Will Amazon or Walmart win the clash of the retail titans?
Amazon.com and Walmart’s contest for market dominance has emerged as one of the most-watched unfolding dramas in today’s retail world, and in a close decision yesterday, the viewers of RetailWire’s “Clash of the Titans” webinar decided Walmart has the edge in the ongoing battle.
In the webinar, RetailWire BrainTrust member Ken Cassar, principal analyst at Slice Intelligence, presented comparative online performance data on Walmart and Amazon. He was then joined by Carol Spieckerman, president of Spieckerman Retail, and Lee Peterson, EVP of brand, strategy and design at WD Partners, who for the sake of the exercise advocated for Walmart and Amazon, respectively.
Mr. Cassar positioned Amazon as the leader in terms of purchase frequency, logistics fulfilment, voice commerce and product search. However, he observed Walmart winning in terms of order size, with 25 percent of Walmart’s orders exceeding $100 vs. 38 percent of Amazon orders being less than $20. He also noted that Walmart’s BOPIS solution, Walmart Grocery, has expanded from seven percent of its online sales in 2016 to 17 percent of its sales in 2017.
“The retailer that’s able to win grocery in the long run is going to be well positioned to be the winner overall,” said Mr. Cassar.
In the first “round” of the debate section of the webinar focusing on which chain was better positioned to grow with young people, Ms. Spieckerman argued that grocery would drive frequent in-store trips for Walmart. Mr. Peterson countered that Amazon already had 40 percent of Millennials shopping on the platform and was poised to make gains in grocery. Webinar viewers chose Amazon as the winner of the “round” of discussion.
On the topic of customer experience, Mr. Peterson characterized Walmart’s brick-and-mortar footprint as a hindrance. Ms. Spieckerman countered that Walmart did not, like Amazon, force customers into a single channel and could win with in-store customer service. Webinar viewers chose Walmart for the round.
When discussing which retailer had the best brand image and company culture, Ms. Spieckerman argued that Walmart focuses, from the supplier perspective, on showcasing high-affinity brands that don’t get lost in the shuffle. In rebutting, Mr. Petersen compared the choice between Amazon and Walmart as the choice between working at Tesla and Buick. Viewers chose Amazon.
The debaters were finally asked to consider how challenging it would be for each company to scale up in the other’s domain. Mr. Peterson cited Amazon’s holiday e-commerce dominance (Amazon’s 48 percent to Walmart’s six percent) and acquisitions aimed at taking calculated moves into brick-and-mortar. Ms. Spieckerman countered that Walmart was making big moves into China with local partnerships, in places where Amazon was running into big competition from extant market-dominant e-commerce operations.
Viewers chose Walmart as the winner of the fourth round and, in a close decision, sided with Walmart as having the greatest likelihood of dominating overall retail market share long-term.
DISCUSSION QUESTIONS: Do you agree that grocery is key to the market share competition between Amazon.com and Walmart? Will Walmart’s gains in click-and-collect grocery give it an edge over Amazon in coming years or will Amazon’s dominance in e-commerce assure that it will prevail?