ASSIGNMENT COVER SHEET RAGC

ASSIGNMENT COVER PAGE

Course Code: BUSM4532

Course Name: Business Operations Management

Location & Campus: RMIT SGS Vietnam

Title of Assignment: Assessment #4 – Individual work – Case study

File (s) Submitted: BUSM4532_Assignment 4_3805624_Linh

Team Name/Group #: None

Student Name Student ID Student Contribution to

Number Assessment
Pham Thi Thuy Linh s3805624 100%

Assignment Due Date: September 9, 2019

Date of Submission: September 8, 2019

Number of Pages including this 20 pages

one:
Word Count 4094 words
Main content, excluding
appendices and references)
 ASSIGNMENT COVER SHEET RAGC

AMAZON AND WALMART ON COLLISION COURSE CASE STUDY ANALYSIS

Executive Summary

The two giants in offline and online retail industries, Amazon and Walmart, are planning to make an
omni-channel transformation. In this journey, each has its own distinctive capabilities that either help
to thrive, or inhibit the process. With Walmart, its lowest-price advantage turns to be a disadvantage
when the retailer comes into omni-channel which incurs a lot of costs. On the other hand, having a
wide physical network, which is assumed to place a burden on finance, is actually a huge advantage
in terms of logistics and omni-channel customer-experience provision. With Amazon, although less
physical presence was proved to be cost-saving and a considerable competitive advantage of the e-
commerce company against brick-and-mortar retailers, this model seems to be inferior when the
company moves to omni-channel, which emphasizes on customer experience. However, the
customer-oriented philosophy is a great plus for Amazon in getting customers engaged.

Because these two giants come to omni-channel from different starting points, their marketing
strategies (product, price, promotion and place) are not the same, except price and product. Both
offer a wide range of products and services and adopt the low-price strategy. However, Walmart’s
pricing strategy proves to be more desperate, as it wants to embed this into customer’s mind. While
Walmart doesn’t spend much on promotion, Amazon does the opposite. While Walmart has a strong
physical presence and plan to slow down the new opening and expansion process, Amazon wants to
acceleratingly create its physical footprint. Because of their different approaches, their financial
implications of omni-channel transformation are not the same. The financial implication for Walmart
is in logistics (especially returns process), IT (for data analysis and app-based service development),
remodeling physical stores (convert their traditional purpose into omni-channel way), whereas that
for Amazon is logistics for grocery and clothes (with the current physical network), IT and creating
physical presence. Despite that, it is undisputable that both have their success in the playing field of
their nemesis.

Having acknowledged the inherent advantages, past successes, financial implications and marketing
strategies of both behemoths, I suggest several actions for each that they can use to confront with
each other in omni-channel revolution.
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Contents
I. Introduction....................................................................................................................................1
1. The trend of omni-channel retail and what is it?........................................................................1
2. The aim of the essay...................................................................................................................1
II. Decision Analysis...........................................................................................................................1
1. The companies’ distinctive capabilities and their impact on omni-channel approach...............1
a. Hypothesis 1: Walmart’s problem is because it is Walmart....................................................2
b. Hypothesis 2: Walmart’s physical location network helps it effectively evolve for an omni-
channel future.........................................................................................................................3
c. Hypothesis 3: Amazon’s precedent ‘less physical presence’ practice turns to be a challenge
for its omni-channel evolution................................................................................................4
d. Hypothesis 4: Customer orientation philosophy helps Amazon stand out..............................4
2. Marketing strategy......................................................................................................................5
a. Walmart...................................................................................................................................6
b. Amazon...................................................................................................................................7
3. Past success in the playing field of each’s nemesis (Amazon offline and Walmart online).......8
a. Walmart online........................................................................................................................8
b. Amazon offline........................................................................................................................9
4. Financial implications of the omni-channel transformation.......................................................9
a. Walmart...................................................................................................................................9
b. Amazon.................................................................................................................................10
III. How should the two retailers confront with each other and build their omni-channel operations?
.....................................................................................................................................................11
1. Walmart.....................................................................................................................................11
2. Amazon.....................................................................................................................................12
IV. Conclusion...................................................................................................................................13
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I. Introduction

