Walmart Wins Round 3 Against Amazon
Walmart and Amazon have been playing a grueling boxing match for years and Walmart finally won a round. Walmart announced their second-quarter results last week and investors loved what they heard sending the stock price up nearly 10%.
It wasn’t Walmart’s comparable sales in the grocery department, its best in nine years that resonated with investors. It was their omni-channel strategy that's starting to pay off that led to a the better-than-expected 40% jump in online sales. The strategy involves shoppers going online for some purchases or visiting the brick-and-mortar stores for to purchase items or sometimes do a combination of the two, such as buying a barbecue grill online and picking it up at the store, along with charcoal and burgers. In the past two years, Walmart has added more than 700 “automated pickup towers” for customers to pick up online orders of general merchandise, hoping that they remembered they need milk and eggs as well when they arrive at the store.
Walmart has also overhauled their website and spent a pretty penny to purchase retail sites Jet.com and Bonobos, a seller of men’s clothing.
“Our omni-channel initiatives are contributing to comp sales growth and providing customers with new levels of shopping convenience,” Walmart president and CEO Doug McMillon said in prepared remarks. “To help deliver a more compelling store experience, we continue to bring digital capabilities to our stores to deliver a seamless experience for customers, however they choose to shop.”
Amazon complimented Walmart’s omni-channel strategy by announcing it too was introducing grocery pickup at certain Whole Foods Market stores. However, Amazon can’t match Walmart’s 4,800 US stores (there are less than 500 Whole Foods). To put this in perspective, Walmart has a store within 10 miles of 90% of the population.
NOTE: Pay attention to Target, they might be Amazon’s next buyout candidate.
From a far, Amazon and Walmart envy each other, so much that they want to be like each other. Amazon, king of e-commerce. Walmart, king of brick and mortar.
Walmart's acquisition of Jet.com the beginning of being able to compete with Amazon online. But then Amazon turnaround and acquired Whole Foods Market to compete with Walmart in the grocery space. However, the stock price of each company tells a different story.
While Walmart shares are up almost 25% in the past year.
Amazon's stock has climbed more than 90% over the same time period.
Thus, my money is on Amazon to ultimately win the boxing match by a majority decision.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
Given the resources these behemoths have, the war will rage on for some time into the future. Not sure if we will ever see a clear winner.
Agree, there's room for both and every industry/sector has a 1st and 2nd place winner.
Nice read. I leave an upvote for this article thumbsup
Thanks @tomask-de
That chart on Amazon looks like a bubble that is due for a correction.
lol, yes it does, what goes up, must come down.
Very nice article good job brother
Thanks @kuldeeprandhawa