How Target and Walmart are bridging the e-commerce divide with Amazon

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When the world came to a screeching halt in March 2020, it seemed plausible that the pandemic would pave the way for Amazon to wipe all of its e-commerce suitors off the map. With chains of bricks and mortar left with empty parking lots, who could match Amazon’s logistics, pricing and data collection giant? So far none have.

But now that consumers are returning, Target and Walmart are finding ground by taking advantage of the one thing Amazon lacks: a physical network.

For Target, it seems shoppers always love the personal touch – its click-and-collect business is booming at its nearly 1,900 US stores. Walmart has the advantage that its fulfillment / distribution infrastructure is much larger than Amazon’s (over 150 centers versus 110, according to JungleScout), and it has 4,700 outlets where click-through orders can be placed. collected.

The two companies had tried to develop a credible e-commerce platform before the pandemic hit, but the global shutdown made those efforts urgent.

Neither poses an imminent threat to Amazon, which still dominates e-commerce with a market share of around 40% compared to 7% for Walmart and 2.2% for Target. What’s remarkable is that their e-commerce business is growing faster than that of Amazon or any of the 10 largest retail e-commerce companies in the United States, according to the online news site. eMarketer.com. Amazon’s e-commerce business has grown by around 15% per year. Walmart’s grew 21% and Target increased online sales by 23%.

The marriage of e-commerce with brick and mortar may have seemed counterintuitive at the start of the pandemic, but now he explains why Amazon is investing heavily in its own network of stores. As previously reported, the company is rolling out a heavyweight of store concepts in food and general merchandise – around 3,600 locations are planned, according to the International Council of Shopping Centers. It would be a great click-and-collect network.

Until then, Amazon is trying to catch up.

It just launched a click-and-collect option for small and medium-sized businesses that sell on Amazon’s platform. Buyers can purchase selected items from the Amazon site and pick them up the same day at a local store, or sellers can offer same day delivery using their own drivers and equipment.

Rather than trying to reinvent the last mile challenge in e-commerce, Target fulfills almost all of its online orders in stores. Target’s pickup counter is outside the main entrance, is well staffed, and according to a recent visit, customer service is impeccable. Target’s efficient in-store fulfillment means shoppers don’t stand in line and are more likely to walk around the store before they leave.

Walmart’s strategy has included a successful membership program, Walmart +.

According to a recent JungleScout report, 35% of US consumers are Walmart + members (compared to 59% who are Amazon Prime subscribers).

Finally, Target and Walmart seem to have solved the pricing problem. Most consumers check prices on Amazon before buying elsewhere. In a growing number of categories, the prices of merchandise from third-party sellers are consistent across the three, unlike when I pointed out big differences a few years ago.

So how do Walmart, Target, and others continue to close the Amazon gap?

Simply put, be closer to the customer in every way possible by listening, understanding and better responding to their needs, wants and wants. I think Doug McMillon serves his team and customers well, as I’ve seen him in stores work to understand by listening better rather than firing rockets into the air.


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