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The current rivalry between retail giants Walmart and Amazon is intensifying as companies strive to innovate faster – but one of them still has an advantage in the field of competition, focused on the consumer, said experts.
According to a new note from researchers at Moody's Investors Service, Amazon is behind Walmart in several areas.
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Researchers estimate that Amazon has generated up to $ 20 billion in grocery revenue in the last year. Amazon owns Whole Foods and also offers Amazon Prime Now and AmazonFresh delivery.
However, Walmart – which also owns Sam's Club – generated about $ 270 billion. It is the largest grocer in the world. While it was already offering same-day pickup in thousands of stores, Walmart announced last week that it would begin testing home delivery.
The researchers noted that Amazon's "very limited physical footprint" likely means that it will continue to drag Walmart into this space. He also noted that promotions, such as price cuts at Whole Foods, have not yet stopped.
| Teleprinter | security | Latest | Change | % Chg |
|---|---|---|---|---|
| WMT | WALMART INC. | 107.52 | +1.46 | + 1.38% |
| AMZN | AMAZON.COM INC. | 1,860.63 | 56.60 | + 3.14% |
Amazon has a big lead over Walmart in third-party sales, charging fees to help facilitate these deals, but Moody's believes Walmart will be able to reduce this gap. Its massive distribution network is an advantage, as is the fact that, unlike Amazon, Walmart does not offer a range of products of its own brand in competition with the suppliers it works with.
The fact that Amazon collects data from its third party vendors and also sells its own products alongside theirs, makes it a prime target for Capitol Hill's antitrust considerations.
Moody's also noted that retail sales in the United States remain strongly in favor of brick and mortar – 85% of transactions are still in stores – another victory for Walmart, which has more than 11,360 sales units retail in the world.
For Walmart, however, international activities and the delay in advertising are upside down.
At the same time, Amazon Web Services will continue to propel Amazon's profits into a space where Walmart can not compete.
"It generates a steady profitability," funds "the prodigious investments of the retail trade and offsets the periodic and sometimes significant retail business losses that may result from the myriad investments," wrote researchers. .
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In the battle between the two giants of retail, some small businesses are victims. Moody's noted that once Walmart or Amazon targeted a new product to add to its business, small retailers could claim casualties.
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