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Walmart Plays Catch-Up With Amazon
HughPickens.com writes: According to James B. Stewart in the NY Times, for the past 16 years Walmart has often acted as though it hoped Amazon would just go away. When Walmart announced last week that it was significantly increasing its investment in e-commerce, it tacitly acknowledged that it had fallen far behind Amazon in the race for online customers. Now, the magnitude of the task it faces has grown exponentially as e-commerce growth continues to surge globally. "Walmart.com has been severely mismanaged," says Burt P. Flickinger III. "Walmart would go a few years and invest strategically and significantly in e-commerce, then other years it wouldn't.Meanwhile, Amazon is making moves in e-commerce that's put Walmart so far behind that it might not be able to catch up for 10 more years, if ever."
In 1999, Amazon was a fledgling company with annual revenue of $1.6 billion; Walmart's was about $138 billion. By last year, Amazon's revenue was about 54 times what it was in 1999, nearly $89 billion, almost all of it from online sales. Walmart's was about three times what it was 15 years before, almost $486 billion, and only a small fraction of that — 2.5 percent, or $12.2 billion — came from Walmart.com. Walmart's superefficient distribution system — a function of its enormous volume and geographic reach — was long the secret to Walmart's immense profitability. Ravi Jariwala, a Walmart spokesman, says that Walmart is building vast new fulfillment centers and is rapidly enhancing its delivery capabilities to take advantage of its extensive store network to provide convenient in-store pickup and adds that 70 percent of the American population lives within five miles of a Walmart store. "This is where e-commerce is headed," says Jariwala, which is to a hybrid online/in-store model. "Customers want the accessibility and immediacy of a physical store," along with the benefits of online shopping.
In 1999, Amazon was a fledgling company with annual revenue of $1.6 billion; Walmart's was about $138 billion. By last year, Amazon's revenue was about 54 times what it was in 1999, nearly $89 billion, almost all of it from online sales. Walmart's was about three times what it was 15 years before, almost $486 billion, and only a small fraction of that — 2.5 percent, or $12.2 billion — came from Walmart.com. Walmart's superefficient distribution system — a function of its enormous volume and geographic reach — was long the secret to Walmart's immense profitability. Ravi Jariwala, a Walmart spokesman, says that Walmart is building vast new fulfillment centers and is rapidly enhancing its delivery capabilities to take advantage of its extensive store network to provide convenient in-store pickup and adds that 70 percent of the American population lives within five miles of a Walmart store. "This is where e-commerce is headed," says Jariwala, which is to a hybrid online/in-store model. "Customers want the accessibility and immediacy of a physical store," along with the benefits of online shopping.
You don't have to pay Sales Tax on the items.
Yes, I know you are supposed to pay use taxes in most states, but seriously, who does that?
In my area, local plus state sales tax is in the upper 9.x% range....when I buy a large ticket item online, I save a substantial amount of $$. I'd have to pay that sales tax if I bought the same item on Walmart.com or picked it up in the store.
I know that someday this will come to an end, but in the meantime, I'd have to guess a LARGE number of people order from Amazon and others to avoid high sales tax in states that charge it....
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Amazon hasn't ever made a significant profit. What point am I trying to make? I have no idea but it's an important one!
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
You have to be biased against walmart to feel that way. It's just like any other supermarket. Maybe whole foods makes you feel better because they give you the impression that what you're eating there is healthier (spoiler: It's not. I've worked for a major food distributor and we sold them the same stuff we sold walmart when they ordered the same category of items.) The only difference is whole foods refuses to carry certain foods citing health concerns (though there's no actual scientific basis behind their ban list) and they charge you about four times as much. But if paying four times as much makes people feel better, then to each his own I say.
Anyways, two major reasons I don't buy from walmart most of the time:
- Amazon usually has better prices and the selection is much bigger.
- Walmart rather annoyingly doesn't honor their own website's prices in store. If you want their online price, you have to buy it online and then wait a few hours to pick it up in store.
That said, I could see myself springing for Walmart instead of Amazon if they did something like this:
- Greatly expand product selection
- Day after or second day after delivery of your item to the local store
- No "prime" style subscription required (I only use mine for the free shipping and nothing else, I have never really liked prime video or any of the other services.)
I have a hard time taking Walmart seriously when it comes to instant gratification. If I want anything fast I'll go to just about any other store first, because those other stores are more likely to actually have cashiers ready to work. Whenever I go to Walmart half my time in the store is spent waiting in line to check out.
Walmart has to follow the same health guidelines that every other grocery store has to follow. If Walmart is doing it differently, then it's only a matter of time before everyone else is doing it the same.
No they don't, they really really don't. This following of guidelines has to be done by associates. They can and do gut their labor supply until they're staffed entirely by the most hopeless dead-end cases, and then pressure those people until they're scrambling to keep up, much like Amazon does in fact.
You can't DO produce like that. It bruises, damages and spoils and you get in situations where because everything's a wreck the customers feel no obligation to be decent w.r.t the other customers and it all becomes a complete shitshow.
Health guidelines go out the window. The other part of your statement is sadly (somewhat) true: yes, Walmart puts market pressure on everybody else to be just as much of a shitshow. Either everybody declines to match, or turns to weird things like Aldi where you're sort of picking your way around palettes of cardboard boxes full of counterfeit products that are hopefully shelf-stable for years. Very American, for all that it's a German import.
It only goes so far before people start bucking the trend by finding favorite stores that haven't declined so much, and playing favorites even in the teeth of Walmart price cuts. I realize it's heresy, but price isn't everything.
Actually walmart's safety standards are a notch above the typical health food store in that they won't carry organic alfalfa sprouts due to the high incidence of e.coli contamination. Meanwhile places like whole foods carry them anyways; in fact whole foods prominently offers a full page of suggestions on what to make with them.
And indeed, it is walmart who is correct here:
http://www.huffingtonpost.com/...
And at the same time, whole foods maintains a "ban list" of ingredients not allowed to be sold in their stores, only these ingredients are not proven to be harmful. For example, they ban glutamates. The reason for that is because some people claim to be allergic to them, but no allergy claim has ever been empirically proven. However whole foods happily carries foods that are known to be such strong allergens that even a trace amount can outright kill some people; specifically, peanuts.
Why? Because whole foods is snake oil, just like their homeopathic medicine aisle.
That said, I don't get why there's all of this love for a company that actively rips you off (whole foods) and all kinds of animosity towards one that is only guilty of making things too affordable for the poor (walmart.)