Walmart is Well Positioned to Convert Amazon Shoppers

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Walmart is Well Positioned to Convert Amazon Shoppers

10/05/2018
Walmart is Well Positioned to Convert Amazon Shoppers
Walmart has begun to make some gains on Amazon and its shoppers, according to research from Packaged Facts

Walmart has a huge opportunity to convert Amazon shoppers into loyalists of its own stores and services – so long as it can get the ecommerce giant's fans to give it a try, new research reveals.

Omnichannel commerce, demographics, geography, assortment breadth and brand expansion are converging to widen the customer target beyond Walmart's "already massive" usage footprint, according to David Sprinkle, research director at Rockville, Md.-based market researcher Packaged Facts, publisher of the report, "Walmart U.S. Strategies and Shoppers."

"And against the backdrop of these changes, Walmart's pricing is as competitive as ever," Sprinkle noted. "All that needs to happen is for the uninitiated to give the retailer a try."

Walmart already is starting to make some gains on Amazon and its shoppers. For instance:

  • Some of the more affluent shoppers often associated more with Amazon than Walmart are giving the latter a try. While Walmart historically has relied more on lower-income consumers, its ecommerce platform is seeing sales skew more toward affluent households. Moreover, Walmart is carrying more and more upscale brands to appeal to more upscale consumers.
  • Walmart also is gaining on Amazon in terms of product assortment and meeting a greater variety of need states across categories, blending in-store product offerings with an "aggressively expanding" assortment of goods available through its ecommerce platform.
  • While Amazon's consumer engagement ecosystem, including its Prime service and gadgets such as Alexa-based voice assistant devices, helps gain and retain its own loyalists, Walmart is introducing services and features that chip away at the power of Prime. These include free two-day shipping, click-and-collect and subscription services. To compete further, however, Walmart will likely have to continue building major technology partnerships with Amazon competitors, as it already has with Google and Microsoft.

"Two years from now, will millions of affluent shoppers who would not have considered shopping at a Walmart location be interacting with the brand? Signs point to yes," Sprinkle observed. "This puts Amazon's core audience at risk."

Walmart operates more than 11,200 stores under 55 banners in 27 countries. The Bentonville, Ark.-based company is No. 1 on Progressive Grocer's list of the top grocers in the United States.