Can Walmart & Amazon dominate without competing ?- Build a tribe?

Whether a ‘for profit’ or a ‘nonprofit’, success can be down to how you differentiate yourself from the others that are also competing for the all-important donor or customer revenue.

"I see something happening with Walmart and Amazon which is very interesting."

Walmart, for many years, faced limited competition. Sam, from humble beginnings in Arkansas, saw an opportunity in consumer retailing and went for it. Other retailers and grocery chains have been unable to match the long-term discipline and sustainable growth modeling that the leadership has executed year on year.

The numbers of this fine company are staggering, they currently employ 1.5 +/- million (yes, million!) with over 5000 stores spread across the breadth and width of the land.

This company has also been on a global acquisition crusade. They have developed a truly international footprint in areas such as China, Africa, South America, Europe, and India.

Sam's vision, together with those that followed are to be truly admired. The sheer management structure and accountability required to run such a ‘tangible’ brick and mortar business is astounding...not to mention the  $450+ billion revenue that is flowing through the income statement.

This business will be admired for many generations to come.

Not so fast Walmart, there is a new kid on the block that has had meteoric growth in the last few years from an ‘ok’ online bookstore to an all-absorbing retailing empire with an insatiable appetite for market share... ‘Amazon'.

It seems that the gloves off and the only two players that are in the ring and dominating the conversation are Amazon and Walmart.

Online retailing is getting a lot of press as being responsible for the demise of many other ‘bricks and mortar’ retailers (maybe a little overstated as far as numbers but that’s another article) and this narrative posturing is sending shock waves through the malls of America.

I am impressed with Walmart. They have been around a long time and have seen contenders come and go. I wouldn't expect them to take this lying down. In recent weeks, the news channels and social media, have been reporting on the activities of the shareholder meetings, reminding us of innovative product pitching sessions with their buyers, discussing grassroots employee strengths and generally emitting a feeling of true family and roundtable leadership.

However, this is all fine but where does the differentiation need to take place with these two and set an example reminder to others that will face this same scenario?

Amazon and Walmart cannot compete head to head on like for like branded items where the consumer today has access to near immediate price comparisons. If they do their only way to survive is as battered and bruised competitors or enter into some sort of duopoly to control pricing (which will not happen as it is probably illegal).

I can vision both of these retailers reaching out to their suppliers to create exclusively and uniquely packaged skews that cannot be compared like for like. The responsibility of individual product branding and ‘tribe’ engagement will be firmly on the shoulders of the suppliers.

Staple words that we grew up with such as ‘milk’ and ‘bread’ will become a thing of the past. After all, it makes it too easy for consumers to price compare on these two commodities. There will be new names with new benefits associated with new products.

Differentiation, in this rapidly changing marketplace, will play even a bigger part in the success of many businesses.

No longer is it sufficient for a gas station to offer bread and milk. Wawa and RaceTrac have created differentiations that are crushing the competition.

In the coming months, we will see this epic battle of Amazon and Walmart play out and it will be sufficient for an MBA thesis in market competition.

While Amazon is all bells and whistles at the moment there is still one word of caution...the balance sheet of the stock market seems to be based on a narrative, not on earnings in the here and now.  Uber valuation and others are driven by one of the other ‘intangible’ drivers and that of future growth. This is all well and good but when the narrative of future growth through untapped opportunity, takes knock, so will the value.

The marketplace is going nowhere, population growth in the last 40 years has almost doubled to 7.2 billion.

Whether a non-profit or for profit, how are you differentiating yourself ?

Guy Breading

?“Confidential turnaround and revenue solutions for all organizations”