Retail

Direct to Consumer: Amazon And Walmart’s eCommerce Impact

The eCommerce battle between Amazon and Walmart has been brewing for quite some time, with each of the online retail giants working tirelessly to expand its reach. The consumer shopping environment is evolving, and Amazon and Walmart seem to be leading the charge.

Following Nike’s decision to sell on Amazon, the lines have clearly been drawn in the competition sand.

In fact, many retail brands have partnered with Amazon to sell products on the marketplace’s website in the last few months. From Jessica Alba’s Honest Company and Ikea listing products on the eCommerce hub to its $13.7 billion Whole Foods acquisition, Amazon seems to be dipping its toes into nearly every major sector of the retail industry. We’ve even seen Amazon partner to make its own wines which could be sold in Whole Foods stores down the line, and rumors are circulating that the retail giant is working with a company in the U.K. to sell cars.

By partnering with and acquiring various retailers, Amazon is creating a direct path to cutting out the middleman and selling directly to consumers.

Walmart is nothing to scoff at, what with its $310 million acquisition of men’s clothing line Bonobos and its vending machines for picking up online orders. With 92 million unique visitors per month to its online marketplace, Walmart is edging closer to Amazon’s 183 million monthly visitors.

One area where Amazon and Walmart cross paths is in the try-before-you-buy arena. Amazon is moving forward with last month’s Amazon Wardrobe announcement, which allows its customers to try on three to 15 pieces of clothing before deciding to purchase. Walmart is taking a similar approach with its new offering of including samples in its monthly eCommerce packages.

The issue arising from the try-before-you-buy approach to eCommerce retail is likely going to be whether it will have a positive impact on sales — and if it’s sustainable in the long run.

Amazon and Walmart are both slowly becoming retailers trying to sell everything to everyone. With that in mind, it can be difficult to discern where the future of eCommerce is headed and what its true impact will be on the economy.

According to a report by the Institute of Local-Self Reliance, Amazon is well on its way to conquering the entire eCommerce arena. The report included the following:

“Today, half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon and Amazon captures nearly one in every two dollars that Americans spend online. Amazon sells more books, toys and, by next year, apparel and consumer electronics than any retailer online or off, and is investing heavily in its grocery business. As a retailer, its market power now rivals or exceeds that of Walmart, and it stands only to grow: Within five years, one-fifth of the U.S.’s $3.6 trillion retail market will have shifted online, and Amazon is on track to capture two-thirds of that share.”

As more eCommerce companies consolidate through partnerships and acquisitions, it’s likely over time we’ll see a handful of companies controlling the entire retail industry.

In other direct-to-consumer (D2C) news this week, Movado acquired Olivia Burton which will help to expand the company’s D2C watch business. We’ve also learned that Finish Line has enhanced its mobile loyalty app in an effort to help drive its D2C revenue and boost in-store sales.

——————————–

Latest Insights: 

With an estimated 64 million connected cars on the road by year’s end, QSRs are scrambling to win consumer drive-time dollars via in-dash ordering capabilities, while automakers like Tesla are developing new retail-centric charging stations. The PYMNTS Commerce Connected Playbook explores how the connected car is putting $230 billion worth of connected car spend into overdrive.

Click to comment

TRENDING RIGHT NOW

To Top