1. The trend of omni-channel retail and what is it?

Due to the fact that today’s consumers are demanding a shopping experience that is personalized,
convenient and modern (Fred, 2019) and an integrated platform combining digital and physical
retail, retailers are looking for a new solution to engage and retain their existing and potential
consumers. Walmart, an undisputed retailer in the US, tries to massively expand their e-commerce
business to increase their growth, whereas Amazon, a dominant e-commerce company, also heavily
invests in building physical stores to sustain its high rate of growth. It is argued that omni-channel
retail has been shaping the retail industry. So, what is omni-channel retail?

Rigby (2011) points out that omni-channel retailing means “an integrated sales experience that melds
the advantages of physical stores with the information-rich experience of online shopping”. This
definition is supported by Kamel and Kay (2011), who then added that a true Omnichannel
“desire[s] to serve the customer however, whenever and wherever they wish to purchase
merchandise (and return it too)”.

2. The aim of the essay

This essay aims to provide an analysis of each company’s distinctive capabilities, market strategy,
financial implications and their past success in the playing field of their nemesis; and finally, some
recommendations for their movement towards omni-channel operations.

II. Decision Analysis

1. The companies’ distinctive capabilities and their impact on omni-channel approach

a. Hypothesis 1: Walmart’s problem is because it is Walmart

Walmart so far has been defined itself as a market leader offering the lowest prices. When it entered
omni-channel, this is still embedded into customer’s mind. Therefore, although Walmart has under
several cost pressures, it has to either maintain or lower its current price.
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The first pressure is from logistics operation (store-customer’s place). Retailers, including Walmart,
want to accommodate customer delivery preferences, either faster delivery or promised delivery
slots. However, this leads to less efficient route planning for delivery trucks and negative impact on
the utilization of personnel and vehicles. For example, with the pressure of delivery commitments,
some trucks may go with less than the container maximum load, which leads to an increase fuel
expense and a reduce in productivity (i.e.: the number of destinations reached in a day). The situation
may even worse when the return process is involved. It increases the logistics complexity of the
online operation.

The second pressure results from additional staff employment. In order to run its online grocery
services, such as Grocery Pickup and Delivery, Walmart has to rely on ship from store and in-store
picking, which result in additional staff employment. It has introduced some ways to solve this
problem, such as increasing prices for some items purchased online or enlisting their store
employees to deliver online orders on their way home from work. However, while the former
approach receives criticism and complaints from consumers, the latter involves extra pay.

The third pressure is from shipping fee. Amazon’s home-delivery service (e.g. Prime Now, Amazon
Fresh), requires an annual fee and is only available for Prime members. The same is for delivery
options of Target and Costco. Given the fact that even consumers who prefer the convenience of
shopping for groceries online tend to dislike paying the shipping charges, Walmart rolled out free
shipping in two days for orders larger than $35, without any membership fees. This may attract more
people using Walmart service; however, with an average cost of picking and delivering home borne
by retailer at $10-15 per order, Walmart faces an economic challenge.

Overall, the intangible pressure of offering low prices poses a challenge for Walmart when it tries to
make omni-channel revolution.

b. Hypothesis 2: Walmart’s physical location network helps it effectively evolve for an

omni-channel future

Another distinctive capacity of Walmart is a wide and dense physical store network. Unlike the
previous factor, this helps Walmart move closer to the omni-channel future.

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It may be argued that the physical store network only works well in case of brick-and-mortar
retailing. However, even when Walmart moves towards omni-channel retail, the large number of
stores available is also very helpful in providing omni-channel experience for consumers. Some
examples from the case as follow:

Walmart installed many pick-up towers at many of its stores that allow customers to scan the online
order barcode and collect their parcel in less than 45 seconds [‘click and collect’ method].

When consumers go inside the store and turn on the Walmart mobile app, it slips into ‘store
assistant’ mode, providing shoppers with latest information about the products, how much their
shopping carts would cost and an automated checkout process if they want [webrooming, i.e. search
online for information but purchase in a physical store]

The return process is simplified by the mobile express return service where customer select the
online transaction and finish at a physical store where they return items using the express lanes.

