Friday, March 5, 2021

Walmart Vs Amazon with Technology / Service


Is copy-cat marketing a competitive tatictc or s lackadaisical strategy?  If you are looking for a true point of competitive differentiation according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® you need to remember that differentiation does not mean different it means familiar but with a noticeable differentiated twist.

Recently Walmart announced that it was removing the $35 order requirement for its Express delivery service just a few months after scrapping the same minimum order rule from its Walmart+ subscription service. Service is about more than just price and when combined with first mover advantage Amazon still leads the pack.

Battle for Share of Stomach

This move from Walmart is just the latest in the ongoing battler to garner market-share back from Amazon and bid to attract more shoppers to its e-commerce offering. While Walmart's growth in the e-commerce segment has been higher than Amazon in the last three fiscal quarters, but they were at a very low level.  In the case of Walmart thank goodness for the pandemic as the company has attracted new wave of shoppers to its grocery pickup service during the pandemic, some may not have wanted to walk into a store at any cost.

Now, Walmart's Express delivery service empowers customers to order both, food or non-food, delivered to their doorstep in two hours or less. Just, like Walmart’s pickup and delivery service, there is no up-charge any item everything is priced the same as it is on the shelf. Express delivery costs $10 on top of the existing delivery charge. Walmart+ members simply pay the $10 Express fee.

“Tom Ward, SVP of customer product at Walmart stated, “Many customers use Express delivery for when they’re in a pinch, whether it be a missing ingredient for a weeknight dinner or a pack of diapers,”  “Customers told us sometimes the items they needed in a hurry didn’t meet the minimum, so we’re removing it, making it even easier for customers to get what they need when they need it.”

With over 126 Million Amazon Prime members in the US Johnson wonders if once again Walmart is doing too little to late? Express delivery is currently offered in nearly 3,000 Walmart stores, reaching nearly 70% of the U.S. population. It is one of several no-contact pickup and delivery options at Walmart. Several of Walmart's other e-comm options continue to carry a $35 minimum, however: grocery pickup, regular delivery and Walmart+ delivery.

Walmart keeps pushing forward in a copy-cat style according to Johnson, while they are pushing to create more local fulfillment centers in its stores. The vision of what they can do to edify the customer with a point of differentiation seems to still allude them. Amazon Go is simply a fresher, fast, avenue of distribution that edifies the one-on-one customer relationship with interactive participatory technology and the tactile familiarity that consumers grew up with. That is hard to beat with yesterday’s distribution model.

As Ward defines it, a local fulfillment center (LFC) “is a compact, modular warehouse built within, or added to, a store. In addition to fresh and frozen items, LFCs can store thousands of the items we know customers want most, from consumables to electronics. Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. The items are then brought to a picking workstation, where the order can be assembled with speed.”

While Walmart’s focus on LFCs looks a bit dated we wonder if it might be prudent to edify the technology and ease some of the pain points for consumers.  While distribution in the early years was the foundation of Walmart’s success it looks as if its dependence within ongoing strategy might just become it Achilles’ heel.

Looking for a true point of competitive differentiation? Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: or 253-759-7869

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