If you work in the world of eCommerce, then there’s no way you haven’t been paying attention to the ongoing Walmart vs Amazon feud.
The two mega-retailers have been going at it in full force, each buying up smaller companies left and right to strengthen their respective product lines and infrastructures.
Between Amazon’s purchase of Whole Foods Market and Walmart’s recent purchase of a handful of niche apparel retailers (including menswear company Bonobos), both business behemoths seem to be bulking up for an all-out buying war over the next several years—with no clear winner in sight.
So, if you’re an online seller searching for some scraps of profit to sustain yourself as these mammoth companies feast on the eCommerce landscape, what are you supposed to do?
That’s what we’re covering in this week’s post, and we hope it sheds some light on the Walmart vs Amazon battle to help you push forward in your own eCommerce journey.
Walmart vs Amazon: An overview of the new eCommerce war
The basic premise of the Walmart vs Amazon retail war is that each mega-retailer is currently mimicking the other’s main keys to success. According to The New York Times:
“Each one is trying to become more like the other — Walmart by investing heavily in its technology, Amazon by opening physical bookstores and now buying physical supermarkets.”
Amazon has already started making major price cuts at Whole Foods in order to put its signature customer-focused stamp on its newest acquisition.
On top of that, Amazon has started testing out two grocery locations in Seattle where Prime members can order online and pick up in person via drive-through windows.
Meanwhile, Walmart answered back by opening an automated kiosk at a store in Oklahoma where customers can pick up online orders in person—without interacting with anyone.
Walmart also continues to buy up small-to-medium-sized eCommerce companies in an effort to solidify their online position.
In just over a year, America’s largest brick-and-mortar retailer purchased:
• Jet.com, a competing online marketplace, for a staggering $3 billion
• Bonobos, a men’s clothing company, for $310 million
• ShoeBuy for approximately $70 million
• Moosejaw, an outdoor sporting apparel retailer, for roughly $51 million
• ModCloth, a clothing company geared toward Millennials, for between $50 million and $70 million
To potentially add to the mix, rumor has it that Walmart is also in talks with Birchbox about a potential acquisition.
Expect Walmart to continue adding to its growing portfolio of eCommerce enterprises as the Walmart vs Amazon rivalry heats up.
Walmart vs Amazon: Third-party seller barriers to entry
All of the heat from the Walmart vs Amazon battle has made it even harder for third-party online sellers to stand out on these major marketplaces.
As Amazon and Walmart begin to sell many of the same products as third-party sellers, it will become harder for smaller sellers to find listable products that aren’t routinely beat on price by the marketplace owners themselves.
Amazon is also notorious for copying products that third-party sellers find success with and then private labelling them and listing them for lower prices.
Consider that one of the biggest benefits of owning the world’s largest eCommerce marketplace is that you have sales and pricing data on every third-party seller. That means that Amazon can easily identify profitable products with high sales velocities to begin sourcing and selling themselves.
Both Walmart and Amazon are making it harder for retailers to stay profitable as they compete with each other to offer the lowest possible prices on everyday items. Not to mention the fact that Walmart and Amazon routinely pressure suppliers and manufacturers to offer their lowest prices—or else they’ll find another company that will.
What hurts third-party sellers most is Amazon’s willingness to sell unprofitable products in an effort to keep customer satisfaction as high as possible.
Bezos and co. believe that they can achieve longevity (and net profitability) by combining unprofitable products (also known as CRaP products, as in Can’t Realize a Profit, in Amazon parlance) with profitable products that they can still offer the lowest price on.
According to The New York Times, the Walmart vs Amazon battle “sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages that accrue to the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.”
Walmart vs Amazon in the clothing category
One of the most fiercely competitive categories in the Walmart vs Amazon eCommerce war is clothes.
As mentioned before, Walmart has been aggressively building its portfolio of online apparel companies, including ModCloth, Moosejaw, Bonobos, and ShoeBuy.
Walmart already is the number one seller of men’s, women’s, and children’s apparel and accessories in the U.S. at approximately $24 billion annually (as recently reported), which is far higher than Amazon’s online apparel sales of $16.3 billion when last updated.
