The second company I will review is Walmart. As you know, Walmart is a retail company and the largest retail company in the world. It is a giant in terms of revenue and number of employees (the number of employees was last 2.3 million, which is more than the number of soldiers in many countries). With the rise of Amazon and the rapid shift of people to online shopping, Walmart could not remain indifferent and decided to act as an online marketplace years ago, forming the core of the Walmart e-commerce strategy. Their growth rate has slowed down in recent years (as you know, considering the slowdown in the economy), but they are still doing well.
Introduction: The competition between Walmart and Amazon is intensifying in the e-commerce space. While Amazon leads the e-commerce sector, Walmart is a pioneer in physical retail. Walmart aims to counter Amazon’s dominance in e-commerce by leveraging its extensive physical store network and robust supply chain.
Business Model: Walmart’s strategy is to integrate its physical stores with its growing online presence to create an omnichannel experience. The company aims to provide a seamless shopping experience by leveraging its logistics advantages, competitive pricing, and strong supplier relationships.
Key Strategies and Innovations:
Proximity Advantage: With approximately 4,756 stores in the U.S., Walmart uses its existing infrastructure to offer fast delivery services, giving it an edge over Amazon.
Competitive Pricing and Delivery: Walmart challenges the Amazon Prime model by offering competitive delivery options such as free next-day delivery on orders over $35 without a subscription fee.
Omnichannel Integration: Walmart integrates its online and offline operations, allowing customers to order online and pick up in-store, providing convenience and cost savings.
Data Utilization: Walmart uses data collected from physical locations to predict shopping habits and personalize the online experience, similar to Amazon’s data-driven approach.
Advantages of Selling on Walmart:
Large Customer Base: Walmart’s extensive customer base and high traffic provide significant visibility and sales potential for sellers.
Efficient Logistics: Walmart’s logistics network offers advantages in order processing and timely delivery.
Integrated Shopping Experience: The seamless integration of online and offline shopping enhances customer satisfaction and loyalty.
Competitive Fees: Walmart offers lower selling fees compared to Amazon, making it an attractive platform for sellers.
Challenges of Selling on Walmart:
Strict Approval Process: Walmart’s stringent approval processes and performance standards can be challenging for new sellers.
Price Matching Policies: Walmart enforces strict price matching policies, requiring sellers to maintain competitive pricing.
Lower Sales Volume: Compared to Amazon, Walmart’s online sales volume is relatively lower, affecting the overall sales potential.
Competitive Advantages Over Amazon:
Physical Store Network: Walmart’s vast physical store network provides logistical advantages and supports services like grocery shopping.
Cost Efficiency: Walmart’s efficient logistics and cost-effective delivery options offer price advantages, especially for shipping heavy or bulky items.
Customer Loyalty: Walmart’s brand recognition and customer loyalty, especially in groceries and household items, provide a solid foundation for e-commerce growth.
Strategic Acquisitions: Walmart’s acquisitions of various e-commerce platforms and brands have expanded its online product range and market presence.
Information Warfare: Both Walmart and Amazon use customer data to enhance the shopping experience. Amazon’s features like one-click ordering and personalized recommendations set high standards, but Walmart aims to offer similar benefits with its Walmart+ service.
Creating a Related Ecosystem: Walmart seeks to go beyond traditional retail by offering services like financial and healthcare services. This approach aims to boost customer loyalty and create a more sustainable revenue model.
Walmart’s E-Commerce Performance:
E-Commerce Sales Growth: From 2019 to 2023, Walmart’s annual online sales more than tripled, with an average annual growth rate of 36.6%.
2019: $25.1 billion
2020: $39.7 billion (58.2% increase)
2021: $64.9 billion (63.5% increase)
2022: $73.2 billion (12.8% increase)
2023: $82.1 billion (12.2% increase)
Sales Distribution by Segment (2023):
Walmart U.S.: $53.4 billion
Walmart International: $20.3 billion
Sam’s Club: $8.4 billion
Online Sales Trends: The COVID-19 pandemic increased online shopping, boosting e-commerce sales.
Customer Reach and Market Presence:
Walmart serves over 37 million customers daily and more than 230 million customers weekly.
In January 2024, Walmart.com received 401.5 million visits.
In the fiscal year 2023, Walmart’s e-commerce sales reached $82 billion, growing by 12% annually.
Customer Demographics:
30% of online shoppers on Walmart.com are aged 23-38.
50% of these shoppers are married or have children.
Walmart has a high level of customer loyalty, with 92% of all shoppers remaining loyal to the brand.
Logistics and Supply Chain:
Walmart operates 210 distribution centers, with 42 being U.S. regional centers.
Walmart’s shipping fleet consists of 80,000 trailers and 9,000 tractors, covering over a billion miles annually.
Project Gigaton aims to reduce supplier emissions, helping Walmart prevent 416 million metric tons of emissions since 2017.
Conclusion Walmart is strategically positioned to compete against Amazon by leveraging its physical store network, efficient logistics, competitive pricing, and strong supplier relationships. By expanding its digital presence and integrating various services, Walmart aims to challenge Amazon’s dominance in the e-commerce arena.
References:
[Walmart’s Annual Report](https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1075&context=finnuht)
[Walmart vs. Amazon: The E-Commerce Battle](https://shopify.com/enterprise/walmart-vs-amazon)
[Walmart Facts and E-Commerce Statistics](https://sellerapp.com/blog/walmart-facts-ecommerce-statistics/)
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