Walmart and Target respond to increased pressure from Amazon

Walmart and Target respond to increased pressure from Amazon. Ever since its foundation in 1994, Amazon has continued to revolutionize the way we shop. Under the watchful eye of CEO Jeff Bezos, the company has diversified into various different sectors in order to keep up with the ever-evolving trends of consumers. From its humble beginnings as an online bookstore, Amazon now provides a marketplace to cater for just about everyone’s needs. From clothing, furniture, food, toys, jewellery and electronics, to name a few, you can almost guarantee Amazon will have what you are looking for. Amazon has continued to dominate the retailer market so much in recent years that in 2015, the New York published it had surpassed Walmart as the most valuable retailer in the United States by market capitalization.

Many attribute this meteoric rise to the leadership of CEO Jeff Bezos. His strategic thinking and decision making have ensured Amazon continues to stay ahead of the curve and dominate in their respective fields. One such move was to diversify into the whole food and grocery markets via their subsidiaries AmazonFresh and AmazonGo, launched in 2017 and 2018 respectively. As a result, Amazon found themselves in direct competition with traditional sellers Walmart and Target, both of whom have been in the business for a combined 150 years. Therefore the strength of Amazon’s challenge is testament to the stewardship of Bezos and his team. Initially many feared for the traditional stores as Amazon continued to go from strength to strength. But other experts, namely investor Kevin O’Leary, believe the recent movements of the two firms have placed them in a strong position to fight back against Amazon.

Out of all Amazon’s competitors in the retail sector, O’Leary believes Walmart and Target are best positioned to challenge Amazon in the coming years. He highlights the personnel and staff they are hiring as well as the strategic directions they are taking as key to their survival against the global giant of Amazon. This was confirmed in March as Walmart announced it would combat AmazonFresh by expanding its online delivery service to 800 stores for 2018.  Furthermore, Walmart announced that its subsidiary jet.com would be opening a fulfilment centre in the Bronx in order to trial its same-day delivery service in New York City. This will be key for Walmart as Amazon already possesses tacit knowledge in the e-commerce sector. O’Leary went on to praise Walmart, stating that these moves into distribution centres will ensure faster delivery times which will cater for large metropolitan areas.

It must be noted that Amazon is in mere infancy when it comes to the wholesale grocery business but its steady growth has raised eyebrows. Bezos has again showed his worth with clever strategic moves in order to further mount pressure on the traditional stores of Walmart and Target. Investors will be paying particular attention to the movements of each company, as the coming years could prove crucial for their success or failure in the ever-evolving consumer retail market. This will certainly be interesting to keep tabs on and watch how it develops over time.

Image credits: Jeramey Lende / Shutterstock.com

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