One started out with bare bones discount stores on the edges of small towns, far from the retail mainstream. The other began selling books when most people still called it the Information Superhighway...even if they didn’t know how to get on it.
Fast forward several decades and Walmart and Amazon are the biggest players in American retailing, each generating more than half a trillion dollars in annual revenues, the vast majority from retail sales. Each sells virtually everything to virtually everybody and they have expanded into media, digital services and all kinds of ancillary businesses far removed from their humble beginnings.
They are also increasingly on a collision course with each other, determined to be the king of the retail hill. This may not be a fight to the finish as both companies are expected to exist and indeed prosper simultaneously. But for those competitors who get in their way – and for the suppliers who sell them are and are increasingly only a fraction their size – this is shaping up as the biggest retail battle ever.
While these are giants with hundreds of millions of business transactions competing head-to-head in consumer product categories like apparel, home furnishings, groceries and health and beauty, they do differ in some critical ways.
First and most obvious is their customer interface. Walmart has more than 4,000 stores in the U.S., the vast majority supercenter formats combining general merchandise and groceries. After a late start to the online world, it now generates more than $100 billion in e-commerce revenues, representing around 15% of its total volume. Its non-retail businesses are relatively small but are growing quickly, being touted as a major area of expansion for the company.
Amazon is of course the king of e-commerce and it is believed more than four of every ten dollars spent online is spent at Amazon. Its overall annual revenues, now near $600 billion, are closing in on Walmart but only about half of that is from its own retail business. The rest comes from third-party marketplace sales, web services, advertising and other non-retail sales, most of which are underdeveloped at Walmart. Counting its Whole Foods unit, Amazon operates about 600 physical locations which generated about $5 billion in annual sales, a tiny amount compared to Walmart.
But there are other differences. New research shows that consumers, on average, spend about twice as much per year at Walmart’ online versus Amazon. While Amazon is generally credited with faster deliveries and logistics, Walmart is recognized for having a higher emphasis on sustainability and eco-issues, according to a report from website stockarea.io.
When it comes to global presence, the site says, “Amazon has a significantly larger international presence, being available in nearly 180 countries and accounting for about 13% of global e-commerce sales. Walmart is only available in 28 countries worldwide.”
The report ultimately comes to the conclusion that “Amazon is winning the battle to become the largest retailer in the world. With its superior customer service and e-commerce dominance, Amazon will continue to be the most popular e-commerce platform and also advance in the physical retail market. Amazon may also beat Walmart in revenue in the coming years with its increasing growth rates.
“However, Walmart will retain its position in retail commerce as Amazon primarily operates online. The rivalry between these two retail giants will be inevitable. Amazon and Walmart will continue to mirror and compete with each other’s business strategies.”
And the real winner? “The actual winner is the consumer, who is greatly benefiting from this interminable competition. As the two brands compete for dominance in the retail industry, customers benefit from superior customer service, increased innovation, and an expansion of product offerings. Amazon and Walmart are undoubtedly altering the retail landscape and encouraging each other’s continued growth and development.”