Amazon is outstripping rival Walmart. How are they doing it and can they sustain this growth?
Amazon has really put themselves in a great position in many dimensions; as an early adopter of e-commece retail, they used their grace period and early lack of profitability to focus on building and strenghtening infrastructure, processes, technology, and execution.
While Walmart was focusing on creating brick and mortar super centers and trying to transition toward “fresh” concepts, Amazon perfected the model of speed to market in terms of last mile delivery. Amazon’s ability to go from second day, to same day, to delivery in an hour in some markets, combined with with verity of service models, makes it much more nimble and agile with current shopping behaviors. Meanwhile Walmart’s brick and mortar model is falling behind. Walmart was known for being a logistics company, but lack of focus on dot com and instead putting energy and resources into creating a core competency on omni-channel has generated a great disadvantage. They will struggle to change the model in time to produce serious competition in the minds of consumers.
Walmart cannot compete with Amazon unless something fundamentally changes with Walmart’s business model ; meanwhile Amazon is quite set for growth for longtime to come.Profitability is the next step, and it will come.