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James B. Stewart writes in the NYT that for the past 16 years Walmart has often acted as though it hoped Amazon would just go away. When Walmart announced last week that it was significantly increasing its investment in e-commerce, it tacitly acknowledged that it had fallen far behind Amazon in the race for online customers. Now, the magnitude of the task it faces has grown exponentially as e-commerce growth continues to surge globally. "Walmart.com has been severely mismanaged," says Burt P. Flickinger III. "Walmart would go a few years and invest strategically and significantly in e-commerce, then other years it wouldn't. Meanwhile, Amazon is making moves in e-commerce that's put Walmart so far behind that it might not be able to catch up for 10 more years, if ever."
In 1999, Amazon was a fledgling company with annual revenue of $1.6 billion; Walmart's was about $138 billion. By last year, Amazon's revenue was about 54 times what it was in 1999, nearly $89 billion, almost all of it from online sales. Walmart's was about three times what it was 15 years before, almost $486 billion, and only a small fraction of that — 2.5 percent, or $12.2 billion — came from Walmart.com. Walmart's superefficient distribution system — a function of its enormous volume and geographic reach — was long the secret to Walmart's immense profitability. Ravi Jariwala, a Walmart spokesman, says that Walmart is building vast new fulfillment centers and is rapidly enhancing its delivery capabilities to take advantage of its extensive store network to provide convenient in-store pickup and adds that 70 percent of the American population lives within five miles of a Walmart store. "This is where e-commerce is headed," says Jariwala, which is to a hybrid online/in-store model. "Customers want the accessibility and immediacy of a physical store," along with the benefits of online shopping.
(Score: 2, Informative) by Anonymous Coward on Sunday October 25 2015, @04:18AM
That's facile. Amazon has been spending their profits on infrastructure. Walmart hasn't. A business that invests in its own future the a business that has a future.
(Score: 2) by VLM on Sunday October 25 2015, @11:50AM
Both pretty much have to financially position themselves as wall street demands or the stock price will tank, and the street doesn't want profits from amazon at this time. Which could change.
(Score: 2) by RedGreen on Sunday October 25 2015, @01:58PM
Yeah right, Walmart just this last year spent tons of cash upgrading the local store here to sell all kinds of additional products. Fact remains Amazon as far as I know has never made a profit Walmart on the other hand rakes it in hand over fist year after year even with spending mega bucks opening new stores/re-doing the older ones. The pie in the sky oh it is on the web so it does not have to make a profit routine is getting old and eventually the bubble is going to pop on that survivor of the past bubbles and it will go tits up.
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