How Walmart Competes with Amazon

By November 16, 2018Price Match, Walmart

While they previously haven’t had to compete too much for their customers’ loyalty, Amazon and Walmart have entered a war in recent years to see who can come out as the top provider for everyday goods. The rivalry has caused many changes that reach as far as cloud computing, grocery delivery and even streaming video, but amidst these changes, the real winner has been and continues to be the consumers.


Reshaping How Consumers Consume

Walmart, as a corporation, has continued to evolve to fit into the ever-changing digital world that their consumers find themselves in. These changes include the fact that they recently switched their entire cloud operation over to a Microsoft-operated server. For those of you who don’t know, Microsoft is the direct cloud computing competitor of Amazon which might, at first, seem like a shady move. However, upon analyzing the move deeper, it’s a smart business strategy on behalf of Walmart.


Walmart’s Venture into Other Streams of Revenue

A partnership between Microsoft and Walmart can allow Walmart to develop cashier-less retail stores in order to compete with Amazon Go while also investing in other innovative technologies to increase their overall profits across different industries. This comes as a huge benefit to Walmart due to the fact that, while they earn more revenue than any other corporation in the US, their margins remain low due to high operational costs.

Whereas Amazon has always reaped the benefits of the low operational costs that an online marketplace provides, they have also invested in cloud computing and other innovative technologies that have allowed them to evolve into a $1 trillion business. Walmart’s move signifies that they’re ready and able to compete.


Building a Reliable Logistics Network

Seeing as groceries are an $800 billion business in the US and is geared towards grocery delivery, Walmart’s ability to compete lies in establishing a reliable logistics network in order to outplay Amazon. Analysts note that, in addition to partnerships with Uber, Lyft, Waymo, and Postmates, Walmart is working to expand their grocery delivery service, which only costs $9.95 per order with no subscription required, into 100 metro areas by the end of 2018.

Walmart is a strong contender in this aspect as they have more physical locations around the country that provide them with quicker, easier access to their customers as well as the option of drop shipping items from a store to anywhere in the country.


Walmart’s E-Commerce Efforts Paying Off

All of the retailer’s hard work and investment in innovative technology seems to be paying off, with the main buzz surrounding the 2017 financial report being the massive increase in e-commerce sales. Walmart’s online sales grew by 60% year over year, and while those numbers are staggeringly impressive, to continue to compete they will have to continue to analyze consumer behavior and understand what they really want out of their grocery shopping experience and beyond.


How to Get the Everyday Low Price Guarantee

These types of changes, investments and partnerships allow Walmart to continue to offer their everyday low price guarantee. With a business strategy that originally focused on selling a lot of units at a very low price, the retailer has been able to grow into a source of groceries, clothing, tech and everyday items that are sold at a low price. However, Walmart continues to compete with Amazon by also offering an outstanding price match policy that ensures they’ll honor the price of an item if you find it cheaper somewhere else. This translates into even bigger savings and happier customers.

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Elizabeth Thorn

Author Elizabeth Thorn

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