Your biggest competitor may not be Amazon
Every retailer is developing strategies to compete with Amazon, but another rival lurks in the background.
In the late ‘90s and early ‘00s, conventional wisdom held that every retailer was in competition with Walmart. The discount giant sold every product, could beat anyone on price, and operated with ruthless efficiency. Walmart’s entry into e-commerce in 2000 was an important signifier that online sales were here to stay.
Since that time, Amazon has taken Walmart’s place as the omnipresent retailer who can undercut any price on any product. Amazon’s entry into the brick-and-mortar space in 2015 signified that physical stores are here to stay. Walmart has hardly disappeared, but generally trails Amazon in discussions of what company poses the most threat to its fellow retailers.
This view is shortsighted. Retailers should see Walmart as equally, and possibly more, challenging than Amazon. Here are three factors that position Walmart to steal market share from anyone, including Amazon.
Having opened its first local five-and-dime store in Arkansas in 1962, Walmart now operates over 5,000 locations across the U.S. and Puerto Rico. Amazon operates about 10% of that total, of which more than three-quarters are Whole Foods stores it purchased in 2017.
Amazon will likely operate thousands of brick-and-mortar stores, mostly under its own banner, within a few years. But it will still have decades of catching up to do with Walmart in terms of understanding how to fulfill, staff and merchandise them. As brick-and-mortar stores become more crucial to e-commerce, Walmart’s dominance in the physical space should only grow as an advantage.
Walmart is taking a leading-edge approach to store associate training with virtual reality (VR) technology. To safely recreate high-pressure store scenarios, Walmart employs Oculus Go VR headsets for onsite training and Oculus Rift VR headsets for training at its 200 regional employee academies. Employees view VR videos filmed in actual Walmart stores that recreate a wide variety of real-life events they will likely encounter.
As a result, Walmart can deliver highly realistic, interactive training content across the organization in an efficient, streamlined manner. This helps ensure that customers visiting brick-and-mortar stores, including online shoppers picking up their orders, receive courteous service in a clean, safe environment.
Amazon is an established leader in developing proprietary technology that improves operational efficiency and omnichannel customer experience. However, Walmart is also one of the biggest technology innovators in the industry.
Walmart’s Store No. 8 tech incubator has produced a number of disruptive innovations, such as the recently shuttered Jet black, a text-based, personalized shopping service. The discount giant intends to leverage technological features of Jet black, such as the ability to place text orders and insights gained on what types of products consumers prefer to purchase via text, across its mainstream business.
In addition, Walmart gleans valuable real-life insights from Store No. 8’s “Intelligent Retail Lab,” or IRL. The 50,000-sq.-ft. store is set up to gather information through an array of sensors, cameras and processors. Initially, Walmart is using the IRL to test how real-time information provided by AI-based store systems can inform associates more precisely when to restock products.