Clicks vs. bricks (review of Jason Del Rey's Winner Sells All)

From Bentonville, Arkansas and weighing in with revenues of $661 billion, it’s the 61-year-old champion of everyday low prices with more than 10,500 brick and mortar stores, Walmart.

And from Seattle, Washington with $514 billion in revenue, it’s the 29-year-old online retailer and e-commerce champion of one-click convenience, Amazon.

In this clash of the retail titans, we can’t afford to have a winner.

“A world where one winner sells all is a world where everyone loses,” says veteran business journalist Jason Del Rey. The world’s largest retailers are locked in what Del Rey calls “no-holds-barred power struggle for dominance” with billions of dollars and millions of jobs at stake.

“In an ideal world, the continued competition between these two rivals will pressure both to evolve in ways that provide more societal good than harm – whether in the form of lower prices for cash-strapped consumers, convenience for those whose busy lives or physical limitations require it, more humane working conditions for everyday people, or maybe, someday, positive changes to health care if we’re lucky.”

Yet, as Del Rey acknowledges in his new book Winner Sells All, we’re not living in an ideal world. Both companies have had their turn in the barrel as Public Enemy Number One. “Admittedly, that’s a lot of hope and optimism laid before two mega-corporations whose actions haven’t always inspired those feelings. So outside forces – whether they be regulators, new startups, or labor groups – will still be necessary to apply pressure where the rivalry alone is not producing the best outcomes, and not only for citizens in their lives as consumers but as workers and community members too.”

It’s been a tougher fight for Walmart, judging by what Del Rey reports in his book. He conducted more than than 150 on and off-the-record interviews with current and former executives at both companies. Walmart was slow to see Amazon as an existential threat. And the cost-conscious leaders running Walmart’s brick and mortar stores had issues with the e-commerce executives who were playing the long game by putting growth ahead of profits.

“By around 2005, Amazon leaders believed they had matched or beaten Walmart on both product prices and on merchandise selection, but still potentially trailed Walmart in convenience because of Walmart’s sprawling network of stores and how those physical outposts could be used as pickup locations or delivery points for speedy online orders,” says Del Rey. “But over time, Amazon executives watched in disbelief as Walmart failed to focus on one of its key advantages.”

Walmart’s since snapped out of its digital slumber. The construction cranes in downtown Bentonville remind Del Rey of what Seattle went through when Amazon turned a neighbourhood of warehouses and shipyards into its headquarters. To pull even with Amazon in the war for top tech talent, Walmart’s building a campus on 350 acres that’ll include a Marriott hotel, corporate health and wellness centre and a childcare centre.

Both companies are still trying to figure out how to make money delivering groceries to our front doors. And health care, delivered in-store, online and in our homes, is the grand prize. More than 40 per cent of customers surveyed by Walmart said cost was their biggest impediment to getting health care and 80 per cent of U.S. stores are located in medically underserved communities. Delivering lower cost and more convenient health care could prove to be the knock-out punch in this decade-long clash of retail titans.

Could another company like Spotify or Instacart win out over Amazon and Walmart? “By the last quarter of 2022, many of the upstarts that might one day threaten Amazon and Walmart found themselves on shaky ground,” says Del Rey.

And how about TikTok, with its promise to create a new and improved e-commerce experience for its one billion users? “Any large fulfillment network would take many, many years to pull off, even if things went smoothly.”

So for now, this clash of the titans continues with billions of dollars and millions of jobs on the line. Let’s hope they go the distance and push each other to do better.

Jay Robb serves as communications manager for McMaster University’s Faculty of Science, lives in Hamilton and has reviewed business books for the Hamilton Spectator since 1999.