After writing about the 12 months post Jet.com acquisition by Walmart I have been thinking about how Walmart can win against Amazon. While researching to write the post, I kept coming back to “You cant out Amazon, Amazon” which is both telling and indicative of how I perceive how Walmart is trying to win the US ecommerce market.
Amazon has their pillars – speed and convenience
Amazon has over the last 20 years consistently been willing to cannibalize their own business to stay relevant. They have also invested into logistics like FedEx or DHL would have and invested into technology like Shopify and others have. By creating these levers they are able to commoditize them and sell the costs to third parties. Fulfillment by Amazon and Amazon Web Services have become like highways to customers with competitors building their own infrastructure.
Consumer wise, Amazon has focused on Speed and Convenience as being the drivers for consumer on boarding. Amazon Prime leverages both speed and convenience to ensure that customer spend heavily and create recurring revenue for Amazon. Customers have become accustomed to the convenience created by shopping on Amazon and searching with the Prime filter on. That may seem one dimensional but in effect that is another touch point that Amazon has created a revenue generator by charging sellers to have their items delivered by Amazon.