Shopping these days have never been so concentrated on a few key players in the industry. Whether it's for your needs for new kitchenware, last-minute holiday items, birthday gifts, and even groceries, most can now be found on the shelves of the top 2 retailers in the world: Walmart and Amazon.
Walmart, the highest revenue-generating company in the world, has long established itself as a powerhouse in the big-box grocery chain world. Centred largely within Western spheres, Walmart has since expanded to roughly 10,000 different affiliated stores worldwide. It is showing no signs of slowing down its efforts to continue its domination in the retail space.
Amazon, on the other hand, has been one of big tech’s favourite success stories ever since it started in Jeff Bezos’ garage in 1994. Once just an online platform focusing on the business of books, Amazon has since expanded rapidly into almost every aspect of retail there is to peruse, from electronics to even furniture.
A large part of the success of both of these companies is their innovations in their various business practices, especially with how they manage their inventory and, ultimately, the fulfilment of orders. But when put head-to-head, which company takes the crown, Amazon or Walmart?
First up in our analysis is the once-start-up darling Amazon, which today is topping $900 billion in market capitalization, effectively making it one of the most valuable companies in the world. But it only reached that by finding ways to consistently innovate in the spaces in which it operates.
Amazon is known to be one of the most advanced companies operating in the retail space today. To reach such a competitive level amongst many established groups, Amazon made key innovations in two prime areas of their supply chain: logistics and warehousing.
Writer Steve Banker shares with Forbes how Amazon had vertically integrated itself within its supply chain by combining the powers of land and air through its Amazon Trucks and Prime Air services, while also maintaining fast order management through their state-of-the-art warehouse techniques. No wonder that one-day delivery is such a key selling point to their Prime customers.
Amazon is, at least for the current moment, the undisputed king of e-commerce. Their breadth and scope of goods being managed under one banner platform dwarf many by comparison, and their customer experience is always at the forefront of any transaction, before and after, to ensure that buyers always walk away happy.
But it’s not just the attention to buyers that keep Amazon at the top, it’s focused on the sellers as well. Almost anyone can start selling on Amazon simply by setting up an account on the website. Fulfillment can also be managed by Amazon themselves, leaving the last mile of transaction completion in the hands of experienced logistics managers within the company. As such, Amazon currently boasts about 1.9 million active sellers on its platform.
Amazon isn’t just sitting on its laurels, as even now at the top of its game it is continuing its search for more efficiencies in its warehousing and logistics. In the past few years, Amazon announced and finalized the acquisition of Kiva Systems as a key part of its plans to elevate its current supply chain.
For those who might not be aware, Kiva was a robotics company that focused on order fulfilment for other e-commerce sites like Zappos but has since been scooped up by Amazon and rebranded as Amazon Robotics.
Walmart is by no means taking this shift in industry focus without fighting. They’ve also begun pumping up their efforts to take on the rising consumer preference for online shopping by developing their own systems to cater to such.
One of the biggest things Walmart has done this year was the acquisition of Boston-based robotics company Alert Innovations. Alert is planned to be used in the fulfilment of the different orders and warehouse management in Walmart’s Main Fulfilment Centers, or MFCs.
These MFCs are some of the main hubs in which regional Walmarts source their products for their retail locations as well as begin to fulfill orders for online shipments as well. It’s envisioned with this acquisition that Walmart can reach their customers quicker and with better efficiencies.
Walmart also has the advantage that relative newcomers like Amazon and other e-commerce heavy retailers don’t: physical locations. The Walmart brand remains one of the highest earning companies in the world as part of their continued service towards the traditional shopper that prefers to buy their goods in-store.
Walmart continued to innovate in this space by introducing Local Fulfilment Centers, or LFCs. In the wake of the pandemic, Walmart had transformed some of their groceries to include smaller warehouse units that allowed them to stock goods that were in high demand, allowing them to whether the rapid influxes in consumer need were brought about by uncertain times.
A strong case for Walmart is also in its breadth of experience in the industry itself. The company is known to have weathered more troubles in the past, including different ventures into new territories.
Despite Amazon having a strong foothold in the online market, it’s not easy to deny that Walmart can keep itself financially healthy too. Compared to Amazon, Walmart is showing a strong business status by reaching as much as 11.98% year-on-year growth. Amazon this year showcased an anemic -4.61% growth so far.
Amazon might be the interesting and cool kid on the block with all the fancy gadgets, but Walmart has been playing in this field for just as long as Amazon has with a lot of physical success to show for it.
If you’re looking at it from a digital lens, Amazon seems to be the clear winner as it does have almost a commanding lead in e-commerce compared to all its competitors. But Walmart is slowly catching up and may take a significant share if Amazon is caught slacking in its innovation efforts.
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