Broad Street Licensing Group Food News

Walmart v. Amazon.com (part 2)

Experts believe Walmart’s size, resources and network of 3,800 stores and 150 distribution centers make it well-equipped for the struggle ahead in e-commerce we profiled yestrerday.

But reports show the company has stumbled in several areas.

It had to back down from a plan to “rationalize” SKUs to make stores leaner (and more like Target) to appeal to upscale shoppers. While a return to its core consumers[1] and adding 10,000 dropped items helped overall sales, upscale traffic tailed off.

The company has also foundered integrating its Bentonville operations with Walmart.com (headquartered in Brisbane, CA). Executive turnover there has hurt growth, too. Nevertheless, the company has moved ahead with “Home Free,” a free shipping service (ala Amazon) on orders over $45).[2]

It is also experimenting with next day delivery from its DCs (distribution centers), or through the US Postal Service. Walmart is even trying out home grocery delivery in the San Jose, CA market. It already offers free in-store pickup for items ordered online, noting such transactions typically generate an additional $60 in sales over on-premise shopping. Still, observers say the company has lost its early lead in adapting to new technology, and is lagging behind its online rival in spending on software and computers.

Disclaimer: the information provided in this post derives entirely from news sources & other public information. It is in no way meant to imply any proprietary information about Walmart or Amazon.com, nor does it derive from any contact with these retailers by Broad Street Licensing Group or any of its employees.


[1] Households making $30,000-$60,000 annually.

[2] After an $79 annual membership fee similar to Amazon’s “Prime.”

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