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TEACHING NOTE

SMU-22-0021TN AMAZON VS WALMART: CLASH OF BUSINESS

MODELS
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BY PROFESSOR NIRMALYA KUMAR AND DR SHEETAL MITTAL

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This teaching note was written by Professor Nirmalya Kumar and Dr Sheetal Mittal at the Singapore Management University.
This teaching note is designed to be used with case: SMU-22-0021, which is an update of the authors’ previous case,
"Amazon and Walmart on Collision Course” (SMU-18-0013). The case was prepared solely to provide material for class
discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors
may have disguised certain names and other identifying information to protect confidentiality.

Copyright © 2022, Singapore Management University Version: 2022-06-30

This Teaching Note is authorized for use only by Dr Raja Roy Choudhury, Other (University not listed) until Apr 2024. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860.
 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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AMAZON VS WALMART: CLASH OF BUSINESS MODELS

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This note serves as a facilitator’s guide to the Amazon Vs Walmart: Clash Of Business Models case
study. After a brief case synopsis, the note describes the learning objectives and key lessons.
Assignment questions are listed and a teaching plan to guide the discussion and answer the questions
is presented.

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Case Synopsis

Set in 2021, this case describes how Amazon and Walmart have been two of the most successful
retailers in history and responsible for changing the rules of the game in the retail industry in the US.
Over the years, the two firms had perfected contrasting business models to enable their dominance
of the respective offline and online retailing. Walmart’s model of low prices and strategic

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partnerships with suppliers had redefined supply chain practices and lowered system costs through
the adoption of information technology. Amazon’s online model of convenience of shopping from
anywhere, anytime comprised a high-quality user-friendly platform with a large product catalogue,
and a widespread and reliable fulfilment infrastructure to deliver the orders quickly to the shopper.

In recent years, the growing customer preference for omni-channel retailing, an integrated experience
that seamlessly comprised digital and physical retail, had compelled the two companies to make
substantive investments in developing capabilities and acquiring resources in what was hitherto the
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other’s domain. This leads to several questions that engage students. With Walmart and Amazon
racing to add online and offline retail respectively, would their distinctive business models morph to
become similar to each other? Or should each focus on its core strength, while offering the other
service (online for Walmart and offline for Amazon) as complementary? Were online and offline
retail more suited to different customers and product categories? And did their respective future
prospects truly justify the dramatic difference in market capitalisation between the two retailers?
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Learning Objectives

The case is appropriate for undergraduate, MBA, and executive courses related to general
management, industry analysis, strategy, operations, retailing, marketing, digital, and ecommerce.
As a result of its cross-disciplinary nature, it can be used as an opening or capstone case for a program.
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The case explores the contemporary issue of the race to develop successful omni-channel business
models, including how traditional retailers should transform for the online challenge and how online
retailers may evolve for an offline presence.

Through discussion of this case, students will be able to gain an understanding of the complexities
involved in online versus offline retail channels and the growing significance of an omni-channel
presence. The students will be able to appreciate the differences between the value proposition of
online versus offline as well as the distinctive capabilities and resources required for each business
model. In addition, students will get an opportunity to explore the potential strategies that each
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retailer is pursuing, and may pursue, in order to adopt an integrated retail model. This should lead to

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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an analysis of the challenges, including financial, faced in the process. The case can also be used to
contrast the product-driven traditional competitive strategy model of Walmart versus the platform

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model adopted by Amazon. Given the ability of the case to generate discussion on a large variety of
subjects, instructors will have their own unique teaching plans in light of the time limitations.

Given the topical nature of the issues and the two famed retailers as the protagonists, the case
generates high interest and involvement in the classroom with students or executives.

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Suggested Lesson Plan

Suggested Seminar Outline

The case is rather adaptable, from a 90-minute session to a half-day class (three and a half hours with

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a 15-minute break). Suggested timelines are as follows:

Activity Instructional Duration

Strategy (min)

Discussion about the growth of e-commerce, and its Class Discussion 10

impact on retailing.
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Discussion on Amazon and Walmart’s value Break-out Groups 30-60
proposition, marketing strategy and respective with Presentations
business models.
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Discussion on the omni-channel challenges each Class Discussion 30-45

retailer faces and the initiatives undertaken to
overcome them.

Comparison of financial and strategic performance of Class Exercise and 10-20

Amazon and Walmart. Discussion
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Wrap-up of Case (discuss strategies discussed, key Lecture 10-60

learnings and epilogue).

90-195
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Student Assignment Questions

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1. How does the marketing strategy (target segment, value proposition, and marketing mix) of
Amazon online and Walmart Supercentres differ in the US market?
2. What accounts for the difference in online penetration among books (about 50% of sales are
online), apparel (more than 25% of sales are online) and groceries (less than 5% of sales are
online) in the US?

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3. What is the value network, and distinctive capabilities underlying each of the two business
models (Amazon online versus Walmart Supercentres)?
4. Evaluate the initiatives taken by Walmart to meet the omni-channel challenge. How should it
evolve in the future?
5. What are the initiatives taken by Amazon to develop an omni-channel presence? What challenges
does it face in the adoption of an integrated model, especially when dealing with groceries and

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apparel?
6. a) How does the value network of Walmart’s “store picking” delivery model differ from that of
Amazon’s “warehouse picking” model? What are the advantages of each?
b) In this race towards building an omni-channel presence, how would you handicap the
chances of success for the two retailers?
7. a) Analyse and compare the financial and strategic performance of Amazon and Walmart over
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the years.
b) Estimate the online sales of Amazon in the US market. What do you think is the profitability
of these sales?
c) Compare employee, asset and inventory productivity of Amazon and Walmart.
8. What are the fundamental business model differences between Amazon and Walmart?
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Case Analysis and Teaching Plan

Answers to Student Assignment Questions

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1. How does the marketing strategy (target segment, value proposition, and marketing mix)
of Amazon online and Walmart Supercentres differ in the US market?

‘Who to Serve’ – Customer Segmentation & Targeting

The instructor may start this section by asking participants who the target segment is for each retailer
– who do they serve? The students may undertake brief research and respond with a difference
between the two retailers based on demographics such as income and age to show that Amazon
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customers in comparison to Walmart’s tend to be younger individuals with higher income levels
(refer to Table 1 for the comparison).

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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While Table 1 does demonstrate some differences (younger, more urban, and higher income for
Amazon relatively), these are not as dramatic as the students believe and will collapse further over

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time. It is important to note that a segmentation based only on demographic measures does not give
an accurate picture as the consumer groups thus obtained do not exclusively shop at either Walmart
or Amazon. According to the case (page 1), in 2016, 95% of all US consumers had shopped at a
Walmart store, while 42% had shopped at Amazon.1 This indicates that there is a large overlap
between the customers of the two retailers with at least 37-42% of the customers shopping at both
channels, implying that these customers tend to choose one channel over the other according to their

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specific needs or benefits being sought at the time of purchase – which would include factors such
as:

• Amazon – greater ability to access the Internet (to buy online though almost all of US consumers
now has this)
• Walmart – more mobility (access to a car in order to visit the physical store)

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• Amazon – more time constrained
• Walmart – cannot wait for delivery if non-digital products
• Amazon – more convenience-oriented than price (as pay for delivery even if prices are low)
• Walmart – less tech savvy and trusting of the digital world; need to see, touch and feel (and
products for which this is more important, like groceries)
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Table 1: Demographic Segmentation

Amazon Walmart Supercentres

Income level About 11% higher income level; Relatively lower income levels –
US$84,449.2 average income of US$76,313.3
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Age profile College-educated married woman, split Married white woman between 55 and
across two age brackets: 35 to 44 and 64 years old.5
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55 to 64 years.

Thus, in order to accurately identify the perceived value of the two retailers, a “needs-based”
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segmentation approach should be undertaken.