All these three particular initiatives blend well online and offline shopping, which is a criterion for
omni-channel (Rigby, 2011). These cannot succeed without the appearance of physical stores. This is
a distinctive capability (compared with Amazon) helping to effectively evolve for omni-channel.

Moreover, the ‘inside-out’ radial expansion approach - the diffusion of stores radiating out from a
central point in all directions - is also beneficial in terms of logistics (distribution center-store). With
its stores close to each other, Walmart can facilitate and economize the logistics for shipments, for
example a single truck makes multiple deliveries.

Overall, Walmart’s physical network enables it effectively undergo an omni-channel transformation.

c. Hypothesis 3: Amazon’s precedent ‘less physical presence’ practice turns to be a

challenge for its omni-channel evolution

While other retailers, such as Walmart, usually depend on shipping from one of the distribution
centers and the stores, Amazon invested in developing shipping from warehouse and automated dark
store picking. This logistics exercise is considered to be cost-saving and effective.

When the company moves to the online grocery shopping business, it faces some disadvantages of
its current logistics practice. Unlike other types of goods, grocery is perishable; consumers usually
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require same-day delivery or even less; a grocery basket, while large in terms of volume and weight,
has a relatively low dollar value, or low margins. Transporting grocery goods from warehouse or
dark store as usual may add up the transporting costs and longer lead-time.

Apparel and grocery online shoppers likely return their bought items the most, with the return rate of
apparel is 30%. Consumers buying clothes online, especially women, want to try on their clothing
before they buy it. For the consumers shopping grocery online, their key concerns are freshness and
quality. They want to get quality assurance from retailers. So, what if the clothing items or the
quality of food do not satisfy them? They may use either online or offline return service and the
latter is more popular as 62% of the customers prefer it. With Walmart, consumers can return items
bought at stores and receive up to 100% money back. With Amazon, this can be a challenge because
of its physical presence lack. Although the company has built more physical locations, it is still
inferior to Walmart as the Walmart has more than 4,700 stores located within 10 miles of 90% of
Americans.

It can be concluded that the advantage of e-commerce business (few physical stores) is a
disadvantage in omni-channel business, especially in grocery and apparel category.

d. Hypothesis 4: Customer orientation philosophy helps Amazon stand out.

Unlike Walmart, which offers its services to all customers, most of services offered by Amazon are
primarily for Prime members. For example, Amazon Prime allows its members unlimited free two-
day delivery on over 100 million different items, free access to media items, an unlimited cloud
storage, e-lending and so on. Prime Now provides members free two-day delivery on a large
selection of grocery items. Prime Wardrobe allows members to try clothes at home before paying.
They can order up to eight items, keep whatever they want and send the rest back. They are charged
only for item they keep and shipping is free both ways.

The simple reason for these Prime-member-oriented approaches is because Prime members spend 4-
6 times more than non-Prime shoppers and become loyal customers to Amazon. About 40% of
Amazon Prime members spend over $1,300 a year on Amazon, while only 8% of non-Prime
shoppers do so. (Exhibit 1)

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Some people may argue that Walmart has also provided a wide range of services providing value
proposition to shoppers. However, in my opinion, Amazon is more competitive as it has first-mover
advantage and its services are better at satisfying unwritten demand of customers. Three of four
customer concerns associated with delivery are related to how to protect their delivered package
from weather, animals and thieves when they are not at home (Ladd, 2018). Although Walmart and
other e-commerce companies have been launching their delivery service for a while, they haven’t
realized concerns towards package left on the doorstep. In contrast, Amazon introduced Amazon
Key, an innovation that enables keyless entry, guest entry and in-home delivery, especially when
they (Prime members) are away.

Customer orientation has been the core philosophy of Amazon since it was established. This has
been materialized into a lot of activities to create a greater value of convenience for customers,
especially Prime members. Over a period of time, those activities became unique to Amazon and
became a stepping stone for its competitive advantage in the omni-channel area.

