What’s Going On Between Amazon and Walmart?
Amazon has built a huge empire over the last decade. It started off as an online retailer of books and since then, has slowly and steadily built its business. Today, it is the online retailer that many people visit when they have to buy anything from pins to phones and everything in between. All this makes Amazon the biggest online retailer in the world.
Now, Amazon is furthering its ambitions by entering into the brick and mortar world of retail with its recent acquisition of Whole Foods for a whopping $13.7 billion. In addition, it has signed into an agreement with Nike to sell its shows directly on its website.
Amazon even plans to introduce a service called Prime Wardrobe under which customers can order and try clothes of different brands for a period of seven days before deciding whether they should buy or not. Such services are likely to change the face of retailing as it’s more customer-centric than before.
And this is the beginning of its clash with Walmart.
Walmart has been the largest retailer in the world and has dominated this market for many decades, even long before computers and the Internet came into being. With the entry of Amazon, there is a clear threat for Walmart because both these companies will compete in the same space over the coming years, at least that’s how it looks like now.
As long as Amazon was being the king in the digital space, Walmart had no problems because it was the king in the realm of physical shopping. But with Amazon entering this space, that comfort has clearly been breached.
Though Amazon has not given any kind of plan about what it’s going to do with this acquisition and how it will benefit its customers, it has definitely kick started a retail war.
Walmart, on its part, is putting pressure on Amazon to stay away. However, how Walmart is putting the pressure is what is making the whole process irksome. Instead of a direct clash, Walmart is pushing its vendors to move away from Amazon Cloud Services and opt for the services of companies like Microsoft and Google. With Walmart leading the way, other companies such as Target are also exerting pressure on their respective IT vendors to move their operations away from Amazon cloud.
Little wonder that Amazon is reacting strongly and is accusing Walmart and other large retailers of bullying.
Is it working?
Apparently not as many vendors are persuading Walmart and refuse to abide by its d\irection of changing cloud providers. But that’s not going to last forever because Walmart can simply outsource its IT operations to a company that stores data on Azure or Google Cloud Platform.
As customers, we can expect the war to get dirtier before subsiding. But eventually, we may the winners if Amazon sets up large stores like Walmart, as we can get the best value for our company through intense competition from retailers.