Which is the Better Retailer? Walmart vs. Amazon
The first in a series comparing leading retailers — how they’re doing, and what the future may hold.
When looking at retail heavyweights, you don’t have to look further than Walmart and Amazon to find the most successful. Walmart’s sheer size, in terms of revenue, is greater than its four largest competitors. It dwarfs all big box competition in terms of number of physical stores and square footage. Over the years, it has leveraged its buying power to keep prices low and has communicated that to consumers. And, according to Walmart’s 2013 annual report, it plans to build between 220 and 240 new stores this year, adding 15 to 17 million square feet of new space.
Over the past 19 years, Amazon.com has built an online retail juggernaut of its own, having the most popular retail website, and building a reputation for reasonable prices and top-notch customer service and delivery options.
On the surface, it would be easy to say that Walmart’s future is hitched to brick and mortar retailing while Amazon’s is dependent on e-tailing. If that’s the case, Walmart has the edge for now, because, as the July issue of Stores magazine (published by NRF) notes, "… more than 15 years into the dot-com revolution, online transactions account for less than 15 percent of total retail sales."
But, according to Internet Retailer, Amazon has over fifteen percent of all e-commerce business and 28 percent of sales from the top 500 e-commerce retailers. Stores cites Amazon’s initiatives, and it has many: building new warehouses; developing new electronics devices and content; continually developing its Marketplace network of merchants; and upgrading its Web Services business. Amazon also launched a senior-oriented drug site, purchased the Goodreads book reviewing site, has numerous content deals, is expanding AmazonFresh delivery service, and continues to build on the success of Amazon Prime service. It recently launched a fine art site and Jeff Bezos recently purchased The Washington Post, which may bring some possible synergies, especially in the content area.
While Amazon seems to have an unending stream of development underway, Walmart already has the biggest foundation in the history of retailing already built. Walmart’s base is delivering consumer products at low prices and it launched an ad campaign (with an accompanying PR website: www.therealwalmart.com) earlier this year, showcasing real employees and real customers who like working and enjoy shopping there, respectively. Walmart cites the fact that over 60 percent of Americans shop there in a given month. Various initiatives include smaller sized stores (Walmart Neighborhood Markets and Walmart Express), geographical expansion, sustainability and green programs, and expansion of e-commerce via walmart.com and @Walmart Labs. Finally, there is the fact that Walmart makes money, and a lot of it, while Amazon had negative net income for the past year at least.
- Top 100 Retailers – Stores
- Will Consumers, Hourly Associates Buy ‘The Real Walmart’? – RetailWire
- New Ad Campaign Promotes ‘The Real Walmart’ – Forbes
- The Real Walmart – Walmart
- Annual Report – Walmart
- Walmart is still bad for the planet – Boulder Weekly
- 3 Signs Walmart’s Best Days Are Behind It – Breakout/Yahoo! Finance
- Jeff Bezos: Amazon.com’s ‘dread pirate’ founder – The Guardian
- Annual Reports and Proxies – Amazon.com
- The World’s Most Powerful Brands – Forbes
What do you see as the current strengths and weaknesses of Walmart and Amazon, respectively? Do you see a brighter future for Walmart or Amazon?