For a marketing class, the instructor in the US may ask for a show of hands first on how many have
shopped at Amazon, and then at Walmart. Nearly the entire class will raise their hands for both. This
can help the instructor make the point that demographics cannot be as different as we think. Students
often see Walmart as reaching the poorer sections of US with Amazon having more high-income
consumers. In general, demographic-based segmentation has limitations and one should examine
needs-based segmentation – an important point for the students.
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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To push the class further, the instructor may ask for the segmentation in practice at each company by
querying: what do Walmart and Amazon know about their customers?

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Amazon’s access to data on its customers is exhaustive. It can track shoppers from their social media
streams, online searches and past behaviour on its website, and collate the data from all three to get
a comprehensive and rich picture of each of its customers. Equipped with such rich information,
Amazon has the capability to achieve the ultimate level of micro-segmentation and customise its web
page for each and every customer, recommending products most likely to be bought according to the

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individual’s characteristics, needs and behaviour in the past.

On the other hand, Walmart’s access to customer data is limited to store-level analysis of the sales
pattern through checkout receipts. The focus of Walmart is on identifying what products are needed
to be stocked in a specific store based on the neighbourhood in which the store is located, which in
turn influences the sales pattern at the store. Thus, a store in one neighbourhood carries a product
assortment which could be quite different from a store located in another neighbourhood.

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The above discussion establishes that while Walmart customises its store based on the needs of the
people who live in that locality, Amazon customises its webpages based on the needs of the individual
customer who checks in. Both companies are IT pioneers and lead in the adoption of using data for
managing their business, but with different capabilities.

It may be re-emphasised here that segmentation is not only about differentiating customers into
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different groups, but also about identifying the different benefits customers seek. While an Amazon
customer may be quite different to a Walmart one on many counts, it is yet important to acknowledge
that there is an overlap which is growing over time. The reason that people are increasingly using
both channels despite the channels offering very different experiences is because they have different
needs in different situations. Thus, it is important to identify and compare the value propositions
offered by the two retailers.
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‘What to Offer’ — Value Proposition

The core value offered by Walmart Supercentres to its customers is financial benefits through bulk
shopping, also called basket economics, in which a customer buys a basket worth of goods and that
leads to significant savings on the overall cost. It also has a time-saving component to the value it
offers because a customer can shop for a wide range of products under one roof. On the other hand,
the primary focus of Amazon is convenience (saving time and hassle) for its customers. It may also
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contribute towards some cost savings on account of no travel required.

To further highlight the differences between the values proposition of the two retailers, the instructor
may ask the students to discuss (in class or in groups) and list the different value elements that a
shopper seeks during the shopping process, and then rate Amazon and Walmart on each of those
parameters. Some board play would lend itself well in facilitating a discussion around this. On the
whiteboard, the instructor may pen down the various parameters shared by the students under the
broad headings of some generic service factors such as Time, Price, Product Assortment, and
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Customer Service (as shown in Figure 1); and then draw the value curve for each retailer.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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The ensuing discussion may be as follows:

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The time value of a retail point can be considered to comprise: waiting time (how long it takes to get
the product after ordering), travel time, and transaction time (the time taken to find the product,
select/pick it up, and checkout). Students may successfully argue that at Walmart, there is no waiting
time while it is considerable in the case of Amazon (depending upon the customer location and the
product category). The travel time to and from the retail point is zero in the case of the online retailer
while significant in the case of Walmart Supercentres that are typically located at the city outskirts

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in the US (unlike Walmart neighbourhood stores which are closer to residential areas). And the
transaction time (especially after the one-click innovation) is much lower at Amazon compared to
Walmart.

The product assortment offered by the retailer is usually measured by the extent of breadth (number
of product categories), depth (number of SKUs within a category) and brand choice (number of
brands available) available. Despite Walmart offering a large and wide product selection, Amazon

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supersedes it on all counts with its unlimited online capacity to stock more. The students get this
immediately, but the instructor should push here for greater insight into the assortment. There are
limitations in Amazon with respect to two major categories: apparel and fresh food. The exact size
of a piece of clothing and how it will look when worn as well as the perfect ripeness of an apple
according to one’s preference is difficult to ascertain on Amazon. Beyond the logistic challenges
(delivering fresh food and returns for apparel), this is why Amazon struggles to get these two
categories right.
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The price parameter includes product price, cost of delivery (the one which is charged to the shoppers)
and cost of travel. Both retailers strive to offer the lowest prices possible to the customers; however,
Amazon, on account of its business model, cannot match Walmart in its pricing. And while there is
no cost of delivery at Walmart, there is no travel cost involved with Amazon.
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Related to the above is lot size; the principle at Walmart is that the higher the quantity, the greater
the cost savings are accrued. Unless it is a high-priced item, one will not drive to Walmart for a single
item except when it is needed immediately (convenience stores serve that need for immediate access
to everyday necessities). Similarly, for a low-priced single item, Amazon delivery charges may be
high. But this is where Amazon Prime makes a big difference for the customer.

Again, the buying situation (one item versus many, expensive basket versus cheap) and the location
of the customer vis-à-vis Walmart have an impact on these costs.
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The customer service aspect is a sum of many factors such as assistance by a salesperson, ease of
return, demonstrative capability (ability to touch, feel and try), access to personal recommendations
and extent of information available about the product. While the brick-and-mortar model of Walmart
enables it to provide personal assistance, an easier return process and a tangible product experience,
the online medium enables Amazon to provide not only reviews from actual users, but also a two-
way platform to address potential concerns along with access to detailed information about the
product.
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Figure 1: Value Curve of Amazon versus Walmart

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Value Attributes Low Value High Value
Time Waiting Time A W
Travel Time W A
Transaction Time W A

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Product Breadth W A
Assortment
Depth W A
Brand choice W A
Price Product price A W
Delivery cost A W

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Travel cost W A
Service Assistance A W
Ease of return A W
Demonstration A W
Recommendation W A
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Information W A
A: Amazon online; W: Walmart Supercentres

From Figure 1, several important points can be derived:

• The value proposition offered by the two retailers varies across different elements, with each
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offering higher value on certain elements while lower on others. It is important to note that on
most factors, the two brands are at crossroads with each other, thus necessitating the customers
to make trade-offs when choosing one over the other. The two retailers aim to overcome the
compromise shoppers have to make when they choose their channel versus the other.

• The value curve can also be used to revisit the segmentation question. The difference between
the two propositions is not that they target different demographic segments (which will even be
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less so in future), but rather different “need” segments. When the consumer prefers the value
curve of offline retail, then the default is Walmart. And, when the consumer prefers the online
proposition, Amazon has become the default. The USP (unique selling proposition) of the two
retailers differ. Amazon is trying to improve its default status by Prime, as after the consumer
pays the annual fee, there is no reason to look elsewhere on the web and the time of delivery has
been reduced so that unless there is an immediate need, it is good enough.

• While students are generally excited by Amazon relative to Walmart, they should consider:
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Walmart sales are several times that of Amazon so it cannot be that it is a less attractive
proposition than Amazon offers, as customers are voting with their dollars; more of the US

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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population shopped with Walmart than Amazon in 2017; Walmart is very profitable, while
Amazon at best breaks even (even that is unlikely) on its retail sales (ignoring profits from

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services).

• Finally, the ‘A-ha!’ moment for the students is also that if asked to draw a value curve, their
graph looks a lot more limited than the one above. Different distribution channels offer different
value propositions – to say one is generally better than the other is misguided (it is a situational

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preference as a convenience store is to a supermarket).

‘How to Deliver’ – Marketing Mix

To deliver different value propositions to the valued customer, the two retailers vary in their
marketing mix (refer to Table 2).

Table 2: Marketing Mix of Amazon versus Walmart

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Amazon Walmart
Product Endless aisle; includes long tail Relatively limited assortment; no long
products; and limited scope for tail products; and easy-to-sell
perishables perishables
Price Small premium over Walmart; Price leadership; everyday low pricing
homogenous pricing (EDLP), flexibility in matching local
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competitors
Promotion Customised to each shopper’s Mass advertising; promotions driven by
webpage; promotions driven by supplier push but relatively limited as
customer pull EDLP strategy
Place Limited by Internet accessibility Limited by the number of stores
and delivery services
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Product: Walmart has to stock relatively fast-selling items to ensure a quick inventory turnover. If
the product stays on the shelf for longer than optimal, it is hard to justify it occupying the limited
space. But Amazon can easily have products with a long tail (those which take a long time to move
from the shelf), as it only needs to source the items from a third party.

