Walmart is a sleeping giant in the world of e-commerce. Despite double-digit growth in recent years, its e-commerce business is still less than one-quarter of Amazon’s. The giant is waking up, however, now offering two-day free shipping without a membership fee (there will be no Walmart Prime) and introducing a cleaner and more modern e-commerce website.
In addition to better photography, newer fonts, and more color, the revised site will include specialty shopping experiences, such as fashion, beauty, and groceries and feature a more personalized and local angle, like alerting customers to fast-selling items in their area.
Consumer spending habits are changing in ways that might help Walmart. Rather than buying in bulk once-per-month (the Costco model), people are starting to purchase more frequently and in smaller quantities, using physical stores to browse before going home and buying online. This is bad news for Costco but good for Walmart, which doesn’t care if you purchase from one of its stores or its website.
Amazon understands this spending-habit change and is building its own brick-and-mortar footprint (Whole Foods, Amazon Go, Amazon Books), but that will be a laborious and expensive process if it wants to match Walmart, which already has 11,000-plus physical stores.
In a sense, Amazon and Walmart each have what the other one needs, and so, barring a highly unlikely merger, it will be a race to see which one can put together the most effective omnichannel strategy consisting of in-store sales, online sales, pickup and delivery.