On October 13th, Walmart announced that customers can order direct from walmart.com. Consumers can order various health and beauty products shipped direct to their homes.
Walmart is clearly gunning for Amazon’s marketshare of online goods sold. If you examine both Amazon and Walmart, you’ll find that they are both in the distribution business. Distributors buy in bulk at discounted prices and sell to customers at retail prices. Walmart has perfected the buy wholesale, sell retail business over the years.
Both Walmart and Amazon have excellent distribution networks however Amazon may have a lot to worry about since Walmart is a larger and more experienced competitor. Due to the fact that Walmart purchases large quantities directly from the manufacturers, they are able to demand favorable discounts which are then passed on to the consumer.
In the past few years, Walmart initiated price wars with the retail toy industry; Walmart won at the expense of Fao Schwartz (filed for bankrupt) as well as creating shockwaves for the entire industry.
Amazon has a list of things that Walmart currently does not have:
1. Product ratings and customer reviews.
2. Customer wishlists.
3. Consumer behavioral data, what do they buy and when do they buy?
4. Price comparison /online storefronts for smaller businesses, Amazon allows retailers to compete alongside for a fair marketplace.
5. Customer Service.
6. Amazon sells almost everything you can want
7. Proprietary technology such as the kindle and ebook platform.
8. The list goes on
Whether Walmart will be able to take away all of Amazon’s customers is not likely. Walmart will probably take away marketshare from Amazon in aelect areas (books, groceries, healthcare and beauty products). The definite winners in the upcoming price wars will be the online shoppers.
Link to Walmart press release
http://walmartstores.com/FactsNews/NewsRoom/9442.aspx
