Walmart has always concentrated to reduce its costs of purchasing and offer the best prices possible in the market. Walmart procures goods directly from manufacturer, bypassing all other intermediaries , it has built a core competency for itself by being a leader in the distribution and retail division, which in turn has led them create a competitive advantage for itself. Walmart finalizes a purchase deal only when it is sure that the price at which they are procuring in the minimum possible. Walmart spends a significant amount of time with vendors and understanding their cost structure.
Walmart believes in establishing long-term relationship with the vendors.when compared to Wal-mart Amazon has different warehouses for different kinds of products and customer preferences of delivery options. Prime customers delivery, one-day delivery, first class delivery and free super saver delivery are some of the common delivery options available to Amazon customers. Amazon’s continuous efforts to make product delivery in the fastest possible time make it a logistics giant and not just the leader in the retail industry.
The global population are changing and the shopping habits of the millennial generation are much different compared to past. This generation of consumers likes to shop online and is a high tech savvy generation. And also the competitive pressure from the online brands like Amazon has also kept increasing which has led to Walmart focusing more on technological innovation and lower prices.
Wal-Mart’s Retail industry is marked by intense competition and there are several retail and wholesale brands. Competition is one of the biggest challenges in the retail industry and a primary threat to growth. To overcome this pressure, Walmart will need expand to more markets and increase its online presence. Brick-and-mortar retailer are caught on the wrong side of the digital shift in retail, with them stuck in a dangerous cycle of falling foot traffic, declining comparable-store sales, and increasing store closures. “E-Commerce pure plays are riding the rise of digital commerce to success — none more so than Amazon, which accounted for 53% of online sales growth in the US last year, according to Slice Intelligence.
Walmart’s E-Commerce sales till 2016 where decreasing considerably as per reports. However, in the year 2016 Walmart managed to get a steep rise”.The idea of competing online with Amazon by offering low prices its brick-and-mortar stores are known for helps to close the gap in a number of product categories. Walmart is using its unmatched brick-and-mortar network to offer lower prices online.
The retailer has been offering pickup discounts to save on last-mile delivery costs, and has been handing those savings to consumers in the form of a discount. The retail giant made its name as a low-price physical retailer, but when it moved to the e-commerce space, it found that Amazon was able to regularly beat its prices. It has since invested in its own e-commerce efforts, and has made a number of acquisitions in order to compete.
Those investments appear to be paying off, as it can now go toe-to-toe with Amazon on price, giving it a competitive edge in certain categories.Walmart’s main revenue driver is its brick-and-mortar retail business, which continues to gain steam amid a collapsing retail space.