Still, Amazon owns Zappos, which was bought in 2009 to bolster its shoe offerings. Further fueling the competitive landscape is Amazon’s several in-house clothing brands which you may not have known were part of its brand portfolio, including:
• Franklin & Freeman - Men's dress shoes
• Franklin Tailored - Men's suits and accessories
• James & Erin - Women's clothing
• Lark & Ro - Women's clothing (Also available in Canada)
• Society New York - Women's clothing
• North Eleven - Women's accessories for cold weather
• Scout + Ro - Children's clothing
It seems that the winner in the Amazon vs Walmart apparel battle will be whichever company can become more like the other one first.
The best categories on Walmart Marketplace vs Amazon
Amazon has been around for decades, which means that it’s fairly saturated in just about every category.
Walmart Marketplace is a completely different beast.
According to Matthew Ferguson at Web Retailer:
“[Walmart] marketplace is also… well, fun. Think of it as a bit like the wild west. You have some ghost town categories, where the land is ripe for investment but the trickle of settlers is slow. Then you have boom-town areas with few controls or limits, but also very little clarity about what the heck is going on.
For example, different categories have listings that vary in numerous different ways. It seems that sellers can do just about whatever they want at times. The left-hand navigation filters don’t have a clue what’s going on. No one is sure what’s getting indexed and picked up in search, and wild crazy theories about how the algorithm works abound.”
Since Walmart has a fraction of the number of sellers that Amazon has (several thousand sellers vs a couple million), smart sellers who get into Walmart Marketplace early can set up shop with relatively little competition.
Of course, Walmart demands that sellers list at the lowest price available online if they want exclusive Buy Box placement (Walmart’s Buy Box algorithm is very different from Amazon’s).
That’s why it’s so vital for Walmart Marketplace sellers to invest in pricing intelligence tools like automated repricing software. The right automated repricer will let you set up your listings to have the lowest price every time, helping you win the Walmart Buy Box more often.
With competition likely to start rising exponentially on Walmart Marketplace, a solid repricer can make the ultimate difference between constant sales and lackluster performance.
Walmart vs Amazon: the bottom line for eCommerce sellers
For eCommerce sellers, the arrival of Walmart Marketplace provides a much-needed answer to Amazon and brings a new wave of opportunity. That’s because you now have another venue on which to list your products and find a huge (and growing) audience of prospective buyers.
If you can learn the nuances of Walmart vs Amazon and figure out the best strategies to use within each marketplace (and, in some instances, to use on both), you’ll be able to expand your offerings to a brand new platform that has the potential to be around for the long haul.
While Walmart presents a new learning curve to sellers, such as having to offer the lowest price on a listing to win the Walmart Buy Box, there are tools like repricers that can easily take care of that for you automatically so you hardly have to think about it.
Sellers must also understand the subtle differences between each category on Walmart, since some are more saturated than others.
For highly rated sellers with a pioneering spirit, gaining admittance to sell on Walmart Marketplace seems like a natural progression from selling on Amazon.
Jumping in now—before Walmart gets flooded with competition like Amazon—to learn the lay of the land is highly recommended so you can build a solid foundation that’ll withstand the eventual storm of new sellers that will inevitably hit Walmart Marketplace.
Even more importantly, take the time to learn how software can play a key role in driving sales on Walmart and Amazon so you can eliminate tedious, time-consuming tasks from your to-do list—and get your business on autopilot when it comes to generating serious cash.
Every seller wants to win the Buy Box more on Walmart and Amazon.
But only the smartest sellers do it consistently.
That’s because they don’t waste their time manually repricing or using weak, complex software to do the job.
Instead, they rely on strategic price automation from Informed.co.
Informed.co’s automated repricer powers listings into the Buy Box using our proprietary algorithm. You can even create custom rules-based strategies.
Informed.co is simple to use, its interface is beautifully designed, and our support team is best-in-class when it comes to getting users familiar with our app.
But there’s no reason to keep writing about Informed.co when you can experience the power of our automated repricing for yourself today—free.
Just click the image below to visit our site and get started with a free 14-day trial of Informed.co, and start winning the Buy Box way more with a lot less effort.