Does Walmart really have a shot against the Amazon juggernaut?

| by Chris Petersen
Does Walmart really have a shot against the Amazon juggernaut?


It is hard to open any news source and not see Amazon in the headlines. From a cashless Amazon Go store, to purchasing Whole Foods for $13.7 billion. Alexa in your Amazon Fire TV, to $20 Echo dots for Prime reordering.

The Amazon innovation juggernaut seems to be everywhere and rolling over everyone! But, not so fast. Does anyone remember the Amazon phone and the $170 million write off? Or, how about Amazon WebPay which failed to compete with PayPal and other services? Amazon CEO Jeff Bezos is famous for innovating by testing new ideas, and be willing to fail. Is Walmart finally capturing a similar ability to innovate, with a willingness to fail? Can Bentonville reach outside of its comfort zone before it's too late?

Companies that don't embrace failure as a part of innovation, risk becoming irrelevant with fewer options to survive.

Bezos culture of failing fast is kicking butt around the world

Bezos' recent interview with Business Insider pretty much sums up his philosophy and why Amazon has been one of the most successful innovators in the last decade.

"I've made billions of dollars of failures at…None of those things are fun. But they also don't matter.

"What really matters is, companies that don't continue to experiment, companies that don't embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence."

Gee, is a Hail Mary what Sears just did in agreeing to sell Kenmore appliances on Amazon? In many ways Sears could have been Amazon. It was the largest retailer in the world. It had the largest customer base, credit card base and mail order business. What Sears did not do was innovate and continue testing ideas that would appeal to changing customer behaviors.

In many ways, Walmart was also stuck in the past after the death of founder Sam Walton. Yet it is  still generating multiples of Amazon's revenue and have more than 11,000 stores. But having a large chain does not make, or keep you king. Will Walmart be able to adopt a "culture of failure" in order to rapidly test what now works in an omnichannel marketplace?

Signs Walmart is on the right track testing a wider range of options

On the surface, Walmart's spending $3 billion for might seem like a mistake. Maybe in terms of pure online sales revenue it was. But, in the deal they got Marc Lore and a management team that has been changing the Walmart culture from the inside out.

However, the real strategic business question for Walmart (and almost all other retailers) is NOT how to compete with Amazon online. Walmart needs to solve for customer experience across time, place and channels. It needs to leverage its core asset of people and stores as part of a holistic solution to engage shoppers, and sustain lasting relationships beyond mere price.

There are some emerging signs that Walmart is willing to rapidly test, test more far ranging ideas and accept some failures as part of the innovation process.

Testing multiple ways to make it easy for consumer to shop and collect

Large in-store kiosks - It's very hard to miss the 16-foot tall kiosks in the center of the Walmart test stores. These big structures have been called "ugly," but they are also highly efficient in delivering click and collect items to customers. They can give customers access to much larger items the size of microwave ovens that won't fit in Amazon lockers.

Huge parking lot grocery kiosks - But for a real sign of Walmart's new entrepreneurial spirit, checkout their test of a huge 80-by-20- foot refrigerated kiosk in their parking lot for grocery pickup. When customers arrive and type in their code, they can receive their grocery pickup within a minute.

Curbside grocery pickup - Walmart announced it is adding 26 stores to the 800 with online order and curbside grocery pickup. The last thing customers want is to stand in line, especially for grocery pickup. My question is why only 800 stores when Walmart has over 4,100 stores in the U.S.? Is Walmart innovating fast enough? Amazon has been very cautious too in evaluating its tests like Amazon Go.

All of these strategies leverage Walmart's core strength of stores and leveraging click and collect. More options are good if the customer experience across those options is also "good" (item in stock, fast service and quick check out). Much better to be fail early and learn what works than to wait for Amazon to rollout Go stores and leverage Whole Foods locations.

A real Walmart stretch — home delivery by employees

If you don't believe Walmart is serious about competing with Amazon through innovation, take a look at their test of using employees for home delivery of products on their way home from work. It is a potential cost effective solution for the last mile of delivery and enables employees to earn extra cash on their commute. Might sound far-fetched, but who knows, it might be a solution in some markets for delivery in peak hours and seasons. Future success will come from testing a mosaic of solutions that can be customized by market.

Another sign that Walmart is testing more than stores and shelves

The key for bricks and mortar retailers is not just getting customers through the doors, but understanding their shopping and purchase behavior once they are in the store. According to a recent RCE article Walmart may be investing in facial recognition technology in order to detect shopper moods. "It is easier to retain existing customers than acquire new ones through advertising," stated the patent filing. Who knows if will work, but the focus on retaining existing customers is most definitely spot on.

Loyalty – shopper rebates on Walmart savings to spend as they will

Speaking of customer loyalty and retention, sometimes it is the little things that make all the difference. While the big kiosks and employee home delivery have grabbed the headlines, most have missed the Walmart "Savings Catcher" on the Walmart app.

It enables the shopper to scan receipts and the app checks competitive prices in the local area. If there is a better deal elsewhere the app credits the customer's account with savings. Fast, easy and no more tracking down an associate to get price matching! What Mom doesn't want to have competitive price savings tracked automatically resulting "mad money" at the end of the month to spend on items of their choosing. This is one of the "little things" that can make a big difference in a holistic solution for loyalty through a better customer experience.

With Walmart's size, revenue, number of stores and logistic prowess you would think that they are the one retailer capable of being a viable Amazon alternative. If not Walmart, then who?

Walmart is definitely showing signs of "getting it" and adapting to omnichannel consumers' rising expectations. The long term question is always about execution which creates a consistent, positive customer experience.

Even if you are on the right track, you will still get run over if you are not moving fast enough. This applies not only to Walmart, but every retailer trying to survive today.

Topics: Consumer Behavior, Customer Experience, eCommerce, In-Store Media, Kiosks, Loyalty Programs, Marketing, Merchandising, Online Retailing, Technology, Top 100 Retail

Companies: Amazon, Walmart

Chris Petersen
Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace. wwwView Chris Petersen's profile on LinkedIn

Sponsored Links:

Related Content

Latest Content

Get the latest news & insights





Franchise leaders share secrets of success and where customer experience plays in