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Walmart Vs Amazon: Amazon is always the first thing that comes to mind when discussing the biggest online stores. In 2018, 14.3% of all retail sales were done online, and 40% of online retail in the US is done on Amazon.
But Walmart is quickly catching up to Amazon as it continues expanding its online shopping options and marketplace for 3rd sellers. Walmart’s online sales grew by 40% in 2018, making it the third-biggest online store in the country. Between early 2017 and early 2019, the number of people who bought from Walmart online grew by 207%.
Here are some problems that Amazon and Walmart have to deal with.
Walmart’s biggest weakness is that it doesn’t have enough experience and know-how with eCommerce. Walmart isn’t as old as Amazon when it comes to selling online, but Amazon was built from the ground up to sell online. Before Walmart bought Jet.com in 2016, the company barely paid attention to eCommerce.
Walmart also uses a different strategy for placing products on the market that is less helpful to sellers. To get a spot in the exclusive Buy Box, the giant big-box store requires sellers to list the lowest price they can find online, not just on Walmart.com. Walmart has a lot less help for sellers on its platform as well.
Walmart has more than 11,000 brick-and-mortar stores, which is much more than Amazon has. 90% of people in the United States live within 10 miles of a Walmart. Amazon opened Amazon Go stores and brick-and-mortar bookstores, but it still has a long way to go to catch up with Walmart’s physical footprint. Amazon is known for copying the most popular items from third-party sellers, putting its label on them, and selling them for less.
On the other hand, Walmart is less likely to put out a line of products that will compete with those sold by third parties. Amazon is willing to sell products that don’t make money to keep client satisfaction as high as possible, even if it hurts third-party sellers on its site. When people sell on Amazon, they have to take this unpleasant risk.
Walmart and Amazon have different problems, and the two eCommerce giants have different strengths.
Walmart is the biggest grocery shop in the world. Amazon owns Whole Foods and offers grocery delivery through Prime Now, AmazonFresh, and Prime Pantry. Walmart lets you pick up groceries the same day at tens of thousands of stores, has grocery delivery in a few cities, and gives free two-day shipping on food and household items over $35 that you buy online.
In 2018, Walmart’s online food sales went up 53%, while Amazon’s only went up 8%. Lastly, Walmart has delivery options that are easier to use than Amazon. Walmart has several free shipping options that don’t require a paid subscription. Walmart offers, depending on where you are:
Unlike Amazon’s more expensive Prime memberships, which no longer guarantee shipping in two days, Shipping from Walmart is much less expensive. Walmart.com’s marketplace has come a long way in a short amount of time in terms of targeting, ad types, reporting, and the general level of sophistication of the platform. Brands that want to grow their online sales beyond Amazon should consider selling on Walmart’s online marketplace.
The best thing about Amazon is that it focuses on technology, innovation, and everything digital. Amazon’s share of digital advertising spending is expected to rise from 3% in 2018 to 8% in 2023. Amazon Web Services (AWS) is the part of Amazon’s business that is growing the fastest and making the most money. Amazon has added more services to its AWS cloud to reach more clients.
Walmart recently added a self-service option for placing ads on its website, but it has a long way to go before it can offer sellers as many ways to advertise as Amazon does. The third-party marketplace on Amazon is also much more well-known than the one on Walmart. Amazon says that its third-party products make up 50% of its sales.
Amazon also has a lot of power in the clothing market, thanks to Prime Wardrobe and the fact that it bought Zappos in 2009. They also make their clothing lines. Amazon has over 75 private label brands, and more than half are clothing lines. The Prime service is one of the most popular things about Amazon.
More than 100 million people in the US subscribe to Amazon Prime for $13 or $119 a year. This gives them access to free shipping, video content, music streaming, ebooks, and more. Prime members also get free shipping on items that can be sent in two days, one day, or even the same day. With FBA shipping, third-party sellers can take advantage of Prime shipping, which is very popular, especially with millennials.
Amazon’s marketplace has existed longer, so more sellers and buyers exist. To be successful as a third-party vendor on Amazon, sellers should engage in an online marketing and Amazon advertising strategy. Amazon lets anyone make a seller profile, and the Professional selling plan costs $39.99/month for merchants.
Walmart doesn’t charge sellers any account or monthly fees. Instead, they only start charging sellers a referral fee of between 6% and 20%, based on the product category. But all sellers who want to sell on Walmart’s marketplace must first get Walmart’s approval.
Walmart also gives brand owners more weight than retailers. Walmart likes to work with retailers who sell their goods for the lowest price. The only way to get the Walmart Buy Box is to offer a product at the lowest price, but repricing things can help sellers alter their prices.
Amazon’s Buy Box algorithm looks at the Order Defect Rate, performance metrics, the quality of customer service, and how long a customer has been using Amazon. The Buy Box is a good example of how Amazon sellers will have to change and learn new regulations if they add the Walmart global market as a sales channel.
As more and more things can be bought online, there isn’t a clear winner among these eCommerce giants. The only clear winner may be the customer. Both online and offline, the way people shop is changing, and Amazon and Walmart are both a part of that.
Overall, Amazon is way ahead of Walmart, especially regarding third parties and marketplace sales. But Walmart could catch up if they keep improving the tools and digital marketing opportunities they offer open market sellers and if they keep adding to what they offer.
Amazon is still the clear leader in eCommerce, but a few things about Walmart.com, like Shopper overlap, make it a good investment for retailers. Consumer research shows that a lot of the same people shop at both Amazon.com and Walmart.com. Over 57% of people who shop on Amazon.com also shop on Walmart.com, and 91% of people who shop on Walmart.com also shop on Amazon.com.