Ecommerce Guide

Will Walmart Ever Catch Amazon In The Ecommerce Stakes?

Walmart, the gigantic and iconic retail giant has been fighting hard these past couple of years. Whilst a dominating presence on the high street, it is now in a frantic battle to catch up in what is an increasingly crucial and growing sector: ecommerce.

Founded by Sam Walton in 1962, the last 12-18 months has seen the retail behemoth begin buying up smaller and more niche ecommerce businesses in a bid to catch up with Amazon. Quite whether these efforts are beginning to pay off will become apparent on Thursday when Walmart reports its quarterly earnings.

The Amazon Success Story

According to figures from the bank Macquarie, more than half of all money spent online. Undoubtedly, much of this success comes down to the breadth of its offerings which as well as its original book and tech offerings includes hugely popular services such as Prime which offers free delivery as well as access to premium entertainment content. Talking about how what makes Amazon such a success, Krista Fabregas, e-commerce staff writer at FitSmallBusiness.com said:

“It’s because Amazon has been doing such a great job at injecting itself into our everyday life,” she told AFP. Wal-Mart is not part of everyday life, nor is Macy’s, nor is Gap, nor the other stores. We don’t have a connection with any of them throughout the day.”

The huge battle that Walmart will have to try and catch Amazon becomes apparent when you look at their relative company values. It took Amazon 18 years as a public company to catch Walmart in terms of market value. But once it did so, it took less than another two years for Amazon to be worth twice as much. On the 20th anniversary of Amazon’s initial public offering, Amazon’s market cap stood at $459 billion. Walmart’s? $228 billion.

Walmart’s Acquisitions

There’s no doubt about it, as Amazon rode the wave of the growing trend for online shopping, Walmart really missed the boat and were too slow to react to the change. However, its recent acquisitions indicate that it now has Amazon in its sights and is really pushing for a growing share of the ecommerce market.

Recent acquisitions include Bonobos, the specialty men’s fashion retailer in a deal that is reportedly to be worth $300 million. Jet.com was bought for $3.3 billion in a deal that not only saw them expand their web operations but also saw them inherit a fresh team of experienced ecommerce executives and ModCloth, the well known female fashion retailer that was founded by Susan Gregg Koger was acquitted along with the specialty outdoor apparel retailer Moosejaw. Walmart has also launched Store No 8, a tech incubator based in Silicon Valley that Wal-Mart Chief Executive Lore intends to “bring radical innovations to the physical, digital and virtual retail experience.”
Just how Walmart is faring with its quest to catch Amazon will be revealed when its quarterly results are published this Thursday.

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Scott Bretton

Scott Bretton

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