In terms of product range, while Amazon can have unlimited SKUs across different product
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categories, it faces a problem when dealing with perishables such as groceries as these have to be
delivered within a stipulated time under conducive conditions, and in apparel because of a high
percentage of returns on online purchases (30%). However, Walmart can handle both perishables
(estimated to be over 50% of all grocery sales)6 and apparel (returns only at 9%)7 quite well. While
initially Bezos kept Amazon away from these two categories, in his 2013 book, The Everything
Store: Jeff Bezos and the Age of Amazon, Bloomberg Businessweek writer Brad Stone
quotes Bezos as frequently saying, “In order to be a two-hundred-billion-dollar company, we've got
to learn how to sell clothes and food.”
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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The instructor may point out that product categories that have high software content (such as ebooks,
hotel bookings, tickets for travel or entertainment, computer software, etc.) lend themselves easily to

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online delivery mechanisms since there are no shipping and delivery costs. But the products with a
lot of hardware (like apparel or groceries) are more geared towards offline retailing. Even within
apparel, online is relatively more optimal for staples or standard products like t-shirts, and socks, and
when size is not an issue or for replacement purchases. Similarly, in food for which standardisation
exists, like milk and butter, online has an easier time than with fruits and vegetables.

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Price: Walmart offers the lowest prices (about 15% lower than other retailers) if time and travel costs
are not considered. Furthermore, it practises a price adjustment strategy whereby it keeps its prices
variable across different stores based on the needs of the local consumers and what they would be
willing to pay. For example, its ‘everyday low prices’ initiative offers a product at different discount
prices based on the time and demand of the hour. Amazon prices are low and competitive but higher
than that of Walmart Supercentres. Moreover, there is an additional cost of delivery. In a comparison
of the total cost of 50 identical items across the two retailers, Amazon was found to be 10.37% more

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expensive.8

Amazon is also unable to practice differential pricing for different customers despite having the data
to determine the relative price sensitivity of its customers (its attempt to do so in the past was found
to be unacceptable by shoppers). This could be on account of the online medium being an open and
transparent channel, accessible to all at any point of time. However, the instructor may point out that
certain industries like airlines successfully offer different price buckets for the same category of seats
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depending on the time of booking.

Promotions: Walmart uses both mass advertising and in-store promotions, spending about US$3.9
billion in 2021, less than 1% of its revenue. The in-store promotions are based on the offers provided
by its suppliers.9
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In contrast, Amazon spends much higher on marketing with its 2021 spending at US$32.6 billion
(US$10.4 billion in the US), more than 6% of its annual revenue.10 However it mainly uses web-
based advertising (television commercials are used in the US only) through search engine marketing,
and recommendations based on collaborative filtering. Its big data analytics show the conditional
probability of a shopper buying product B if he or she has bought product A. When a shopper comes
to the landing webpage of a specific product, the next most likely product that is bought by other
shoppers is advertised on the webpage, along with its reviews. The instructor may thus highlight that
while promotions at Walmart are driven by supplier push, promotions at Amazon are customer pull-
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driven.

Place: Walmart is limited in its reach by the number of its stores, while Amazon by Internet
availability and the ability to deliver certain product categories efficiently. For example, the
constraints involved in delivering groceries escalate the cost of delivery, making it an unviable option
in most places. However, the instructor may point out that in cities which have high population
density, the grocery online model may be able to approach break even. In such markets, there tends
to be a large number of orders from small geographical pockets that enables optimal bundling of the
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orders for delivery. It may also be suggested that a higher proportion of working women also makes
it a place more suitable for online grocery shopping as they are usually hard-pressed for time.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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2. What accounts for the differences in online penetration among books (about 50% of sales
are online), apparel (more than 35% of sales are online) and groceries (less than 5% of sales

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are online) in the US?

Books: Online retail has been found to be very powerful relative to in-store retailing primarily
because of the following factors:

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The long tail of product selection possible online is impossible offline.
• While the usual quantity purchased may be a single copy for a single title, the retailer needs to
stock a wide range of topics for customers to choose from.
• Product standardisation in the category allows books to be purchased without the need to
physically check out the products.
• The online medium allows for a lot more quality and real-time information via the latest reviews

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and recommendations, sample pages, author biographies, sales rankings, etc.
• Easy to deliver as there is usually no urgency to receive the item, and with e-books, the delivery
can even be immediate and without any hassle.
• As books are not perishable products, the delivery can be left unattended.
• Returns are usually not accepted by the seller or expected by consumers.
•
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Online prices are usually cheaper than in-store pricing.

Apparel: Online retail offers few advantages but mostly for staples rather than fashion items.

• Limited product standardisation and frequent introductions of new designs in fashion apparel
warrant physical trials. However, considerable or even perfect product standardisation for staples,
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especially for repeat buyers, encourages online buying.

• Online retail provides limited information, as the exact colour, fit, fabric, style and so on can
only be determined by physical trial.
• While there may be no urgency to receive a new outfit, the excitement of trying on a new outfit
immediately (instant gratification) is still substantial.
• Easy to deliver as the package can be left unattended.
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• Returns are high especially for fashion items compared to staples. No matter how easy the retailer
makes returns, it is still an extra process for the consumer, and an extra cost for the retailer.
• Prices are relatively similar across channels.

Groceries: Online retail struggles to match the advantages offered by in-store retail.

• Product standardisation is limited for most groceries, and even impossible for some categories.
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• Quality is subjective and can only be ascertained upon examination, like the ripeness of a pear.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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If there is a missing item in the basket delivered, then the customer may be stranded as the entire
ingredients needed to make a meal may be incomplete.

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• Besides quality, even quantity is difficult to assess online, such as how many onions are there in
a kilogram.
• Not much advantage in convenience as delivery cannot be left unattended so the consumer needs
to be home at the scheduled delivery time or travel to pick the purchase up at the store.

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• Returns are generally impossible or at least difficult.
• Prices are higher online especially after considering delivery costs relative to basket size.

The instructor may refer to Appendix 2 for the board plan exhibit for the above discussion.

3. What is the value network, and distinctive capabilities underlying each of the two business

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models (Amazon online versus Walmart Supercentres)?

The business models pursued by Amazon and Walmart, each optimised for a unique set of the value
chain, have effectively led the two companies to market leader positions in their respective domains.
However, it is important to note that the two retailers have developed a distinct value network and
capabilities that were optimised to their respective online and offline channels (refer to Table 3).
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Table 3: Value Network and Capabilities of Amazon versus Walmart

Capabilities Amazon Walmart

Assets Servers Stores

Knowledge-intensive — customer Capital intensive – real estate
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data (stores and distribution centres

[DCs])
Learning-oriented – continuous Learning-oriented – continuous
improvement improvement
Assortment by customer Assortment by store

Tracks customer data at an Tracks store-level sales to enable:

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Process individual level to enable: • assortment planning by store

• customisation of webpage • with Retail Link to suppliers
• recommendations via and DCs for shelf space
collaborative filtering to optimisation via minimising
maximise cross-selling stock outs, optimise costs, and
maximize stock turns
Tracks sales funnel to optimise Tracks neighbourhood data and
minimal dropouts in the purchase weather data to:
process • optimise store locations
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• customise assortment by store

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Low margins except for digital Low margins, cost and price
products and third-party services leadership focus

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People Hire smart people focussed on Hire ordinary people focussed on
innovation and technology and costs and continuous small
large logistics staff working with improvements
robotics
Logistics Warehouses linked to third-party DCs with trucks that connect stores

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suppliers and delivery companies and pick up from suppliers for
backhaul
Set up for individual items picking Set up for bulk picking and
and last-mile delivery delivery to stores
Suppliers Dealing with millions of suppliers Dealing with thousands of
suppliers
Power over suppliers in select Power over suppliers, pioneered