3. Marketing strategy

Kotler and Keller (2016) defined that “Marketing Mix is the set of controllable variables that the
firm can use to influence the buyer’s response”. Marketing mix consists of four groups, commonly
known as 4Ps: product, promotion, place, price.

a. Walmart

Product: Walmart offers a wide range of products, from groceries, general merchandise to health
and wellness range. The acquisition of several private brands and Jet (an innovative e-commerce
company) helps Walmart expand its range of online apparel and accessories merchandise as well as
other categories. In 2017, its website offered close to 75 million SKUs. The retailer also provides
customers with services, ranging from home-delivery, online ordering and pick up in person at stores
(Walmart Pickup, Pickup Today, pick-up tower), mobile express return service, personalized voice
shopping, etc.

Place: Walmart has a vast and dense store network, especially in the US, including supercenters,
discount stores, neighborhood markets and others. This is an inherent advantage of Walmart to

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approach American consumers, compared to other retailers (Exhibit 2) and to the omni-channel,
which I mentioned in hypothesis 2.

Price: Walmart’s core philosophy is offering the lowest prices. This is demonstrated by its ‘everyday
low prices’ approach to all its customers. Walmart has hundreds of discount stores, which offer items
at prices that are lower than typical market prices. The reason of this pricing strategy may lie on the
product. Most of Walmart’s products are necessities or everyday items, which can be found in other
stores, replaced by other goods (i.e. substitutes) and price elastic (i.e. demand changes considerably
after a price change). Therefore, offering the lowest price seems to be strategic and this has been the
cornerstone of Walmart’s success.

Promotion: Promotion is relatively infrequent at Walmart, averaging thirteen events annually

relative to more than fifty at competitors. The reasons may lie on Walmart’s placing and pricing
strategy. In average, at every 10 miles in the US, there is a Walmart store, which enables consumers
expose themselves to the brand; the greater frequency (i.e. the average number of times a person
exposes to the brand) it is, the deeper brand awareness Walmart has. Because of product
characteristics, people are usually price-conscious. The pricing strategy seems effective in attracting
consumers. Therefore, much investment in promotion seems useless and less promotion expenditure
is considered as a cost-saving plan, or a compensation for its physically large-size operation and
pricing strategy.

e. Amazon

Product: Besides a wide range of products in the categories offered by Amazon, products made by
other manufacturers, the giant also provides hardware products, which are no longer being stocked
by retailers such as Walmart and Target. This makes Amazon’s product range be more exclusive and
when people believe so, this perception affects consumers’ behavior in choosing retailer.

Besides that, Amazon offers many services for both third-party sellers, shoppers (e.g.: fee-based
subscription program Amazon Prime, Prime Now, Amazon Key, Prime Wardrobe, etc.), and Amazon
Web Services (e.g. computing, storage, database for startups, enterprises, government agencies and
academic institutions).

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It is noticeable that sales from products and services for shoppers (i.e. online stores and subscription
service) accounted for the highest proportion in net sales (Exhibit 3), which is the rationale for
Amazon’s concerted effort to develop private-label brand name and out of box services.

Place: Until 2017, in addition to its online platform, Amazon has bookstores, pop-up stores, grocery
stores (acquired Whole Foods) and trucks selling must-have items at discounted prices across the
US. Although Amazon’s truck model is inferior to Walmart’s discounted store model, in terms of
numbers and capacity, the flexibility and its service is a compensation for that. Customers can
choose the item through the mobile app, pay for it and fix a time for pick up in person from the
truck. This can be an effective way to utilize the limited capacity and reduce administration cost.
Regarding online shopping, Amazon has been the most popular platform in the US (Exhibit 4)

Price: Like Walmart, Amazon manages to offer lower price for their products and services than
others, because it can access to data on customers’ price preferences. It develops its own brands and
selling items at a lower price. It launched treasure truck fleet to sell necessities at discounted prices.
When it acquired Whole Foods, it slashed the prices at Whole Foods by 25-50%.

