The battle for retail distribution supremacy is at full blast as US retailer Walmart wants to trail Amazon’s vast distribution chain with strategic alliances and other tactics in a world where retail consumer behavior changed after the Coronavirus pandemic. Walmart wants to diversify and expand its sales by investing into advertisements, using its physical space stores, and improving their distribution chain to better cater the demands of their customers.
Inventory: Amazon’s Strength
Amazon’s entry into the retail business put them into direct competition with the long-running retailer in the US, Walmart. When it comes to e-commerce, Amazon is the leader, capturing over 40% of the market. When the coronavirus pandemic shifted consumer’s behavior, online dominance became crucial for retailers. Amazon has a vast upper hand in e-commerce, the American holding has a strong grasp of distribution chain aspects, the largest inventory on the face of the earth, and an authoritative brand name, which consumers immediately associate with delivery.
Walmart knows it can’t reach Amazon’s grasp of the distribution chain, so its using all of its assets to create a rival membership program to chip away at Amazon’s loyal customer base. Walmart+ will offer its members benefits that can’t be replicated online, a strategy they’ve been developing for the past two years. The covid-19 spike sent Walmart’s plans into review, as the entire industry has to change its commerce practices for safety operational standards. In its initial stages, Walmart+ members will receive same-day delivery groceries from more than 1600+ stores in the US.
I Want It Home, And I Want It Now
Consumer behavior trends show that those affiliated to premium memberships like Amazon Prime will likely affiliate to another premium membership like Walmart. 90% of the population in America lives within 10 miles of a Walmart store, which puts the retailer in advantage. The bulk of Amazon Prime’s customers joined that program because of faster free shipping, so for Walmart+ the endgame is to leverage what they already have in groceries and maybe what Amazon doesn’t.
Walmart tested in California same-day grocery delivery with good results, the Walmart+ membership program could include, early access sales, fuel station discounts, rebates and offers in their physical stores. While Walmart is aware that they can’t blatantly antagonize their competitors, they are innovating in their fashion a way to captivate the consumers.
Standing on the Shoulders of Giants
When Amazon launched its Prime membership program in 2005, offering one to two-day shipping, at a moment where Walmart’s revenue was greater than all of Amazon’s. Fifteen years later, more than 150 million members pay $119 US dollars a year for one-day shipping on more than ten million items, same-day shipping on three million items and two-hour grocery delivery in more than two-thousand cities. Prime offers access to deals and sales events, and gives access to Amazon’s online entertainment branch, who offers music, video, books, gaming and photos.