Walmart and Amazon Enter the Same Battlefield
Walmart and Amazon both share the same common goal: be a consumer's primary destination for in-store and online shopping. From clothing and food to toys and tech, both are developing their companies into hybrids of online and brick-and-mortar shopping centers.
To increase its online advertising footprint, Walmart utilizes its brick-and-mortar shopping data to fuel targeted third-party ads the way Amazon does with its consumer shopping data.
Amazon Wants to Be Your Shopping Assistant
Amazon has made itself into a formidable threat to take some of the ad spend out of the duopoly Facebook and Google currently hold. While Amazon ads only account for about two percent of the total market, it’s still in the early stages of its future advertising plans. By comparison, Google and Facebook control over 60 percent of the market.
Amazon is a threat because it has amassed a large amount of information about consumer purchase behavior. Google and Facebook both have shopping marketplaces but still see users leave to make purchases on Amazon.
“While Google knows what people are searching for and Facebook knows what people are interested in and who they are connected to, Amazon knows the specific products that customers are purchasing and how frequently they are purchasing these products,” said Daniel Salmon Equity Research Analyst at BMO Capital Markets.
Walmart's Strength is Amazon's Weakness and Vice Versa
Walmart and Amazon have strengths the other doesn’t, and each company is investing significantly in their respective weaknesses. Amazon touts far and away the largest eCommerce marketplace while Walmart is still the largest brick-and-mortar retailer.
To expand its eCommerce presence, Walmart is building more robust online advertising capabilities. They now serve programmatic display ads with sponsored products listings in order to drive online sales.
To expand into brick-and-mortar retail, Amazon bought Whole Foods Market. It is also developing its Amazon Go concept, which is a grocery store that allows customers to make purchases without going through a checkout line. The first Amazon Go store prototype opened in the company’s headquarters in Seattle last December.
Both Walmart and Amazon bring unique weapons to this face-off over the consumer's shopping experience. Both titans are formidable but which one will invade the other's turf more effectively? Time will tell and the battle will be fascinating to watch.