Walmart is the world’s largest retailer and private employer. It is also the biggest company if you order by sales. In 2015, Walmart’s sales amounted to $482 billion which is approximately 2X Apple’s revenues. However, now Walmart finds itself in a new landscape in the retail industry due to the influx of online shopping.
E-commerce is growing rapidly in America, accounting for 10 percent of dollars spent in 2015, an increase of 15 percent over 2014. Amazon’s North American sales grew about 30 percent. Walmart is currently receiving 10.6 percent of American retail sales which is more than double Amazon’s right now. However, Walmart’s share peaked in 2009 at about 12 percent. As a result of these numbers, Walmart announced in January 2016 that it was closing 154 stores. That number may not be enough.
Space vs. Time
Walmart’s claim to fame is large supercenters with a wide variety and low prices; however this concept is not as attractive as it once was. Other discounters are matching Walmart prices while Amazon has stock availability and fast, convenient shipping. Walmart was built on the idea of saving money. Amazon’s best feature is that it saves customers time. While retaining the essence of a big-box retailer, Amazon has specialized in strategically place warehouses and speedy deliveries. The company is continuing to develop new features to mobilize fast fulfillment.
Walmart Fights Back
Walmart is working to fight back by offering more goods to its customers online and in stores. It is looking for ways to save money by cutting out waste in its operations. Details such as shipping in fewer boxes to save on cardboard and reducing buttercream icing usage in baking are ways that Walmart can reduce costs without imparting customer satisfaction. However, this fight is not offering much in hope for repelling Amazon in its surge ahead.
Walmart’s biggest asset is its size and its in-stock availability. Ninety percent of Americans live within 10 miles of a Walmart-owned store. It can ship to customers or for store pick up and has a vast grocery business selling perishables which are difficult to sell online.