Walmart Vs. Amazon: Confronting The Retail Juggernaut

Amazon has been the primary reason for the current millennial generation to head to their screens instead of stores and this trend is not expected to change in the future as advancements in technology help improve the online retail experience. With the ever-increasing popularity of Amazon.com as your one stop shopping destination, Big Box retailer, Walmart, has had to come up with a strategy to tackle the “Amazon Effect” (Read, 2016). Although Amazon has made its presence prominent in various business sector, this report will primarily suggest a marketing strategy that Walmart can use to optimize their online platform to give competition and remain a relevant player in the decade to come. As a result of the research and assessment, I would recommend the following:

Adopting new upcoming technology like voice recognition to enhance the online retail experience without compromising their brand identity.

Voice recognition will also lead to increased impulse buying on their platform by using this technology for item suggestion.

Walmart’s core competence is its existing reputation, its warehouse style physical stores and its verified suppliers. It must maximize their relationship with their supplier in order to win the retail industry.

Today more people are spending time online than they did a decade ago. It is also obvious that most of that time is spent on shopping or browsing through online shops. A few years ago, most of the money that goes to online retailers today used to go to brick and mortar businesses like Walmart. The reason is that customers today are aware of what they want and want to optimize their time. They look at shopping as a chore. Most shoppers today know what they want when they enter a store and physical movement in stores can be tracked to improve website experience and overall customer satisfaction. Also integrating new technologies to provide excellent customer experience is key to the retail market of the future. Purpose of Study Walmart’s net revenue in 2017 was 481 billion U.S. Dollars (Walmart, 2017) worldwide whereas Amazon’s net revenue in 2017 was 178 billion U.S. Dollars (Amazon, 2017). However, it is very important to remember that, Amazon, valued at 458 billion U.S. Dollars, is worth nearly twice as much as Walmart.

With Amazon’s acquisitions of Whole Food in 2017 and the development of Amazon Go has clearly displayed its intention of entering the brick and mortar space in the coming decade. Walmart has introduced free two-day shipping on orders of $35 or more and has plans to double its online grocery pickup locations to about 2,100. Walmart must adopt be able to integrate technology into their strategy, one that is similar yet different from Amazon.

As more people get comfortable talking to their devices, retailers will have the advantage to use this technology in their websites and apps to enhance the customer retail experience. With virtual assistants on the rise such as Google Home and Amazon’s Alexa, voice recognition is the game changer in the retail business as customers today increasingly prize ways to complete chores or get the information they need easily and quickly. But in order to adopt a strategy to ensure that voice recognition integrated into the store website will be useful, we need to study a number of things. Page views translated to purchases Anastasios Panagiotelis et al performed a thorough analysis to establish the link between purchase incidence, sales amount, visit duration, and number of pages viewed by customers. The authors showed how this analysis can be adjusted to account for online retailers with products at a very limited number of price points. They also demonstrate the versatility of the model by using it to investigate empirically the relationships between the visit and sales variables, both within and across different product categories.

From this research we can estimate how many page views of the Walmart online store result in purchases. It will also help gauge what product types do consumers usually prefer while using online retail as their preferred mode of shopping. By analyzing this data, we can track purchase habits of customer and offer suggestive products that will lead to impulse buying and increase average purchase. Customer Segments Today’s online shoppers are quite similar to regular shoppers in terms of their shopping motivations and store attribute importance. Christodoulides stated that a brand is highly appraised when the consumer responds positively to the marketing of goods with well-known brands in contrast to similar unbranded goods.