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categories long-term partnerships
Considered as a lead customer to Considered as a lead customer to
help learn about the customers and bring efficiencies
the interface on the internet

While both the companies can be hailed as learning organisations 11 that continue to transform
themselves to remain competitive in the technology-led dynamic retail environment, the similarity
in their business models ends there. Amazon’s key asset is its access to vast, rich and real-time
op
consumer knowledge – hence a highly attractive platform for all manufacturers and service providers.
Walmart on the other hand has created its dominance in the retail business through its vast real estate
holdings that extend beyond just its own stores. Apart from the revenue it generates through the sales
at its stores, Walmart also leases out the space in the vicinity of its stores, leveraging the attractiveness
of the massive footprint it draws to other businesses. Walmart’s supply chain management has been
hailed as the classic classroom model taught in business schools for over two decades.
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Both companies have invested in state-of-the-art technology and networks to optimise their
respective selling, distribution and supply chain management processes. For example, Amazon
pioneered the item-item collaborative filtering technique whereby it is able to assess the relationship
between different items based on their appearing together in the same shopping cart or user history.12
This enables the retailer to accordingly customise its recommendations (of other products) to a
shopper based on the item they are showing interest in. Walmart uses its large satellite network and
No

its proprietary Intranet, RetailLink to instantaneously transfer data among headquarters, distribution
centres, suppliers and stores. 13 The automated process allows the company to receive feedback
quickly, develop predictive purchasing and distribution models, and create just-in-time ordering.14

Amazon ensures that its people are smart, inventive and skilled in developing innovative techniques
to increase its digital reach, simplify the shopping process and further customise the online
experience. Its people strategy is geared towards honing the technical skills that would help the
company improve its scale, degree of automation and efficiency in its processes. On the other hand,
at Walmart, people are trained to improve productivity of its distribution network and drive the
Do

operational costs to the lowest possible.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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The IT system at Amazon enables the retailer to understand what customers are buying at an

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individual level; track their purchasing and browsing history; integrate the data with similar
purchases by other customers; and customise the recommendations and the webpage of each potential
customer for optimised cross-selling. On the other hand, the IT system at Walmart enables the
company to keep the right assortment and quantity of stock at the store level; prevent situations of
stock outs or a slow-moving inventory by tracking the specific store’s sales patterns and movement
of stock over time, and of other stores in similar locations. Knowledge of what SKUs are fast moving

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and which ones appear together in the checkout receipts of a store enables stores to merchandise
effectively, encourages cross-selling and provides customers’ convenience during browsing and
selection.

The logistics system at Amazon comprises centralised warehouses for products that are fast-moving,
and third-party suppliers for the picking and shipping of the slower-moving goods. The warehouses
are designed to facilitate individual item picking and delivery, enabling Amazon to sell small

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quantities to a large number of customers. Walmart on the other hand has regional warehouses that
deliver the desired stocks to the stores located in the area. The warehouses are set up for efficient
mechanised bulk picking and delivery, enabling the retailer to optimally supply large quantities to a
small number of locations. Furthermore, the state-of-the-art technology equips the retailer to chart
out efficient transportation routes which are in line with the forecasted demand.

It is important to point out here that while both retailers have highly sophisticated logistics and IT
op
systems, their focus is different. At Walmart, the goal is to optimise the logistics at a store level – to
get the right product at the right store based on the neighbourhood the store is located in. At Amazon,
it is to optimise at the customer level – to recommend the right product based on the Big Data it
collates so as to get the specific customer to buy the maximum possible.

Both Amazon and Walmart have tremendous power over their suppliers, putting them under high
tC

pressure to keep the prices as low as possible. With both retailers together controlling more than
US$650 billion worth of sales, suppliers have little bargaining power in the equation. However,
between the two, Amazon is considered to have an even higher degree of control as it deals with
millions of suppliers in addition to third-party sellers and faces no inventory carrying costs or the
pressure of slow-moving items (no cost of adding items to its website). On the other hand, Walmart,
after having negotiated a deal with certain suppliers, is then committed to them (albeit temporarily)
once their goods are stocked at its stores. Then, it is in the interest of both the retailer and the suppliers
that the stock moves fast to minimise the inventory carrying costs and make shelf space available for
No

new items.15 To this end, Walmart’s supply chain initiative — Vendor Managed Inventory (VMI)
— has been highly effective in making the suppliers responsible for managing their products in its
warehouses.16
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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4. Evaluate the initiatives taken by Walmart to meet the omni-channel challenge. How should
it evolve in the future?

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It is clear that Walmart and Amazon stand on opposite poles, with each having something that the
other needs to become a comprehensive retail solution. Students may discuss in groups Walmart’s
effort towards offering an integrated (offline and online) experience to enhance its value proposition.

The instructor may categorise Walmart’s multi-tiered retail initiatives under three broad heads:

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reallocate capital, improve the in-store experience, and improve the online experience.

Reallocate Capital

The company has significantly altered the strategic composition of its capital expenditure to
accommodate its adoption of a hybrid model. Its capital spending of US$10.2 billion in 2020
allocates considerably more capital to remodels, e-commerce, technology and logistics, while

yo
decreasing the spend on new stores and clubs in comparison to what it spent over 2013-2015.17
To better accommodate the omni-channel approach, the retailer is redirecting its resources by slowing
down its store expansion, remodelling existing ones (many of its SAM’S clubs have been converted
into warehouses), and investing in building and improving its website. Furthermore, it has invested
in strategic acquisitions of brands, e-commerce retailers, digital talent and logistics to help develop
new assets in line with digital retailing. For example, it acquired Jet.com in 2016 (a competitor to
Amazon that strives to provide the lowest online prices to its customers – a digital competence that
op
Walmart lacked considerably); Parcel (a delivery company); Flipkart in India in 2018, and many
premium online retail brands, such as Bonobos. It is also spending on acquiring technical expertise
to help improve its operations across different aspects such as its mobile shopping platform, search
engine capabilities and development of its database ‘Walmart labs’ into a global scale platform.

Improve the In-store Experience

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Walmart recognises that to gain a sustainable competitive advantage over Amazon, it needs to pursue
a fulfilment model that leverages its massive physical footprint and in-store inventory; and to that
end it has renewed its focus on revamping its brick-and-mortar stores. These measures include:

Improved physical environment: Walmart has been making significant improvements to its stores
to make shopping quicker and more convenient. These include physical alterations such as
broadening the aisles, making shelves more accessible, improving the visibility of the signage,
No

widening the product selection, merchandising relevant categories alongside, and introducing more
fresh and organic products to further strengthen its grocery business. At many of its stores, its
decision to move to daytime stocking is helping in tracking inventory better, and replenishing the
products as they are selling out. It is also increasing the number of store associates present, and hence
available for extending assistance, while the customer is shopping.

Enhanced technology: Walmart’s mobile app aids customers to navigate the large store by helping
them locate products, access up-to-date information about them, avail services such as the revamped
Do

scan-and-go feature, and Walmart Pay. Its expanded features alleviate a key pain point of pharmacy
and money service customers by helping them save much time by allowing them to key in their

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information on the app before coming to the store. Investment in the latest technologies has enabled
the retailer to introduce interactive screens featuring items available (including online), automated

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checkout process, shelf stocking and customer service.

Enhanced customer service: Focus towards its employees’ education, training and better wages (it
spent an incremental US$1.6 billion in 2021 on extra pay and benefits) has significantly enhanced
the customer service levels at Walmart with higher than ever before scores on its stores, offering a
clean, friendly and fast shopping environment.18

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Improve the Online Experience

Click and deliver service

Till 2020, Walmart pursued an e-commerce strategy across two sites — Walmart.com and Jet.com
— that shared back office and logistics, and offered combined merchandise functions to the suppliers.
In 2020, it decided to discontinue using the Jet.com brand as the Walmart brand had more traction.