Bezos once said that “I didn’t want to repeat the mistake of Steve Jobs — pricing the iPhone in a
way that was so fantastically profitable that the smartphone market became a magnet for
competition”.

The rationale behind the strategy ‘keeping the price low’ is to create a low margin industry, prevent
competitors entering and then gradually dominate the whole market.

Promotion:

Unlike Walmart, Amazon spent on promotion quite often. According to the financial performance of
Amazon over 2000-2017, the percentage of marketing on total expense increases (Exhibit 5). It
advertised on fashion-centric platforms, sponsored fashion event, and introduced new collections
from celebrities on its website. The opening of pop-up stores is to boost product awareness, drive
more traffic to Amazon’s online store through customer-product trials and interactions. This activity
is called showrooming, where customers visit a physical store to gather information and experience
but finally purchase online, a shopping habit in omni-channel.

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4. Past success in the playing field of each’s nemesis (Amazon offline and Walmart online)

a. Walmart online

When Walmart acquired Jet, together with Jet’s data and technology expertise, Walmart Labs carried
out big data analysis and generated optimal solutions for getting people engaged.

In addition to Jet, it has been successfully acquiring numerous private brands, mainly in grocery and
apparel; these acquisitions enable it to expand its range of two areas online. These categories are
expected to grow remarkably online in the next coming years in the US, therefore, Walmart’s
acquisition is a remarkable success.

In 2017, it acquired Parcel, a 24/7 operation that delivers packages the same day. The retailer also
launches several services for improving customer shopping experience.

All of these efforts are paying off when Walmart achieved high growth in e-commerce sales,
recording $11.5 billion in 2017. In terms of platform preference during online shopping, although it
was less popular than Amazon (44%), it was still in the top with 10% surveyed people were aware of
its platform and enjoyed using it (Exhibit 4).

f. Amazon offline

Although bookstores did not find resonance with the larger audience and generated negligible
revenues for Amazon, they and 40 pop-up stores did quite well in terms of marketing, creating and
boosting product awareness, providing customers with product trials and interactions and therefore,
drove more traffic to online stores. This can be evidenced through a remarkable increase in sales
from online stores from 2015 to 2017 (Exhibit 3)

Amazon started getting sales revenues from physical stores thanks to Whole Foods acquisition in
August 2017. This sale accounted for 3.26% of total, although Amazon got this in four months. This
was one of its initial successes in brick-and-mortar retail. (Exhibit 3)

“Pick-and-go” Amazon Go shopping application, which allows customers to pay via Amazon
account, pick up items at physical stores and simply walk out. This has proved to be a potential
service in the future (Joyce, 2018). Although Walmart is trying to compete by developing its own

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Amazon Go-like technology for its stores, it is still a work in progress and it is “not as flashy as
Amazon Go” (Tilman, 2019)

5. Financial implications of the omni-channel transformation

a. Walmart

Pursuing omni-channel model, for Walmart, means simultaneously maintaining and improving
retailing at traditional physical stores and expanding its e-commerce business. There are some
significant financial implications that need to be considered.

Logistics costs: Online shopping usually intertwines with highly-required delivery, such as faster or
promised delivery slots, and high return rate. Regarding delivery, as I mentioned in the hypothesis 1,
the order fulfilment cost involves higher logistics cost. In terms of high return rate, Walmart has to
bear the reverse logistics costs including transporting items from customers, testing the returned
item: if it has any manufacturer’s defects, it will be returned to the manufacturer and the costs
involved will be transferred then; if not, Walmart has to bear the restocking costs of the returned.

IT costs: Walmart has invested heavily in technology as it believes technology is a critical enabler
for enhancing the customer experience. This cost includes launching and developing several AI
services (e.g. chatbots, store assistants or AI-powered smart store), carrying big data analysis about
customer behaviors, designing optimal solutions for supply chain and last mile issues, delivering
operational efficiency by optimizing business processes irrespective of the platform used; designing
app-based convenient features such as scan-and-go, etc.

