As Walmart’s low-income customer base begins to come online and Amazon continues to roll-out more brick & mortar locations, they will eventually meet and fight on the margin. Until then, it is omnichannel laggards including digital natives who should be concerned as we see Walmart ramp up e-commerce and Amazon expand its store square footage nationwide.
Read further: News, amazon, walmart
Your email address will not be published. Required fields are marked *