Walmart Vs. Amazon: E-Stores Battle It Out

There’s no question that Walmart’s e-store and Amazon are going toe-to-toe in the battle of the best retail giant.

As the retail space continues to reinvent itself, the rivalry between the two retailers seems to only gain traction.

The gloves came out last year when Amazon officially booted Walmart out of its long-running top spot of being the world’s biggest retailer. From then on, it seems both companies have continued to push the retail envelope — forging new partnerships, expanding around the globe and ensuring customers can access their products across channels.

While there’s no way to tell who will actually win the battle, it’s safe to say both e-store giants are putting up a good fight.

Just months ago, Walmart made a big move to go after a new market and rebrand with the acquisition of Jet, a company with no profits to date but one that’s showing rapid growth selling household goods and groceries online. The firm has reportedly gained 350,000 users a month since its launch in 2015.

Jet has achieved over $1 billion in sales from more than 4 million shoppers, and Jet’s sales in July grew 168 percent since August 2015, whereas Walmart’s online sales grew by only 30 percent.

“In a growing market, Walmart.com lost ground — sales dropped 0.7 percent from the quarter before. It takes a bit of work to lose ground in a market that’s on fire, and that’s not something that Walmart’s CEO was particularly happy to explain away,” PYMNTS CEO Karen Webster commented earlier this year in a piece about the reinvention of retail.

“Jet.com is being positioned now as Walmart’s saving grace as it tries to recapture its eCommerce mojo,” she said. “And although the need to rev up that mojo is essential, it may be that the Jet.com acquisition is about more than merely giving Walmart.com a new lease on life.”

Many believe Walmart’s acquisition of Jet.com for $3.3 billion is just a ploy to beat out Amazon based on price. But according to CEO Mark Cohen of Sears Canada, it is a “waste of money” and “a terrible mistake.”

Amazon’s profitability is not based on its price points but on the company’s seamless methodology and service in delivering consumer goods, Cohen said. Walmart’s online sales were $13.7 billion in fiscal year 2015, while Amazon’s sales in 2015 were $107 billion.

Michael Lasser of UBS speculated that Walmart’s purchase of Jet may have just been a maneuver to bring Marc Lore onboard to run the firm’s eCommerce and that this could herald poaching by Walmart of other top performers from Amazon and eBay. New talent from among the best and the brightest would certainly help Walmart, and it is no secret that Jet shoppers tend to be wealthier, younger and more urban.