A potent brand experience is evoked through sensations, thoughts, feelings, passion, and behaviors. Walmart has a strong portfolio of suppliers and most customers know the brands as they have been shopping at physical stores since they were children. Amazon on the other hand is facing multiple lawsuits for the counterfeit products listed on their website. Walmart has a considerable advantage if it reinforces their core competence of verified suppliers and markets the process and checks put in place to ensure that the products they sell are 100% genuine. Rezaei states that online retail branding environment and app retail branding environment is changing the way consumers behave as well as their attachment to brands in different environments, and chances are that consumers have different perspectives while approaching products and services through multiple channels. Based on their findings of moderation analysis, those who make purchases through apps have higher brand experience and brand attitudes compared to online shoppers. In addition, app shoppers’ brand attachment is higher while they experience the brand. Walmart has 5 core values that define their brand experience – Caring, Authentic, Innovative, Straightforward and Optimistic. The question arises how this can resonate in their online platform and provide a holistic experience to customers.

Voice recognition will offer a unique platform experience but what does one do when voice recognition can’t identify the item. This is where Walmart’s customer service center enters the picture. In the event that voice recognition fails, the system will alert the service center and aт employee will call up the customer to ensure that the sale goes through. Research shows that an examination of online patronage behavior and a comparison of shopper typologies would reveal shopper segments that are similar to those found in traditional store formats.

There are essential eight types of online shoppers. Five of them are similar to those found at traditional formats. Based on these segregation three new customer segments have been identified in the online retail space namely e-window shoppers, interactive shoppers, and risk averse shoppers. By acknowledging these shoppers, we can understand why Walmart will need to keep their physical stores as well as increase their online presence. Most spend an enormous amount of time online and can be converted to regular online shoppers by addressing safety and security concerns and providing physical store contacts for returns. With Walmart being able to provide an interactive online experience whilst keeping their prices same as the physical stores, they can increase their online orders immensely.

Innovative way to engage customers online

The term retail theatre is used quite often in the retail industry. There has been a lot of research conducted to provide a conceptual overview of the theatrical movements and how serrvice managers might use these approaches to improve retail practice. Baron et al. emphasize on how businesses have embraced new ways to create consumer interest in stores and merchandise as a means of differentiation in a competitive market place. The authors provided various real-world examples to demonstrate how retailers are currently using the expression “retail theatre”. Now imagine delivering the same experience through voice recognition through the introduction of a virtual assistant with an identity. Alexa, Cortona, Siri, Google Home do not have physical embodiments or faces. Hence, they lack a key aspect of identity. So even though people are comfortable talking to their devices, they subconsciously know that they are talking to a machine.

Face perception is an individual's understanding and interpretation of the face, particularly the human face, especially in relation to the associated information processing in the brain. From birth, faces are important in the individual's social interaction. Face perceptions are very complex as the recognition of facial expressions involves extensive and diverse areas in the brain. Take the example of Hatsune Miku. She appears on billboards, in TV commercials, and gives sold-out concerts to legions of fans the world over. People are aware that Hatsune Miku isn't even a real person; she's a computer program. “There were many unique virtual singers before Hatsune Miku — coming from many different companies—but none of them spread beyond their intended audience of composers.” The reason for her popular is rather simple than complicated. Yamaha gave Miku an identity for people to relate to. She was more than just character design, she was "an android diva in the near-future world where songs are lost." By giving their voice composing software a backstory, an easily recognizable face and voice, Yamaha has earned US$120 Million+ since Miku’s “birth” as of 2012.

Voice shopping is still unventured territory in retail, with only few customers testing it out. The voice shopping market was essentially invented by Amazon and it has a dominant position due to its Echo family of devices. Conclusion 2017 saw Walmart taking a huge step to battle Amazon on the retail front. Walmart partnered with Google to enable voice shopping much like that of Amazon Echo. To encourage customers to buy Google Home rather than Amazon Echo, Walmart offered to give customers a $25 coupon off a future Walmart order if they buy a Google Home or new Google Home Mini from Walmart when they link their accounts to Google Express. This partnership will allow Walmart to take advantage of Google's artificial intelligence (AI) capabilities and be able to push personalized promotions to shoppers. Personalized promotions, combined with the ease of voice ordering, may encourage time-pressed shoppers to purchase more through these devices, thereby driving up e-commerce sales for Walmart. However, this partnership is still limited to only customers who have the luxury to invest in smart speakers. Although this partnership has given Walmart a considerable advantage in the future of retail.