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It has also undertaken many more initiatives towards a greater online performance. Some of these
include:

• Increasing the online inventory: The ability to sell on two platforms helped Walmart in attracting
more online merchants, and hence expand its marketplace. Since 2016, the retailer has increased
its inventory many fold, offering more than 170 million products with its marketplace comprising
over 100,000 online sellers.
op
• Improving the marketplace options: Focus on developing a vertical on fashion (that Amazon
lacks) by acquiring e-retailers such as Shoebuy (shoes), Modcloth (womenswear), Moosejaw
(outdoor apparel) and Bonobos (menswear) to their marketplace. In addition, it has launched a
mobile app providing express return services at its stores to efficiently manage the higher rate of
returns on online purchased items, especially apparel.
tC

• Targeting new customer segments online: Moving beyond its core segment of price-sensitive
customers, Walmart is now also focusing on high-income urban consumer groups such as
millennials by offering them smaller product ranges but high-saving options. The objective is to
provide superior user experience and product quality (since it may be difficult to compete with
Amazon on quantity currently) while offering the lowest prices possible. In addition to the
acquisitions of premium brands, partnership with luxury department stores (e.g., Lord and Taylor)
to display their merchandise on its website, and rollout of its own private label brand ‘Uniquely
J’ are some of the steps taken by the retailer in this direction.
No

• Improving delivery and returns options: Walmart is strengthening its ability to deliver cost
effectively by incentivising a customer to place large orders, and also by delivering from the
store which is nearest to the customer. It is further offering features such as free two-day shipping
for orders greater than US$35 and providing the last-mile connectivity by using its associates to
deliver online orders on their way home from the store. Walmart+, a membership-based program
for US consumers includes unlimited free shipping on eligible items with no minimum order
requirement, unlimited delivery from stores, fuel discounts, and mobile scan-and-go option.
Walmart’s mobile express returns service enables a simplified return process whereby customers
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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can initiate the return process on the app by selecting the online transaction and finishing it at
the physical store using the express lanes.

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Click and collect service
This is an omni-channel strategy followed by Walmart that:

• Leverages its existing infrastructure: Uses its brick-and-mortar locations (more than 4,700 stores

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in the US) for pickup while providing customers with the convenience of online shopping. The
pickup towers in front of the stores allow for a fast hassle-free collection by the customers.
• Enhances cross-selling opportunities by bringing customers to the stores.
• Offers lower prices as there are no delivery and shipping costs. Its series of initiatives over the
years such as pick up discount, pick-up-today and ship-to-store incentivise customers to collect
their orders from the stores.

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It should be emphasised here that in a distribution channel, the more work the customer does
(travelling to the store, picking or/and collecting the order), the lower the cost of distribution, and
hence the lower the prices for the customers. An example of the IKEA model can also be shared here.

In a delivery model, there is an additional cost of picking as someone has to go around the store and
pick the items accurately as ordered online, and pack them in a grocery basket for the customer to
collect. In the offline channel, the customer does this work (picking, bagging and carrying), but now
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Walmart has to appoint someone to do the same. Furthermore, there are additional costs of delivery
in the click-and-deliver feature. Hence, the instructor may emphasise that the profitability of the store
from online orders would always be lower compared to when the customer buys at the physical store
itself. This initially impacted Walmart’s ability to offer the same low prices online as in its stores. In
fact, its online prices were found to be at a premium to not only its in-store prices but also on Amazon
(3% in 2016, 0.3% in 2017).19
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Another fallout is its ability to cross-sell. Under the click-and-collect model, only if the customer
comes inside the store, would there be opportunities to cross-sell. But most shoppers prefer to collect
their orders from the front of the store or the pick up towers without entering the store.

Furthermore, neither Walmart’s distribution centres nor its stores are designed for optimal picking.
While its warehouses and distribution centres are set up with state-of-the-art technology, it is only
No

for bulk movement of goods to the stores, and not suitable for deliveries to individual customers. So,
while the system can handle the movement of say 150 toothbrushes in one go, it cannot handle the
order of just one toothbrush. Thus, Walmart can only deliver from its stores. However, the stores are
designed for merchandising and display of a wide range of products in order to maximise in-store
sales. Typically, pickers are incentivised by the number of items they can pick up accurately in a
specific amount of time. But the presence of regular shoppers at a physical store would hinder the
ability of its staff to pick quickly. While the number of online orders is low, it is still a manageable
issue. However, given the increase in the scale of its online operations (for delivery or collection),
this would be a significant problem for Walmart going forward.
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Another point of concern may be the potential cannibalisation of its in-store sales despite the
additional sales through online ordering. It can be argued that some of the existing stores’ sales per

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square foot of Walmart are now being taken up by less profitable online orders. Thus, the stores are
losing some profitable orders and gaining less profitable ones instead.

5. What are the initiatives taken by Amazon to develop an omni-channel presence? What
challenges does it face in the adoption of an integrated model, especially dealing with groceries

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and apparel?

The instructor may begin the discussion by re-emphasising that the key driver of Amazon’s success
is its commitment towards sustaining a high rate of growth, which has helped it win investor
confidence and generate generous funding despite low profitability. While Amazon is doing
considerably well in its online model, it recognises that going forward the focus of its growth strategy
should be to more deeply penetrate the grocery and apparel product categories that boasted of retail

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sales of US$1.1 trillion and US$317 billion respectively in 2021. The complexity involved in
delivering groceries, and in handling the high percentage of returns in the case of apparel has resulted
in the two categories still skewed heavily towards offline retail.

In the case of grocery, the last mile connectivity is very crucial due to the nature of the products,
which warrant three different types of distribution chains: Ambient (e.g., soaps and shampoos),
Chilled (e.g., fruits and vegetables); and Frozen (e.g., meats and ice-creams). An average grocery
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order will have items from all three types, and hence, unlike a durable product such as a book, these
groceries cannot be left outside if no one is at home to receive them at the time of delivery. While
the ambient items are durable, the chilled and frozen items are perishable, and can spoil easily if not
kept in the right conditions. In addition, the delivery process would entail higher costs as the truck
that carries groceries would need to have suitable compartments for each type. It would also need
more time as the delivery person would have to take a bag out of each of the compartments – bag A,
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bag B and bag C, and ensure that all three belong to the same order before delivery.

The economics of delivering grocery orders is further adversely impacted by them being relatively
low in value but high in volume and weight – the operating margins are only 3% or thereabouts. In
comparison, in case of other product categories, such as electronics, the price of an item (e.g., a
smartphone) is significantly higher than the cost of delivery. In addition, it is a smaller and lighter
package to deliver. Thus, the challenge for Amazon is to make the grocery delivery proposition a
profitable one for the company.
No

In the case of apparel, the delivery cost is not an issue because the items are relatively higher in value
than groceries, enjoy high margins, weigh much lesser and do not have a sell-by date. But the big
challenge in the product category is the high rate of returns when purchased online. Returns mean
that in addition to delivery, the retailer has to also bear the cost of returns, thus impacting its
profitability by absorbing double the costs. From the customer perspective, the online returns process
is often painful and highly time-consuming, and thus the majority prefer in-store returns (62%).20
Do

The instructor may explain that online shopping’s inability to allow one to touch and feel while
buying apparel not only leads to high returns, but also restricts the e-commerce sales in the sector to

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basic necessities and standardised accessories. The items with low fashion content and fixed sizes
sell more easily online. On the other hand, clothes which are trendy and have higher fashion content

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do not sell easily online. Customers are unsure about the fit, as the sizes may vary according to the
cut and style of the apparel. Even the colours appear different in person. Thus, Amazon is preferred
by shoppers to restock the basics rather than to buy anything sophisticated – considerably limiting
the retailer’s opportunity to grow.