Remodeling physical stores: besides e-commerce, physical presence plays an important role in omni-
channel transformation. However, its role is not just placing items on shelves and selling them as
conventional stores, it needs to be restructured to take on other responsibilities: showrooming,
allowing return flexibility (i.e.: buy online and return in store) and fulfilment flexibility (i.e.: buy
online and pick up in store). Therefore, Walmart has to pay for remodeling its stores to implement
these roles, such as build express lanes for faster pickup, install pickup towers.

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g. Amazon

Contrary to Walmart, to embrace omni-channel revolution, Amazon needs to continue its online
shopping platform as well as create its own brick and mortar presence. This plan also incurs some
costs that shouldn’t be overlooked.

Costs for grocery baskets and clothes area: as I mentioned in hypothesis 3, grocery is a field that has
some distinctive characteristics and also low margins. Therefore, mentioning financial implications
in this particular field is worthy. When stepping into this business, with current physical network
(fewer brick-and-mortar stores than Walmart), Amazon has to cover transporting cost, cost for longer
lead-time, and return.

Regarding apparel, although it is the category that Amazon has a more considerable advantage than
others (because of extensive range of apparel private labels), especially with Walmart, it also faces
the challenge of high return rate rooting from the fact that shoppers cannot have a tangible
experience. High return rate results in logistics complexity and associated costs incurred.

Creating physical presence: in order to solve the issue of inability of providing tangible experience
and boost marketing, Amazon has opened bookstores, pop-up stores, grocery stores (acquired Whole
Foods) and trucks selling cheaper items. This strategy may involve expenses for the facility itself
(renting, licensing and permitting fee, decoration), equipment and technology costs, operating and
staffing costs for physical stores, etc.

III. How should the two retailers confront with each other and build their omni-channel
operations?

1. Walmart

Since 2015, Walmart has been increasingly reduced its spend on physical stores expansion and
relocations and instead focused more on e-initiatives, technology and supply chain and remodeling
existing stores (Exhibit 6).

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Technology and supply chain is the key for omni-channel future that Walmart pursues. Therefore, in
the upcoming time, the retailer should invest more in analyzing customers’ shopping behaviors,
service preferences (e.g.: delivery, customer care, payment method) and which products in each
category that customers prefer and why. It is really important for Walmart to create its own private-
label products to boost sales both in online and offline platform, increase sales of other stuff by
introducing exactly what they need in “Frequently bought together” section, or “The last time you
missed” area whenever that product is available. Focusing more on in-depth analysis in customers
attitude can help Walmart deliver a better service which accommodate customers’ demand and even
figure out some hidden needs, hence, gain the first-mover advantage. Thanks to the result of these
analysis, Walmart can either to redesign its website and add more easy-to-use features to attract all
types of customers.

Regarding supply chain management, as I mentioned in hypothesis 1, in order to maintain or even

lower prices for customers, Walmart needs to utilize its buying power to lower the costs from
suppliers. In online shopping, it needs to clarify the shipping costs of both forward and return
process: which situation suppliers need to bear and how they do. In grocery business, because of its
distinctive characteristics, Walmart needs to eliminate return possibility by training staff and
simplifying the picking up and transporting process.

Regarding physical stores, in order to save money and increase effectiveness when these stores play
the right role, I suggest Walmart should increase the size of some stores, add some omni-channel
strategies such as showrooming, return flexibility and fulfilment flexibility, and decrease the number
of stores in the same neighborhood. There are three reasons for this. Firstly, most of US population
know Walmart and it doesn’t need to maintain its dense physical network to gain brand awareness.
Moreover, people prefer convenient ways of shopping, therefore traditional shopping is no longer
attractive. Secondly, upsizing some stores enables Walmart to carry more products for showrooming,
have more space for return and pickup services, and therefore, encourage customers to experience
products, order online and pick up items at stores. Finally, reducing stores numbers save on facility
costs and labor costs. Discounted stores should share the same roles as normal stores.

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6. Amazon

Regarding online shopping, Amazon has done very well in getting people engaged. Although it has
some disadvantages, for example, inability to try on clothes or having package stolen or damaged,
services such as Prime Wardrobe or Amazon Key solve that.

