One of the biggest multinational retail corporations, Walmart, is trying every trick to compete with Amazon, the e-commerce, and cloud computing company. Walmart has rightly realized the massive potential of retail in the coming years and to tap such a remarkable opportunity, the company is collaborating with other top players of the same landscape, and you need to be on the edge when competing with technology’s most dominant players.
The battle between the two giants has shifted way beyond the conventional retail business and has reached to the tech sphere. Working on the same lines, Walmart struck a five-year deal with Microsoft on AI (Artificial Intelligence) projects and shifted its full cloud operations to the Microsoft Azure and Office 365. The handshake between these companies may result in the introduction of a cashier-less, and brick-and-mortar retail store, which will be in direct competition to Amazon Go. For this purpose, Walmart has maintained two tech incubators in California and Texas respectively for experimenting all its new ventures.
A couple of years ago, Walmart purchased Jet.com in an effort to consolidate its presence in the retail market. To stay in the race, the retail company made a few more deals like the partnership with Alphabet’s Waymo for the transportation of the customers, then with Uber, Lyft, and Postmates for grocery delivery and Rakuten for Kobo e-readers.
Not only this, the retail corporation is planning to take on Amazon Prime Video with its Vudu subsidiary by the end of the year.
Here, one thing is obvious, Walmart is desperate to match the Amazon’s revenue model and success. Both the companies have their primary say in the retail market, but they are aggressively looking into other prospects also like on-demand delivery and cashier-less stores.
On the other hand, Amazon is fast catching up with all the retail marketing trends and to counter other giants; Jeff Bezos company acquired Whole Foods, a supermarket supply chain that specializes in selling organic products. The e-commerce company has strapped it with Prime service that will help in delivering goods to far away places.
Robert Hetu, Research Director of the Gartner Retail Industry Services, says, “When I think of Walmart, it’s not so much to me that they want to keep up with Amazon. I think clearly if you look at it historically, you can say Walmart missed an opportunity that Amazon captured, but I don’t think Amazon took business from the other.”
If we look at the financial numbers, Amazon comfortably outruns the Walmart. Don’t get fooled by the staggering revenue Walmart generates, which is $500 billion in annual sales. These numbers agreeably make it the top corporation in the US, in terms of yearly revenue earnings. But the difference lies in the razor-thin margins compared to the operational costs, which is apparently enormous. Considering the employee strength, Walmart single-handedly employs more than 2 million people worldwide, and 1.4 million of them are in the US alone. Due to these facts, investors consider former company worth to be the quarter of Amazon’s $1 trillion market valuation.
So, it makes sense when we see Walmart fiercely competing. According to Hetu, the company which will better analyze and understand the human behavior will outshine the other. Also, the grocery and retail battles are just the beginning, both the companies will undoubtedly look to take it forward.