Stepping Up the Game: Amazon and Walmart
Walmart and Amazon have had their sights on each other for years, each aiming to replace the other to become the dominant seller of goods. With Amazon buying the high-end grocery chain Whole Foods last year, the cold war between America's two largest retailer giants just turned hot. But this is more than a battle just between two business titans; their rivalry sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages.
“Brick-and-mortar stores versus online retail”, Walmart and Amazon represent two sides of the U.S. economy locked in a bitter feud. In the past few years, each one is trying to become more like the other through innovation and acquisition. Amazon is already the clear leader in online retail and it has stepped up its presence in the physical retail world thanks to its purchase of Whole Foods and opening of Amazon Books stores in many big cities while Walmart, on the other hand, is becoming a bigger player in digital due to the purchases of Jet.com and specialty online retailers ModCloth, Bonobos and Moosejaw.
One of the most obvious recent examples is Amazon’s steeply slashing prices of Whole Foods' most popular items to bring customers in and increase store traffic. The strategy is likely familiar to anyone who knows Walmart's story. Faced with the threat of Amazon encroaching on its turf, Wal-Mart has been rolling out initiatives like "easy reorder," free two-day shipping with no membership required, and an online grocery service, which is slated to hit 1,100 Wal-Mart stores last year.
Looking ahead, both retailing giants are evolving into a hybrid of physical stores and online-ordering channels, and each company is coming at the goal from a different starting point. With the retailing industry becoming more concentrated, the idea of a relative few winners are taking a disproportionate share of business in a wide range of industries, including banking, airlines and telecommunications is becoming the reality.