Regarding delivery concern, because of costly single-package B2C, Amazon shouldn’t invest much
in home delivery, instead, it should focus on hub locker delivery system or self-service kiosks for
customers picking up packages themselves, or fulfilment flexibility, by using a special key or a
barcode scanner, which is safer and more secure.

Regarding Amazon’s plan to create its own deliveries without traditional cargo carrier like UPS or
FedEx, I think it is a clever and inevitable solution in order to reduce transportation costs and
delivery lead-time. However, perhaps, it is more appropriate when Amazon gets a strong position in
omni-channel marketplace because currently, it has a lot of urgent things to do. Moreover, if it
reduces single-package B2C delivery and extend the fulfilment flexibility mentioned above,
reducing dependence on cargo carriers is not necessary.

In terms of physical presence, it should use Whole Foods 470 stores as showrooming, fulfilment
flexibility, and return flexibility locations. It should remodel these stores in order to carry more types
of products, such as merchandise, besides grocery. Whole Food stores’ parking lots can be used
occasionally as showrooms creating customer-product trials, fulfilment and return areas prior to
special events such as Amazon Prime Day, Black Friday, or Christmas.

IV. Conclusion

This report aims to analyze Walmart’s and Amazon’s penetration into omni-channel. While Walmart
tries to strengthen its e-commerce business, Amazon invests in making its physical footprint. Each
has their own distinctive capacities resulting from their core philosophy and business practice;
however, these abilities may either help or inhibit their omni-channel revolution. They have been
achieving in the playing field of their nemesis. They have different marketing approaches in four
areas: product, place, price and promotion, and this, together with their strategies and current
situations leads to different implications. In order to grow, both retailers should enhance their
dominant position in the area and enter the other market step-by-step.
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Reference:

Fred, G 2019, “Three trends that will boost Omnichannel Commerce In 2019 -- And Two That
Won't”, Forbes, 31st January, viewed 29 August 2019,
<https://www.forbes.com/sites/forbestechcouncil/2019/01/31/three-trends-that-will-boost-
omnichannel-commerce-in-2019-and-two-that-wont/#61386f9246b0>

Joyce, G 2018, ‘Amazon Go Data: How is the Internet Reacting to the Store of the Future?’,
Brandwatch, January 22nd, viewed 01 September 2019,
<https://www.brandwatch.com/blog/react-amazon-go-data/>

Kamel, J. & Kay, M. 2011, ‘Opening the door to omni-channel retailing’, Apparel Magazine, 53(2),
pp. 1-4

Kotler, P. and Keller, K 2016, Marketing Management, 15th edn, Pearson, Boston.

Ladd, B 2018, ‘Amazon, Target, Walmart and Kroger: The Biggest Problem In E-Commerce Has
Finally Been Solved’, Forbes, 18 September, viewed 1 September 2019,
<https://www.forbes.com/sites/brittainladd/2018/09/18/amazon-target-walmart-and-kroger-
the-biggest-problem-in-e-commerce-has-finally-been-solved/#6b952d2c9ad7>

Rigby, D., 2011, ‘The future of shopping’, Harvard Business Review, 89 (12), pp. 65–76

Tilman, M 2019, ‘How Walmart's first AI-powered smart store compares to Amazon Go’, Pocket-
lint, 27 April, viewed 8 September 2019, < https://www.pocket-
lint.com/gadgets/news/amazon/147883-how-walmart-s-first-ai-powered-smart-store-compares-to-
amazon-go >

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Appendix

Exhibit 1: Amount of money spent by Prime versus non-Prime members on Amazon in a US-based
survey (2016)

Exhibit 2: Number of stores and sales (billion USD) of some retailers in the US in 2017
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Exhibit 3: Break-up of Amazon’s total sales 2015-2017 (USD million)

Exhibit 4: Preferred platforms during online shopping (2017)

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Exhibit 5: Percentage of marketing in total operating expense from 2002-2017

Exhibit 6: Allocation of Walmart’s capital expenditure (2013-2017)

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Teacher’s feedback: