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E-commerce have been one of the prominent growth in the business sector. It have been growing its wings exponentially from the rise in sales to the rise in the revenue too. The process of e-commerce in a nutshell could be described as the process of buying products and selling them by all means of electronic equipment and supports like internet and other mobile applications that are made for supporting e-commerce process. The process of e-commerce have been increasing the sales of the products as the rise of technological development have been making a huge impact on the rise of ecommerce as well. In the business of e-commerce, many supermarket are also entering for competing with the new era of retail. Out of these supermarket hubs, Walmart is one of the prominent name, which have been enacting the concept of e-commerce in their organization as well (Laudon & Traver, 2016). However, compared with another e-commerce hub, Amazon, it have been making a huge change in the prospect of their retail as well through e-commerce.
The following case study would be discussing, comparing and contrasting the needs of e-commerce in retail tycoons like Amazon and Walmart. In the case study, there would also be discussing of various aspects like the strategies used by these organization for supporting and upgrading the process of e-commerce, in-sourcing of materials, leverage and assets of the retail tycoons as well.
In respect to the digitalization of the market and coordinating with the modern market, the modern consumers are also increasing the values are being able to shop online rather than on brick and motor retails (Kim & Peterson, 2017). The major asset that Wal-Mart have acquired recently which would initially help them in competing with Amazon and other retailer is the acquisition of Jet.com. Other than that, Wal-Mart are now currently testing some of the self-driven cars in the state of Arizona. These cars are specially designed for the picking up the customers for grocery shopping. These cars are automated for picking up customers from their pickup points and dropping them to their destination for completing the detour. The organization is also undertaking experiments in their research and development facility for the implication of robots for pricking groceries and processing the pickup orders in their stores at New Hampshire (Rutherford et al., 2016). And lastly the expansion of the stores retail by signing contract with more than 1,100 brands have become a prominent action plan or asset of Wal-Mart for competing with Amazon or other retail stores. This have helped Wal-Mart in getting a grip on the market analysis and also help them in taking some action steps in order to make significant approaches for competing with Amazon (Goolsbee & Klenow, 2018).
Amazon is the biggest e-commerce retail organization, which is currently being operated around the globe by millions of customers. As being the leading e-commerce organization, Amazon also have some competition in being in the market of retail business (Akter & Wamba, 2016). Walmart is one of the biggest competition in the market currently that is operating against Amazon prominently. Amazon is considering in opening their own retail stores, for competing directly with Walmart on the field. With the name of Amazon Go, the organization have been planning for opening these retail stores for providing competition to the Walmart retail stores. Another asset that have been inherit by Amazon is the application of marketing strategies of the organization for boosting their sales. In this aspect, Amazon would be having a greater approach over the e-commerce market in aspect of the selling their products to the potential customers as well (Rahayu & Day, 2015).
Walmart have been keeping a keen understanding of the market of e-commerce and trying to make enter market as well. The warehouse chain of Walmart, also known as the Sam’s club is the warehouse unit of the organization (Sambhanthan & Good, 2016). It have been witnessed that the organization’s warehouse unit is likely to have a major boost in aspects of sales of their food production and all the everyday essential commodities through the development of a joint-partnership with the organization Instacart. With the help of this strategy, the customers of Sam’s club would be eligible for getting their orders delivered at their doorstep in a particular timeframe as well. Along with the same day delivery service of Instacart, the shopping of Sam’s club would eventually be expected to be enticing for the customers only (Laudon & Traver, 2016). Walmart is also providing a much simple shopping experience for their potential customers by implementing more shopping methods and seamless deliveries for the ordered products as well. In fact, apart from just strengthening the sales of grocery only, Walmart are also increasing the sales of their furniture and products of home décor as well. The company is likely to launch some new online platform which would eventually expand the e-commerce space of for the organization through buyouts and the implementation of strategic alliances. The organization have been enhancing their e-commerce strategies by making deal with the Japanese prominent e-commerce firm Rakuten. In accordance of this deal, the organization would be eligible for selling online products of grocery in Japan along with e-books and audio books in the United States of America (Johansson & Kask, 2017). The organization have also being making some prominent changes in their apex level management for enhancing and implementing the skills application of e-commerce in Walmart. The constant expansion efforts have made a lot of investors for invest their stocks on Walmart for boosting their business approach of e-commerce.
Amazon have been biggest e-commerce business around the globe. They have been creating a major change in the business of e-commerce with their extensive development of strategies for enhancing their operational activities. One of the major strategy that Amazon have developed is the implementation of the Amazon effect (Goulet, 2019). This effect refers to the shifting of expectation of the e-commerce customers because of the services that the Amazon have provided to their potential customers. The service provided by amazon are considered to be frictionless, which initially makes the expectation of the people more over the organization. Therefore, the effect of Amazon have been used as a crucial strategy for enhancing their e-commerce business (More, 2016). With their one click shopping facility, the feature have always helped them in being the number one enterprise in e-commerce industry until 2017 as the expiring of the patent. This feature have helped the organization in having additional hoops in the organization’s operating system. Along with the automated marketing strategy, Amazon have been encompassing the suggestion of their customers previewed products and according to their latest buying factor as well. As customers preview along the preferred products of their choices, Amazon generates a series of suggestion for their customers in pop up versions, which helps them in sorting the correct product in less time. These strategies have helped Amazon in developing a prominent market (Yuan et al., 2016).
Amazon have a huge marketplace where each day billions of people daily access and purchases their products. The platform set by Amazon for retailing also incomes money for visits also. It is estimated that only in the United States of America, there have been more than 2.7 billion visits. Therefore, on an average, each individual spend more than 6 minutes in the site just surfing only (Head, 2017). This popularity helps them achieve optimum views for the site which in fact also makes them earn revenue. The organization earns from the supplier as well. The organization offers programs for the potential sellers which helps them grow their business by selling their products and brands on the website, which helps them in fulfilling the customers’ order as well as their needs. The organization charges interest on them as well. On the other hand, Walmart generates revenue on the basis of physical and digital access. This helps Walmart in making money with both of their physical presence of retail stores in existence and also digital access to broad merchandize of customers through e-commerce and mobile commerce as well. The organization also generates revenue from Sam’s club, which is a warehouse club of the organization being operated under the website of samclub.com (Sisodia, 2016).
Walmart have always wanted to buy the commodities online in much cheaper way. However, this aspect does not goes well with some of the high end brands which have a marketing managers have been concerned about the premium image of the brand. Therefore, this creates a channel conflict among the suppliers and the seller of the product, where one of the channel member interferes with another channel member while fulfilling the desired goal. Therefore, Walmart does not intervene with the conflict as it have been developing a proper channel of better in the retail stores than that of e-commerce as the same product the customers could afford from the retail store as well (Rangel, 2018). Hence Walmart is not worried about the channel conflict between the online sales and the store sales.
Walmart have been taking the approach of in-sourcing rather than outsourcing from low-cost countries and other domestic firms as well. This method have been adopted by Walmart for three primary factor; risk from hackers, accessing the primordial customer base and controlling the quality of the products. There have been many cases like with other supermarket retail tycoon like Woolworths, where the entire system of the organization was crashed, which initially made the organization loss millions of dollar and for just one hour only (Rangel, 2018). Therefore, taking control of the product would help the organization save them from outsource hackers. Walmart have taken the control of their product for accessing the ground control of the base of the customer. Without the involvement of any third party in the flow of management and products, there would be no chance of outflow of the products as well as it would help Walmart in knowing the exact need of the customers as well. The third factor is the quality control, which is one of the most vital factor. Quality is the factor which helps in acquiring the loyalty of brand as well as the customers. With the product in-souring in control of Walmart itself, it would help them in regulating the optimum control over the quality of the product.
While Walmart having a strategic e-commerce business model with would help them in achieving the likely long term goal, the acquisition of Jet.com had been a smart move made by the apex level management of Walmart. Therefore, the acquisition of Jet.com have made a prominent requirement for the organization as it have helped them in achieving more customers. The top priority of Walmart currently is to leverage Jet.com for reaching new customers. Amazon have made some strategic acquisition which have helped them in creating a proper relationship in between the internet retail arena (Goulet, 2019). This factor have helped them in making a prominent market for sustaining the sales of their retail products. The organization have also developed a schematic sketch of the market where there have been proper analysis of the market with applying the basic concept of e-commerce.
The operational fulfillment of Walmart different from Amazon in many separate ways. Mostly in e-commerce, the involvement of third party is not acceptable or not used properly. With the application of strategic marketing traits. Walmart have a proper segmentation of operational fulfilment, which Amazon lags.
Hence, the case study could be concluded by providing brief overview of the e-commerce commodities that are maintained and used by retail marketing tycoons like Amazon and Walmart. The case study have discussed about the key assets of Walmart that could be leveraged for competing with Amazon. The case study have also discussed about the assets that Amazon have and could be used as leverage to compete with Walmart. The case study have also provided a thorough narration about the e-commerce strategies of both Amazon and Walmart, along with the revenue model of both the companies as well. The assignment have also discussed about the channel conflict between the online and retail stores of Walmart.
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