Is Walmart a threat to Amazon? Back in 2000, BusinessWeek reported that the race between the two companies wasn’t even close, as Walmart.com lacked Amazon’s key features that made online shopping fun and easy — namely, simplified site navigation, customer reviews, product recommendations, and a wide inventory selection. But a lot has changed since then. Walmart.com has since made incremental but significant improvements. For example:
In 2006, it underwent a major redesign, which among other things speeded up its checkout process (less than four clicks to product checkout from any starting point).
In 2007, it enabled customer reviews and ratings. It also linked to a newly-created company blog (checkoutblog.com), to give shoppers a first look at upcoming products, explain the company’s purchasing decisions and seek buyer feedback.
In 2008, it launched ElevenMoms.com, featuring videos and money-saving tips from influential mom bloggers by showcasing them on the site as well as linking to their individual blogs. While the women aren’t paid, the company updates them on new developments and suggests products for them to review.
It also created a “Connect & Share” community-building section. Currently in beta, the section includes customer stories, a customer Q&A exchange, and topics such as healthy living, meal recipes, environmental tips, etc.
In June, it partnered with richrelevance, which provides personalization and product recommendation tools for online retailers. (Note: richrelevance was founded by David Selinger, who formerly led personalization research and development at Amazon.com.)
And like Amazon, just last month, it opened up its doors to third-party sellers like CSN Stores, eBags and ProTeam.com. The move added nearly one million new items to the site’s inventory, with plans to add more retailers and products in the future.
These are all good improvements, but are they enough to challenge Amazon.com? Media and technology blog All Things Digital says maybe one day, but not for now. The reason? Walmart.com is still way behind when it comes to sales numbers, and will need time to catch up. Indeed, trade magazine Internet Retailer says Walmart.com took in sales of only $1.7 billion in 2008, compared to market leader Amazon.com’s $20 billion.
Imran Khan, an analyst at financial services firm JPMorgan, says eBay.com may actually be the online retailer most at risk by Walmart’s latest improvements. This is because much of eBay’s revenue relies on third-party sales and they can’t afford to lose sellers to other platforms like Walmart.com. Amazon.com, says Khan, still has an edge in terms of inventory size and fulfillment options. (It offers fulfillment services to third-party retailers, which both Walmart.com and eBay currently lack).
Walmart, however, still has unique strengths it could use against Amazon — such as free in-store pick-up of online orders. “While Walmart has had mixed success online, it established a clearly differentiated, strong multi-channel position for itself upon introducing the site-to-store services two years ago,” said Sucharita Mulpuru, an analyst at market research firm Forrester Research, in an interview with DMNews.com.
Indeed, Walmart.com may be lagging for now, in terms of sales and user traffic. But if it continues to ape Amazon.com’s strengths while capitalizing on its unique advantages, such as site-to-store service, the company’s tremendous buying power, promotional opportunities in its brick-and-mortar stores around the globe, etc., it just may have a chance to eventually catch up — if not overtake — Amazon in the online retail race.
E-book sales are on the rise, but apparently, so too is the competition facing e-readers.
According to June 2009 data from the International Digital Publishing Forum (the trade and standards association for the digital publishing industry) and the Association of American Publishers (the trade association of the U.S. book publishing industry), domestic sales of e-books rose 224 percent over June of last year to $37.6 million. This information doesn’t include retail sales or sales to libraries, universities and professional institutions, so the picture may even be rosier.
Does this mean e-readers will soon be a hot commodity? For now, there are differing opinions among industry analysts. A study by financial services group Credit Suisse (as reported by TWICE, a consumer electronics trade publication) predicts e-reader sales could penetrate about a third of the U.S. adult book-reading population within five years.
However, a survey by research firm Simba Information (as reported by the Associated Press) found that most users actually read e-books on their personal computers. And while Amazon’s e-reader, the Kindle, has sparked interest in e-books, downloads of e-reading applications for smartphones have far outnumbered the Kindles sold, according to a report by technology and market research firm, Forrester Research.
With PCs and smartphones competing for market share, some analysts think e-readers could benefit from increased features and flexibility. Talking about the Kindle, Paul Starr, professor of sociology and public affairs at Princeton, said in a recent interview with MSNBC: "As it develops, how multifunctional will be it? More like a dedicated word processor, which only does one thing, or more like a computer, for which applications are written by the thousands? The more versatile it is, the better it will compete."
New developments continue to be made in the e-reader industry, suggesting more device versatility in the future. In fact, according to the Financial Times, Apple, Inc. is planning to launch a portable, full-featured, tablet-sized computer before the end of the year. The device, which book publishers reportedly see as an alternative to the Kindle, would enable access to the Web and to Apple’s online stores for software and entertainment. Full details haven’t been released yet.
Could the combination of an iTunes-type store for books and a “cool” device from Apple be a “Kindle killer?” We will have to wait and see what Apple’s product will look like. Will this “innovation” make e-readers the next “it” item, or just create disruption in the market?
In its most expensive purchase to date, Amazon snaps up rising rival Zappos for more than $900 million. This came as a surprise to those expecting the shoe e-tailer to hold out for an IPO, but what’s even more surprising was how Amazon announced the merger: CEO Jeff Bezos posted a video on YouTube, a move more characteristic of Zappos and its CEO Tony Hsieh, who himself broke the news on his company blog and Twitter account.
Indeed, Amazon may have the resources, technology and operational experience of an e-commerce giant, but it has long been criticized for not “getting” social media. A recent example is AmazonFail, where Tweeters lashed out at the company after it removed sales ranking of books with "adult content,” including LGBT-themed books. Amazon took a day to respond, and when it did, sent the statement to the Associated Press first, instead of fighting the fire where it started — at Twitter.
Zappos, on the other hand, has mastered Web 2.0 branding. In a recent survey by Abrams Research, the company was voted as having done the best job of using social media. Hsieh himself now has more than one million followers on Twitter, and encourages his employees to tweet, use Facebook and Multiply, or upload videos online to let customers get to know them personally.
“I think people worry too much about bringing their personal selves into business, when I think the way to succeed in today’s world is to make your business more personal,” says Hsieh in an interview for Mashable.com. That “personal touch” also means Zappos makes sure every customer leaves with a positive experience — whether through super-fast shipping, long phone conversations or 365-day refunds.
Will the Zappos culture be zapped, or will it be tolerated, if not emulated, by Amazon? That remains to be seen, but one thing is clear: social media know-how is becoming an indispensable tool in business success. As Hsieh concludes at Mashable.com, “Today anyone, whether it is an employee or a customer, if they have a good or bad experience with your company they can blog about it or Twitter about it and it can be seen by millions of people. It’s what they say now that is your brand.”
