The cover story of the new issue of Bloomberg Businessweek, titled “Can Walmart’s Expensive New E-Commerce Operation Compete With Amazon?,” is a very detailed look at Walmart.com written by Brad Stone, the author of the excellent history of Amazon, “The Everything Store” and Matthew Boyle.
Clearly the journalists who co-wrote it had a great deal of access to the management of both Walmart and Walmart.com, and I can’t help but wonder if they got a touch sucked in. Maybe the following passage is facetious, but if it isn’t, it’s rather fawning:
“[Walmart CEO Doug] McMillon has gradually come to shed the customary Walmart suit and tie in favor of casual sport coats and open-collar shirts, and plays up the notion that he’s a ‘bit of a gadget guy.’ He once bought a Kindle for his mother, and regularly invites tech luminaries such as Facebook Inc.’s Sheryl Sandberg to senior staff meetings.”
I suspect the folks at Amazon do not think that once buying a Kindle for one’s mother is the definition of a “gadget guy.”
The article, which you can read here, is decidedly informative, as well as rather juicy, and it does point out some of the challenges that Walmart.com faces, but it also underplays three of Amazon’s not secret advantages. The first is the company’s unparalleled trove of data, and the many well-trained employees who know how to analyze it and what to do with it. The second is the enormous power of Prime.
Amazon famously does not disclose the number of Prime members (as well as many other metrics of interest), but the article cites a report that estimates one half of U.S. households are Prime members. It does not, however, dig into the power of Prime.
Amazon has shared that Prime members spend much more than other Amazon shoppers, which makes total sense. Just as one wants to amortize the cost of a Costco card, even though most shoppers probably do so on the first few trips, so too with Prime. If you have it, you use it in order to get a return on your investment. It’s not just about the free shipping, although that’s clearly a very attractive benefit. Finally, not even mentioning Alexa seems absurd, given that Alexa/Echo provide Amazon with an important means for both spurring purchases and collecting data, and Walmart does not have anything comparable.
The latest issue of the Economist has several articles about the importance of data that are essential reading for anyone who cares about the future of Walmart, the future of retailing, and the future in general. Here, one about the new economy and one about regulation.
Faye Landes, co-founder and general partner of Back to the Future Ventures, advises emerging consumer and retail companies on strategy, branding and fundraising. She was one of Wall Street’s leading consumer and retail analysts for over 20 years and was widely recognized for her ability to anticipate sweeping trends, such as the widespread adoption of activewear. She has frequently appeared on CNBC, Bloomberg TV and other media outlets and has presented at industry conferences all over the world. Read her “Analyst’s Take” column here weekly.
This isn’t your parent’s polyester - the scratchy fabric of yesteryear with a low-level environmental standing has evolved into a higher-functioning fiber often derived from recycled material.Read more
Inflation increased in April compared to a year ago, buoyed by increases in energy, food, shelter, transportation services and healthcare. Apparel prices rose negligibly.Read more
Retail sales surged in April, recovering from a dip in May and defying both Brexit uncertainty and inflation, but a report shows the divorce with the EU is weighing on consumers' minds.Read more
As the saying goes, necessity is the mother of invention. And these days retailers really need to find new lifelines. The result is international expansion, an off-price acquisition and a play for corporate customers.Read more
The European Commission, the legislative body of the European Union, has granted GSP Plus status to Sri Lanka, giving the country access to the EU market under the special scheme starting Friday.Read more
Ralph Lauren hired former P&G executive Patrice Louvet as its new CEO and president, while Burberry announces a new CEO as Christopher Bailey gives up the role to focus on the label's design.Read more