It was bound to happen. Another retailing giant, Walmart, is finally coming for Amazon – and likely from an avenue they did not expect. And certainly from one against which Amazon cannot effectively compete. Let’s see what Walmart+ has in store for online and how it’s about to shake up the ecommerce landscape!
eCommerce is Booming
eCommerce is the commerce these days. And those in the know are forecasting exceptional continued global growth through 2027. “The globalization, digital revolution and increasing penetration of internet has revolutionized the international trade of goods. The aforementioned factors have evolved and made business transactions easier and more effective, which not only has a positive impact on the business of companies but also contributed to the positive growth of the economic structure of nations.”
And after taking online by storm in its own right, Amazon paused to regroup and conquer the brick and mortar space it nearly decimated with “Go” stores. Although in their infancy, they come with formidable implications.
Amazon “Go” Stores Aren’t Going Away
Ever watchful, and inspired by the growing prevalence of self-checkout, Amazon’s CEO Jeff Bezos saw a need to fill. And it was one that many consumers may not have even realized they wanted – but that’s precisely the kind of market intelligence he’s keen on capturing. “Bezos believes customers don’t often know what they want and it takes daring businesses to sort it out for them:
For example, smart speaker Echo with voice assistant Alexa was released in 2014. At the time, Bezos says, a customer would not have even known to want an anything of the sort.
“No customer was asking for Echo. This was definitely us wandering. Market research doesn’t help. If you had gone to a customer in 2013 and said ‘Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?’ I guarantee you they’d have looked at you strangely and said ’No, thank you,” Bezos writes in his 2018 letter.
So, how then, did Amazon miss out on this latest dramatic consumer shift that Walmart has picked up on so expertly? Well, Amazon didn’t – not entirely.
Genius of Walmart+ Same-day Groceries
Amazon may have 40% of online sales locked down thanks to Prime, but Walmart may be about to close that gap – and possibly with a quickness too. And it’s something Amazon can do nothing about, really – delivering same day groceries at a budget-friendly price.
But why can’t Amazon compete? It has Whole Foods in the family, after all – and they offer two-hour grocery delivery windows to Prime members. But this is only available in certain locations, initially only in 48 cities throughout the U.S., and the organic-focused grocer (Whole Foods) is not known to be price-friendly for cost-conscious families regardless.
And this is precisely what Business Insider discovered when it compared the shopping experience between the two: “The low prices and vast selection at Walmart made the shopping experience there vastly superior to the one at Whole Foods.” Add to that Walmart’s widespread availability, and it blows Amazon out of the delivery cornucopia.
“Go” Has to Get Moving
“Go” stores could offer the same competitive pricing, as they could be stocked with smaller vendors’ wares, but Amazon isn’t “there” yet. Although it has a smattering of “Go” stores located in busy urban areas, they are not grocery stores by any stretch, and they aren’t capable of fulfilling numerous consumer orders. There are only 21 of them in operation right now, and the way they operate is pretty next level – possibly a bit ahead of its time even:
When you’re ready to shop at Amazon Go, you must scan your barcode in the app as you walk into the store. Then, you can take whichever items you want and simply walk out of the store.
The Amazon Go store has sensors that track what you take off or put back on the shelves. When you leave the store, your Amazon account will be charged for the items you left the store with, and you can check your receipt in the app to make sure it is correct.
And even if they upped their inventory to be able to do so, creating the infrastructure to then offer same-day grocery delivery would entirely change the stores. It would be incredibly unworkable actually, considering their current “Go” business model. And it’s one that Amazon likely wants to hold on to, as it’s bound to take off once people wrap their minds around using them.
But for right now, looking at the conversation happening about Walmart and Amazon, we can see the conversation is already shifting toward Walmart+ and this incredible. It’s also an incredibly timely new food shopping option, considering the coronavirus impact:
Other Convenience Options
Everyone is all about convenience these days, particularly in light of the coronavirus. With families stuck inside and as “social distancing” becomes the norm over the next few weeks, brands positioned to get goods and services to consumers in a timely fashion have an opportunity.
And no, this is not about benefitting from a pandemic, but about adding value to consumers’ lives by offering much needed items during a stressful time. It’s amazing CX for those able to pull it off. It’s also about generating goodwill toward both your company and your offerings.
More to Come from Walmart?
There are rumors of the retailing giant offering prescriptions and gas discounts in the near future as well – another set of offerings that Amazon will be hard-pressed to compete with: “Perks like prescription drug and fuel discounts could provide an edge, since they are frequent purchases and Amazon doesn’t own gas stations or its own brick-and-mortar pharmacies.”
Time will tell if these rumors become reality, but as it stands – Walmart+ is destined for great things. And other ecommerce contenders can be as well. There’s a big place to play online, but your brand needs competitive market intelligence to back up next steps. Are you ready to make your move? Reach out for a demo and we can help you better understand your category and ways to approach it!