retail news in context, analysis with attitude

MarketWatch writes that "this year was supposed to be a slugfest between the nation’s two biggest retailers, Amazon and Walmart. But even in a pandemic in which Walmart should have had some natural advantages - a brick-and-mortar presence and investments in click-and-collect orders - early signals from spending data suggest that Amazon hit the turbo-boost button and left Walmart in the dust."

An examination of consumer spending data, the story says, tells " a tale of two companies…

"Of the two retailers, Walmart seems like it would best be positioned to capitalize upon the COVID-19 crisis. Start with ubiquity. As recently as 2017, 95% of Americans had shopped at a Walmart or Walmart.com within the past year.

"Add the fact that Walmart had introduced pandemic-friendly options such as the ability for customers to buy online and do curbside pickup at a physical store. For good measure, consider that even in a pandemic and the economic hardship that goes along with it, people still need groceries — and there are a lot more Walmarts than there are Amazon-owned options like Whole Foods.

"For a brief moment, it seems like Walmart is on a good track. Both companies experience a spike around March 8 and March 15 that can be attributed to 'panic shopping' as people stocked up on essentials. Amazon experiences a 30% year-over-year increase, while Walmart rises about 18% year-over-year.

"Then, Walmart sinks back down to minus 5%, while Amazon takes off like a rocket. Amazon achieves as much as a 95% increase in year-over-year spending, and maintains at least a 70% increase in year-over-year spending for 11 of the next 14 weeks. Walmart, meanwhile, shows a comparatively unexceptional 5%-10% increase."

KC's View:

I would argue that these numbers - while just a snapshot of a specific moment - also may reflect the difference between Amazon's and Walmart's approaches to the marketplace.

Amazon's entire value proposition is based on becoming entwined in our lives, making it irresponsible not to turn to it for virtually every need or desire.  (Well, most desires anyway.  But give Amazon time…)

Walmart, on the other hand, has a value proposition based on value - it wants to sell you stuff at the lowest price possible.

There is nothing wrong with either approach, but they are very different … and may, in a time when people are depending on businesses that present themselves as pandemic-related problem-solvers, give one company an advantage over the other.