To overcome these challenges, and the value gap in its existing model (e.g., higher prices compared

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to in-store, lack of self-collect or in-store return features), Amazon has undertaken a number of
measures to improve its online experience and create an omni-channel presence. Some of these
include:

Enhancing the Brick-and-Mortar Presence

• Adding grocery capabilities through the acquisition of Whole Foods (WF): Ownership of over

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400 grocery stores in the US allows Amazon to offer click-and-collect services for the groceries
bought from WF, enjoys higher operating margin (5%), provides the ‘touch and feel’ grocery
experience and also offers these locations as points of delivery for other online orders. It would
also be able to tap into the quality-conscious customer base of WF, which is quite similar to its
Prime consumers – those who are willing to pay more for quality and convenience.
• Operating 24 bookstores (the first was opened in 2015).
op
• Establishing Amazon Go: A futuristic convenience store without cashiers and checkouts. There
is only one store thus far as the concept is still at the experimental stage.
• Setting up of campus pick-up points: Delivery locations at dozens of colleges.
• Launch of Amazon Fresh pick-up points — 29 stores by 2022.
• Offering lockers for pick up and returns: More than 2,000 self-service delivery locations for pick
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up and returns have been opened across more than 50 major metropolitan areas in the US,
including select WF stores.
• Partnership with Kohls: This allows Amazon to sell its hardware through some of Kohls locations,
and process returns for its online purchases.
• Establishing pop-up stores: 87 miniature retail storefronts (300 to 500 square feet) in the middle
of shopping malls carrying an assortment of Amazon hardware devices. They were discontinued
No

in 2022.
• Launch of treasure trucks to sell select items at discounts across six US cities – more than 100 in
the fleet across 29 US cities by 2019.21

Besides providing optimal delivery and returns options, the broader goal of the physical stores is to
drive more traffic to Amazon's online store. While the stores in themselves may not generate
significant sales, they do play a role in influencing purchases online. For example, in the first week
of listing WF’s products online, there was an additional US$500,000 of sales.
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Improving the Online Retail Experience

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• Providing better delivery options: Amazon Prime (including Amazon Fresh) membership helps
to take the cost of delivery out of the consideration by the members and offers various delivery
options from two-day shipping, same-day delivery, to delivery within two hours (Prime Now).
The retailer is expanding its fulfilment centres in city centres to enable the process. In 2021, it
had 253 fulfilment centres, 110 sortation centres and 467 delivery stations in North America.22

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• Increasing profitability: The launch of its own private label brands such as Amazon Essentials
and Lark & Ro helps to cut out the middleman and increase margins (current margins in the US
are less than 3%).23 It also gives the retailer greater control by owning the brand and sourcing.
Amazon is also investing in mechanised fulfilment centres that are testing the use of robots.
• Enhancing services: Amazon is hiring fashion editors to develop shopping guides to enhance the
browsing experience while buying apparel. It is also testing Prime Wardrobe, a service that lets
customers virtually try on clothes before buying them.

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From the above discussions (Q5 and Q6), it can be said that Amazon and Walmart are trying to
reinvent the retail industry. However, it is important to understand that their efforts to become full-
service players are primarily driven by the customers’ increasing need to have control over when and
how they shop – whether online or in-store, with the convenience of home delivery or the flexibility
of self-pick up.
op
6. a) How does the value network of Walmart’s “store picking” delivery model differ from that
of Amazon’s “warehouse picking” model? What are the advantages of each?
b) In this race towards building an omni-channel presence, how would you handicap
the chances of success for the two retailers?
tC

The instructor may compare warehouse picking and store picking on the following parameters (refer
to Appendix 3 for board plan exhibit):

Picking Efficiency

• The warehouse model enables greater picking efficiency as it deals with a larger number of orders,
allows better utilisation of pickers, and has a layout optimised for the picking process.
No

• Instead of single order picks assigned to an individual, a warehouse allows for more sophisticated
picking models with greater automation and zone picking (where the orders and pickers are
assigned to a zone).
• Store picking will not be as efficient as in the warehouse model as a store layout is not optimised
for picking but rather for merchandising.
• The automated systems of warehouse picking will have fewer errors (missing items or wrong
items) but the judgment of human pickers in stores may be superior for fresh produce.
Do

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Consolidated inventory at the warehouse means fewer out of stocks, larger assortments and hence
more complete orders in comparison to decentralised store inventory.

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Delivery

• In the warehouse model, while delivery trucks can be optimised as there is a greater number of
orders, they have to travel further and may have longer delivery times.

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• For in-store picking, delivery is faster as the order is picked from a store closest to the shopper.

Collection/Returns

• Store picking can offer “click-and-collect” to allow customer pick up from the store, which is
cheaper for the retailer, allows more flexibility to the shoppers though they need to travel to a
store, and generates opportunities for impulse buying.

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• Store picking can offer the cheaper and often preferred option of returning at the store. For the
retailer, depending on the product category (if a large return rate like apparel) and the number of
shoppers opting for store return, savings can be substantial. The warehouse pick model needs to
develop an efficient return process as it cannot offer returns to store.

Scalability
op
• Store picking can work even if only a few customers order online, as the stores primarily exist
for offline shoppers, and thus there is no need for the high throughput. In contrast, a warehouse
must have an adequate volume to justify operations.
• Store picking may not scale as with too many orders, pickers may interfere with the customers
shopping at a store, unless picking at the store is done after closing time or at night.
tC

• The centralised system of the warehouse model allows for greater control over training, processes
and quality in a centralised system versus managing the same process over thousands of stores.

Capital Investment and Overall Costs

• The warehouse model will have lower picking and delivery costs especially at full capacity
utilisation but high capital investment in warehouse and automation.
No

• The store model may have higher fulfilment (picking and delivery) costs (unless large percentage
select click-and-collect) but it requires no additional capital investment.

For part B, students may be asked to break out into groups (of six to seven) with each group assigned
either Amazon or Walmart (such that both retailers are equally represented). Each group may then
make a case for the assigned retailer using arguments based on strength and weakness analysis of the
integrated models being pursued by the respective retailers (refer to Table 4 and Table 5).
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Table 4: Strength and Weakness Analysis of Amazon’s Integrated Approach

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Strength Weakness
• Enhanced service and delivery options • Limited physical presence
through Amazon Prime — high • Organisational cultural differences from
switching costs Whole Foods
• Strategic acquisitions and partnerships to
• Limited ability to provide touch and feel

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develop a physical presence experience in groceries
• Deep financial pockets for continued
investment in acquisitions and • Apparel sales skewed towards basics as
tedious process for returns
technology
• Lowest online prices • Subscription model (Prime) — increase
in smaller orders and costly deliveries
• Well-established network for home

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deliveries, continuous innovations • Dependence on UPS and FedEx (though
• First mover advantage – strong and loyal is developing Amazon logistics)
consumer base in online retail • Lacks understanding of offline customer
• Amazon Fresh – deeper penetration of behaviour – poor show at its bookstores
the grocery category • Lacks capabilities in domains such as
• Increase in profitability: buying, sourcing, curating and stocking
op
o Expanding consumer base –
targeting quality conscious
customers (Prime and Whole
Foods) – improve profitability
o Private label brands — increase
in margins and greater control
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o Self-collect, and in-store

transactions

Table 5: Strength and Weakness Analysis of Walmart’s Integrated Approach

No

Strength Weakness
• Lowest in-store prices • Loss of price value — online prices
higher than in-store prices
• Strong network of physical stores with
improved user-friendly layouts • Online prices higher than Amazon
• Ability to leverage store locations and • Lacks adequate last-mile connectivity
inventory for making deliveries, and as (despite using store associates, tie up
collection points with Parcel)
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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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• Strong capabilities in inventory and • Loss in profitability – reduced cross-
supply management selling opportunities, increased

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proportion of less profitable sales
• Free delivery over US$35 without
membership fees (compared to Amazon
Prime)
• Strategic acquisitions to build online
competence and expand product range

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• Expanding consumer base — developing
an online fashion vertical; Uniquely J

It may be argued by the groups rooting for Amazon that Prime has irrevocably skewed the numbers
in favour of the retailer by creating an all-inclusive package of streaming entertainment, e-book

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lending and an exclusive access to a growing stable of services and benefits, while making the cost
of delivery irrelevant. The yearly membership with a number of freebies has enabled Amazon to gain
consumer loyalty and earn predictable steady revenues. In addition, the acquisition of WF, and pick-
up/same-day delivery options to Prime members, has helped the retailer gain a foothold in the grocery
market both online and offline and increase its share of the wallet of the existing customers (the
customer profile of WF and Amazon are considered to overlap significantly). Its price cuts of almost
49% at WF resulted in 25% increase in customers, in the first week alone.24 However, others may
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point out that Prime entails fast shipping which costs the retailer billions of dollars. Additionally, in
the case of grocery, the subscription model results in a higher number of small orders resulting in
costly deliveries. For the retailer which is already low on profitability, these are significant issues
going forward. In addition, given that there is a lack of cultural synergy between WF and Amazon,
the acquisition may not have been the right strategic move. And even with WF and Amazon Fresh,
the retailer remains a 2% player in the grocery business compared to the market leader Walmart at
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more than 20%. Another obstacle in Amazon’s physical outreach could be its lack of understanding
of in-store consumer behaviour. Its consumer insights from online buying behaviour have not been
effective in its physical bookstores.

