Walmart reported on Tuesday that their online sales grew at a faster in the fourth quarter than Amazon’s. However, the Jeff Bezos-run Company is not going to give up.
According to the statistics, Walmart’s earnings topped forecasts, while overall sales missed estimates slightly. However, its e-commerce revenue increased even 29 per cent in the fourth quarter from a year ago, while Amazon reported earlier this month that total sales rose only 22 per cent in the same period.
Walmart haven’t talked about the money they generated from its digital business and the company is still smaller than Amazon online, but the pride is growing up fast. As CEO Doug McMillon pointed out that, Walmart was the second-largest online retailer in America by sales and its mobile app appeared among the three most popular retail apps last year”.
Also, Walmart was successfully expanding its services in 2016. They bought the e-commerce startup Jet that owns big online furniture seller Hayneedle and runs ShoeBuy. Moreover, Walmart bought Moosejaw, an online retailer of outdoor clothing and sports equipment, and expanded its online grocery business — now it offers curbside pickup and home delivery in some places.
Walmart is ready to enter the Chinese market as well. They owned the stake in JD.com, a Chinese e-commerce company that is racing with China’s market leader Alibaba and Amazon. Walmart is hoping that all these investments will help increase online sales for both its general brand and its Sam’s Club warehouse in China.
So, the Walmart team is serious about to oust the Amazon, and it seems like their efforts are paying off – their stock rose 3 per cent this year. But Walmart wasn’t the only retailer that reported good news last week. The stock of Home Depot gained slightly and now their shares are up 7 per cent.
However, these two companies may be the exception, not the rule. For example, Macy’s reported that they are still struggling with sales, and its stock fell slightly. Sears, Kohl’s and JCPenney are other retailers that have fallen this year, and despite the fact that Walmart is doing better than many other companies, it still does not equate to Amazon.
It is known that Amazon increased over 15 per cent this year and is worth more than $410 billion now while Walmart’s market value is just $220 billion. Amazon is further trying to strengthen its position in the physical retail world. For that they have opened more storehouses on campuses and big cities.
The good news for us is that the battle between Amazon and Walmart has lowered the price of some of their services. For example, Amazon reduced free shipping minimum for non-Prime members to $35, while their free shipping threshold was increased to $49 from $35 almost a year ago. Amazon didn’t tell exactly date when the minimum was lowered, but did mentioned that changes happened “recently.” It is good to know that orders which contain at least $25 of eligible books also ship free. Moreover, this year items will be delivered five to eight days after they are available to ship.
Also, the company has given many benefits to Amazon Prime users — the membership costs $10.99 a month or $99 a year, but for that you can get unlimited free two days shipping on many items. It goes along with other benefits like movies, music and streaming TV.
And it is not even the end… While more people start to buy online, Amazon and Walmart are trying harder for customers. Walmart started offering free two-day shipping without any membership charge (on orders of at least $35), on January 31. Plus, they give free two-day shipping with its $49 a year “Shipping Pass”.