How Amazon Competes Against Walmart And Every Other Retailer

When you think of Walmart, what comes to mind? Low prices and big selection. Walmart is responsible for just over 10 percent of retail sales in the U.S. Most people think of Walmart as a big retail store, but it also plays the online game very well and its online presence is growing year to year.

When you think of Amazon, what comes to mind? Again, low prices and big selection. Depending what stats you look at, Amazon is responsible for 40% or more of online retail sales in America.

So, when it comes to retail shopping, how does Amazon compete? Low prices and selection are the table stakes to get into this game. Amazon has that, and it came up with a new lure. It’s called convenience.

Amazon is all about convenience — saving time and making life easier for customers. It created a program, Amazon Prime, through which members get merchandise shipped free of charge in two days or less. And now, it is setting up distribution centers throughout major cities that can deliver merchandise to customers in two hours or less.

Amazon also created the Dash button, which is also all about convenience. If you notice you’re running out of detergent, just push the Dash button and within moments you receive a text message or email asking to verify that you want more detergent. Confirm the order and they ship it to you. Talk about convenient!

By the way, as convenient as Amazon is, it still has competition. Nine out of 10 Americans live within 10 miles of a Walmart. Walmart is testing delivery and no doubt will try to compete head-to-head with Amazon, and any other retailer that tries to play the convenience card.

But, Amazon has raised the stakes again. It already offers low prices, big selection and convenience, and now it has another weapon: Being Anticipatory.

My friend and genius (really, he is!), Daniel Burrus, considered one of the world’s leading futurists on global trends and innovation, wrote a fascinating article last year about Amazon’s “Being Anticipatory” strategy. In short, Amazon is able to grow and build market share, while other companies — major companies — are failing. It’s because it can anticipate what customers want.

Some say Amazon has disrupted and/or reinvented the retail industry. Few will argue with that. Here is the way I see it. It offers what its customers want. And, in some cases, the customers didn’t even know they wanted it — mostly because they didn’t realize it could be done. Who would have ever thought that you could push a button adhered to your washing machine and have detergent delivered to you? Who would have imagined the Echo, which can not only play music and tell you the outside temperature, which in itself is pretty cool, but also order a pizza and purchase movie tickets? Amazon figures out what customers want, before they even know they want it. In other words, it is a master of anticipation.

If you think this concept sounds vaguely familiar, you may remember another corporate giant that mastered the art of anticipation, Apple Computer. The late Steve Jobs, Apple’s CEO, said more than 10 years ago, “A lot of times people don’t know what they want until you show it to them.” Was Jobs an innovator? Or was he an anticipator? I think he was a little of both. Actually, a lot of both.

So, back to Amazon. It started as an online bookstore and disrupted the industry. First, its pricing and selection made it competitive. When the notion of convenience was recognized as a major competitive differentiator, it was exploited. Amazon knows how important convenience is to its customers. It could have stopped with Prime two-day shipping, but it didn’t. It is constantly pushing to create even more convenience. How many steps can Amazon eliminate from the time you decide you want to buy something until the merchandise is received? That’s part of its convenience strategy.

Amazon has become the master of being anticipatory. It uses data that comes from millions and millions of customers buying from an inventory of more than 50 million different products (with thousands more being added every day). It spots major trends and specific details of individual customers at the same time. It makes predictions with uncanny success. It is not just a great retailer. It is a master at consumer behavior.

Burrus sums it up best when it comes to one of the biggest differences between Amazon and Walmart — or just about any other retailer. In his article, he states, “Amazon does not compete or imitate its competition. Copying Walmart would merely result in becoming Walmart. Companies in every industry should be following their own risk and taking action by using Hard Trends to shape the future. The time has come to replace competing with initiating and creating; it is that simple.” And, that’s exactly what Amazon does.

Shep Hyken is a customer service and experience expert, keynote speaker and New York Times and Wall Street Journal bestselling author.

This article originally appeared on Forbes. com.