Walmart, on the other hand, has a strong and large physical network for it to leverage effectively for
its online operations. Using the locations as pick-up points and for in-store returns allows the retailer
to overcome the two big shortcomings in its online model in case of groceries and apparel. Amazon
No

will need to invest enormous resources in terms of capital as well as time in order to be able to
emulate that. Furthermore, Walmart’s strategic acquisitions in US are helping the retailer to broaden
its inventory and target new customer segments. Its free two-day delivery offer without membership
fees, and Walmart+ as subscription-based service are combating Prime, and use of store associates
for store-to-home deliveries are helping it to overcome the last-mile connectivity challenge. However,
the biggest challenge Walmart faces is on the product price front, and hence its profitability. On
account of the higher operational costs of the online model, Walmart has no choice but to either offer
high online prices (which it did initially) or squeeze its margins to reduce the price premium. Thus,
its less-profitable online transactions are replacing its more profitable in-store transactions.
Do

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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The instructor may summarise by pointing out that both Amazon and Walmart are well cognizant of
the fact that neither the physical channel nor the online channel is equipped by itself to provide

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customers the benefits they seek in different situations. Customers’ path to purchase increasingly
involves the usage of a mix of channels in search for optimal value, and thus calls for an integration
of the two (brick-and-mortar model and e-commerce) for future growth.

However, the challenge for Walmart is how to adopt the omni-channel model while maintaining the
profitability of its existing model; and for Amazon to develop a physical footprint and the capabilities

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to manage it, without incurring billions of dollars in capital expenditure. Both are aggressively
pursuing omni-channel strategies, and only time will tell who will win the race.

7. a) Analyse and compare the financial and strategic performance of Amazon and Walmart
over the years.

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b) Estimate the online sales of Amazon in US market. What do you think is the profitability of
these sales?
c) Compare the employee, asset and inventory productivity of Amazon and Walmart.

The instructor can start by querying the class on which retailer they think has greater sales and profits.
Surprisingly, a majority of the students would favour Amazon prior to seeing the data. On comparing
the financial performance of the two (refer to case Exhibit 1) it can be seen that Walmart scores
op
better over Amazon on many parameters: in 2021, its sales, at US$573 billion, is higher than that of
Amazon at US$470 billion; and its operating income at US$26 billion is more than that of Amazon
at US$23 billion. However, despite doing better, Walmart’s market capitalisation at US$372 billion
is a quarter of that of Amazon, which stands at US$1,547 billion.25 Though this divergence depends
on the day the case is discussed.
tC

This can possibly be explained by the much higher growth prospects of Amazon with its year-on-
year sales growth rate in 2021 and 2020 at 22% and 38% respectively.26 The instructor may highlight
that Amazon’s consistent focus on long-term growth and market leadership rather than short-term
profitability have enabled the retailer to gain investor confidence and support despite the retailer
reporting an annual profit in only 16 of its 23 years of operations as a publicly traded company.27
Besides, its AWS business is highly profitable, with an operating income of US$18.5 billion in 2021
(y-o-y growth of 37%), and supports the company’s retail business.28 The important point is that on
No

traditional metrics, Amazon may be valued at US$575 billion (25 times earnings of US$23 billion)
and still be more than Walmart’s market cap at 14 times (372/26) of its earnings. Amazon has clearly
drawn a different investor profile than traditional companies that are valued on earnings multiples.

Walmart, on the other hand, having faced an annual sales decline almost since the advent of Amazon
till 2016 (its worst fall at 0.7% decline), grew in 2021 and 2020 by 2.4% and 6.7% respectively. 29
One of the key trends that contributed to the company’s growth is digitisation with more and more
people preferring to shop online from the comfort of their homes or office. Its e-commerce sales grew
from 7.1% to 11.6% of its net sales. Increasing urbanisation that has led to high population density
Do

in the cities is one of the key factors behind the surge in the popularity of e-commerce. Given the

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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heavy congestion on streets, a lack of adequate parking spaces and long commutes over public
transportation, buying at brick-and-mortar stores has become very inconvenient. Moreover, with a

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growing number of urban households having both husband and wife working, ‘time’ is increasingly
at a premium. The outbreak of the COVID-19 pandemic, acted as a cherry on the top for online
retailing.

At this point, the instructor may highlight that while the growth prospects for Walmart in comparison
to Amazon clearly look bleak, the retailing industry is still predominantly offline. The e-commerce

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sales in 2021 were only 14.5% of the total retail sales in the US.30 Thus while Walmart faces the
online challenge, Amazon faces the offline challenge. The interesting view here is that Walmart stock
is being hammered because its earnings are stagnating due to investments in developing online
capabilities. Imagine the frustration of Walmart leadership to the divergent views taken by investors
to Amazon and Walmart investments.

For parts B and C, students may be asked to form groups, and calculate the values asked, using the

yo
data from case exhibits. Tables 6 and 7 below present the calculations. This can be a rich discussion
depending on the course and the instructor’s preferences. Some of the counter-intuitive points are:

Amazon

• The retail sales of Amazon online in the US are not available and have to be estimated as per
Table 6. The point of Tables 6 and 7 is to understand whether in the US (the most advanced
op
ecommerce market in the world and most likely to generate a profit), can Amazon (the best, most
experienced ecommerce company in the world) make money from online retail sales?

In Table 6, we derive that the online retail sales of Amazon in the US are about US$150 billion (the
exact number derived is US$148.79 billion). Whether it is US$125 billion or US$175 billion will not
matter to our conclusions. The point is that about a third of the sales of the company comes from US
tC

online retailing.

Once we have this information, the instructor should get the students to understand the different
business models operating under Amazon, and then use this information to derive the profitability of
these businesses. Admittedly this is a judgment exercise. The savvy students will understand why
Amazon makes it so hard to find these numbers!
No

In Table 6:
• Total operating income of Amazon in the US, excluding AWS, is US$7.3 billion as given in
Exhibit 1B of the case.
• The physical store follows a “Walmart type” business model and cannot make an operating
income of more than 5% (of US$16.9 billion sales) or accounts for US$0.8 billion of income.
• Third-party commissions and services are an “Alibaba type” business model and Alibaba
makes 29% operating income from its China commerce business. Extrapolating that,
Amazon North America (NA) probably generates US$20billion in income (29% of
Do

US$69.255 billion) from the third-party business.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Other is mostly advertising and a “Google type” business model and Google operating
margins are 31%. Amazon should be even more profitable than Google as it does not need

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to invest in search – but simply selling customer’s past purchase and browsing data on its
site. Regardless, Amazon should be generating between US$7-10 billion in operating income
from the “other business” in NA.
• Prime subscription is a “Netflix type” business model. But we could argue that Amazon
Prime is a support of the online retail business so let’s club subscription revenues and online

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retail sales together to understand the profitability of this segment.
• Physical stores, third party, and other businesses in North America together generate between
US$28-35 billion in operating income versus the US$7.3 billion reported in Exhibit 1 of the
case. This implies that the online business is losing about US$20-25 billion!

