Amazon and Walmart have been competing massively for the retail space over the last few years. Both companies have been leading the way in retail technology. Walmart has announced a number of partnerships with big tech firms including Microsoft Azure to better compete with Amazon, and has started to rethink its status and identity in the market. The company has always considered itself a big box retailer with thousands of stores across the world. But the company is now looking to make a mark in the online retail space but it will need to really get ahead of the tech that Amazon has.
Walmart purchased Jet.com in an effort to expand its online business back in 2016. The company has accelerated its big shift from traditional brick and mortar stores to online e-commerce. The retail giant has also struck partnerships with Waymo to help provide rides from its stores to different customer locations. And that’s not all. Walmart has partnerships with Japanese retail giant Rakuten for the Kobo e-readers. The traditional brick and mortar retailer has also managed to strike deals with Uber and Lyft as well as Postmates to help with grocery delivery.
But the Microsoft deal is one of the most influential of them all. First, Walmart moved its entire cloud operations to Microsoft Azure. The company is also expected to leverage Microsoft’s AI technology in developing cashier-less stores across the country. Amazon has already started piloting cashier-less stores too. It’s clear that Amazon is also interested in the brick and mortar retail space but not in its traditional form. The company sees retail locations as important fulfillment centers and has also managed to acquire Whole Foods in a multibillion-dollar deal.
Walmart is also expected to convert its Vudu subsidiary into a streaming service that will compete with Amazon Prime streaming services. The Walmart service is expected to be up and running by the end of the year. Despite the competition from Amazon, Walmart has really been on a roll financially. Company’s annual sales have hit $500 billion this year. However, Walmart’s margins are very low and this has largely been occasioned by high operational costs.
The company has over two million employees worldwide 1.4 million of which are in the US alone. But despite this huge operational infrastructure, Walmart’s value is just a quarter of Amazon. Amazon is currently valued at over $900 billion and is one of the two companies alongside Google that are expected to join Apple at the $1 trillion mark in valuation.
Amazon has also been growing relatively faster compared to Walmart and has diversified into other important industries beyond retail. The e-commerce giant has also invested heavily in its technology, making margins very high. Walmart will need to emulate Amazon in all these fronts and this explains why the company is pursuing partnerships with tech companies. Both companies are expected to dominate the retail space no doubt and they have recorded reasonable growth rates too. But their competition has just started.