Ecommerce Guide

Are Wal-Mart The Only Company Left To Compete With Amazon?

Following another successful Amazon Prime Day, data from Market Track suggests that Wal-Mart is the only company that stands a chance of taking on Amazon. The market tracking firm review price comparisons between many major retailers including Jet.com, Wal-Mart, Target, Best Buy and Amazon and found that throughout Amazon Prime Day, Wal-Mart’s efforts to stay competitive with Amazon was much better than the rest. Both Wal-Mart’s website and Jet.com were “the closest in terms of price parity” on Prime Day, matching more of Amazon’s deals than other retailers, Market Track said.

Retail consultant Jan Kniffen of J. Rogers Kniffen told CNBC’s “Worldwide Exchange” that only Wal-Mart was up to the task of taking on Amazon.

“There’s only one person really geared to fight back, and it’s called Wal-Mart. I think [Wal-Mart] is doing a great job,” Kniffen said. “I think they’re the biggest threat to Amazon. I think the two of them battle it out in grocery, they battle it out in the rest of retailing, they battle it out online, and they’re going to battle it out in brick-and-mortar now.”

Wal-Mart Need To Do Something “Dramatic”

However, this isn’t a view shared by other retail and ecommerce industry commentators. Brittain Ladd, who is a strategy and supply chain consultant in the grocery industry and was responsible for cross-border supply chain, logistics, transportation and last mile delivery thins that not only will Amazon win the ecommerce war, but by 2030 they will be the number one grocery retailer in the US. This will be fuelled by the $13.7 million acquisition of Whole Foods which will help Amazon gain customer trust, and that will help both its physical and online retail sides. Ladd says:

“Amazon can offer grocery customers a greater value proposition than stand-alone grocery retailers like Albertsons and Kroger and even Walmart. Amazon will leverage their physical stores to gain trust with consumers that Amazon can offer the freshest of fresh fruits, vegetables, meat, milk, eggs, dairy and baked goods. In turn, Amazon will prove to consumers that if they order groceries online for delivery, the quality and freshness will be the same. In addition, Amazon will educate and incentivize customers to turn to Amazon for all of their retail needs such as shoes, apparel, electronics, auto parts, furniture and even appliances. In essence, what Amazon can offer is an endless retail aisle capable of meeting the needs of all customers.”

To grow into America’s number one grocery retailer, Ladd believes that Amazon will have to expand its footprint and eventually rebrand Whole Foods to focus more on Amazon.

“Amazon will also open additional stores throughout the United States in order to create an ecosystem of stores capable of meeting the needs of the majority of Americans. Instead of just building Whole Foods stores, Amazon will strategically use different formats to ensure they can serve the most customers. For example, Amazon Go, Amazonfresh Pickup, and multi-format stores will all serve a role in the Amazon grocery ecosystem. Amazon will have to design and build additional distribution centers focused on consumables, especially fresh fruit, produce, meat, milk, eggs, and dairy. Finally, I believe at some point in the near future Amazon will rebrand Whole Foods to place the focus on the Amazon brand.”

Looking at Amazon’s competition, Ladd thinks that Wal-Mart missed a trick by not acquiring Whole Foods before Amazon and thinks that if they are to remain competitive, then they have to do something dramatic.

“From a strategy perspective, Walmart must do something dramatic to change the entire dynamic within retail,” Ladd said. “Therefore, based on my analysis and experience, I recommend that Walmart divest Sam’s Club and then acquire Costco. Walmart/Costco/Jet has an ability to challenge Amazon on a level never before seen.”

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Scott Bretton

Scott Bretton

One Response

  1. Dave July 16, 2017

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