Table 6: Estimate of Amazon’s US Online Sales

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In USD billion Total Sales NA/USA Operating Income
(Ex 12) NA/USA
Physical Stores (Whole 17 17 0.8 Walmart Business Model
Foods) (5%)
Primarily NA
Third Party (commissions and 103 70* 20 Alibaba Business Model
op
services charged by Amazon) (29%)

Subscriptions (Prime 32 21* (4 billion but Netflix Business Model

memberships) exclude as it (21%)
supports e-tail)
Other 33 (of which 22* 7 Google Business Model
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31 billion is (31%)
advertising)
Online Retail (non third-party 222 150* (20.5) Pure e-tail Business Model
online sales of Amazon)
Total less AWS 407 280* 7.3 7.3 Billion from Ex 1B
* We have assigned 67% of the overall sales to NA/USA in proportion to the overall split of US$314
No

billion to US$470 billion as per Mix C of Case Exhibit 12).

Amazon advertising model can be considered to have twice the operating margin compared to Google
as it does not need to build the context search data and use the existing customer purchase data. If so,
loss from online retail is 20.5 + 7 = US$27.5 billion.

Students will find this profitability analysis astonishing. Some believing Jeff Bezos to be a god,
disagree with the numbers and that is when the instructor should take them into the productivity
analysis shown in Table 7A.
Do

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Table 7A: Amazon and Walmart Productivity

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2001 2006 2011 2016 2021
Amazon Walmart Amazon Walmart Amazon Walmart Amazon Walmart Amazon Walmart
A
Sales 3,122 217,799 10,711 344,992 48,077 443,854 135,987 481,317 469,822 567,762
Employees 7.8 K 1,383 K 13.9 K 1,900 K 56.2 K 2,000 K 341.4 K 2,300 K 1,600 K 2,300 K

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Inventory 144 22,749 877 33,685 4,992 40,714 11,461 43,046 32,640 56,511
Total 1,637 83,451 4,363 151,193 25,278 193,406 83,402 198,825 420,459 244,860
Assets
B
Sales/ 400,256 157,483 770,576 181,575 855,463 221,927 398,322 209,268 293,639 246,853
Employees

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Sales/ 21.68 9.57 12.21 10.24 9.63 10.90 11.87 11.18 14.39 10.05
Inventory
Sales/ 1.91 2.61 2.45 2.28 1.90 2.29 1.63 2.42 1.12 2.32
Assets
C
Fulfilment 374 937 4,576 17,619 75,111
op
Costs
Shipping 376 884 3,989 16,200 76,700
Costs
Logistics 750 1,821 8,565 33,819 151,811
Costs
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D
Fulfilment 11.98% 8.75% 9.52% 12.96% 15.99%
Costs as %
of Sale
Shipping 12.04% 8.25% 8.30% 11.91% 16.33%
Costs as %
of Sales
No

Logistics 24.02% 17.00% 17.82% 24.87% 32.31%

Costs as %
of Sales

Amazon Millions NA 4 65 200

Prime
Subscriber
A and C: Data from case exhibits 9 and 11; B and D: Values computed from data from case exhibits 9 and 11. All values
Do

in USD million except for the count and calculated values

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Table 7B: Amazon Sales Analysis - I

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2016 2021
AWS 12,219 62,202
Third-Party 22,993 103,366
commissions

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Other Including 2,950 33,336
Advertising

Amazon Sales - AWS - 97,825 270,918

3rd Party – Advt.

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Adjusted Sales 8.54 8.30
/Inventory
Adjusted Sales to Assets 1.17 0.64

Fulfilment Costs % of 18.01% 27.72%

op
Adjusted Sales
Shipping Costs % of 16.56% 28.31%
Adjusted Sales
Logistics Costs % of 34.57% 56.04%
Adjusted Sales
tC

Table 7C: Amazon Sales Analysis - II

2016 2021
Amazon Sales - AWS 120,818 374,284
& Advt.
No

Adjusted Sales 10.54 11.47

/Inventory
Adjusted Sales to Assets 1.45 0.89

Fulfilment Costs % of 14.58% 20.07%

Do

Adjusted Sales

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Shipping Costs % of 13.41% 20.49%
Adjusted Sales

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Logistics Costs % of 27.99% 40.56%
Adjusted Sales

• Some may argue against this, and point out that once the business scales up, profits will appear

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for Amazon. However, the data is not so supportive. First, it has been in business for 20 years.
Second, it is already by far the largest online retailer in the US and the scale is yet to kick in.
Third, and perhaps most damning, the fulfilment and shipping cost as percentage of sales over
that past 10 years has gone in the wrong direction.
• Amazon’s sales-to-employee ratio improved over 2001 to 2011 but started deteriorating after
that rather dramatically. This is due to a massive increase in the logistics workforce, as the retailer
is increasingly now a delivery business (not considering inflation!).

yo
• Its sales-to-inventory ratio deteriorated over 2001 to 2011, but started improving steadily after
that, as the business changed to include more third parties, AWS and advertising revenues.
• Its sales to total assets improved from 2001 to 2006 but started deteriorating after that rather
dramatically. This is the effect of increased logistics investments as it is now a delivery business.
• Logistics cost as percentage of sales declined from 2001 to 2006 but started deteriorating after
that rather dramatically as the number of Amazon Prime members increased significantly.
op
• Furthermore, at the outset, Amazon advantages are touted as it doesn’t need assets, inventory or
employees as does a physical store. This is what makes the online retailer such an attractive
proposition from an investor perspective. However, as Table 7A demonstrates, it is worse on
inventory and asset to Walmart. And, if there is a trend over the past 10 years, it is that Amazon
ratios are getting worse on all three.
tC

Walmart:

• Sales per employee have continued to improve with the exception of a dip in 2016.
• Inventory ratio kept improving except for the past five years. Although it started worse than
Amazon, Walmart’s ratio became better. The exception in the last five years is due to the ‘other’
sales of Amazon.
No

• Asset turnover has been in a narrow range for Walmart. It is pretty much always superior to
Amazon especially in 2021 (without taking the adjusted sales of Amazon as shown in Table 7B
and Table 7C).

9. What are the fundamental business model differences between Amazon and Walmart?

The instructor may point out that Amazon is pursuing a ‘platform’ strategy versus Walmart’s product-
Do

centric approach.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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The platform-based approach revolves around the task of allowing platform participants to benefit
from the presence of others on the platform. It enables all the participants to transact with each other

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and take advantage of the network. Some examples of companies besides Amazon that have adopted
this model are Alibaba, Airbnb, eBay and Facebook.
The concept of a platform business is the creation of digital marketplaces that help to scale
participation and collaboration. The three different types of platforms that have gained significance
over the last few years facilitate transactions, interactions, and mobilisation:31

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1. Aggregation platforms: Transaction or task-focused. They connect users to a broad array of
relevant resources. They operate on a hub and spoke model with the platform owner as the
organiser, operator and broker of all transactions. Examples are eBay and Etsy.
2. Social platforms: They support engagement among people with common interests. They
aggregate users to foster networks of relationships. Examples are Facebook and Twitter.
3. Mobilisation platforms: They move people to work together to accomplish something beyond

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the capabilities of any individual participant and foster longer-term relationships. Examples in a
business context are supply networks and distribution operations.

On the other hand, the traditional product-centric competitive strategy attracts customers individually
who evaluate the product features and price independently. The differences between the platform and
product strategies can be tabulated below:
op
Table 8: Product and Platform Strategies

Focus on: Product Platform

Design Customer needs Customers + suppliers needs equally

Competitive Product features: differentiation Network effects: The “winner takes it all”?
tC

Revenue Primarily single: Exchange Usually Multiple: Access charge + adv. +

products for cash + some services ranking + support
Monetisation Customers Customers (Netflix); suppliers (eBay); audience
(FB); all (Amazon)
Profit On firm and individual On suppliers and number of transactions; Wealth
No

transaction; creation model

profit maximisation model
Cost Primarily variable cost, margins Primarily fixed cost, scalability
System Closed loop – “control” Open loop (plug and play) – “empower”
Marketing Traditional push and pull Primarily word-of-mouth pull
Customer Switching Minor Major
Do

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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Manager Cost + quality Connection + gravity + flow

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Examples Outlook; Apple pre-2003 Gmail; Apple post 2003; Airbnb; Uber

Wrap-Up

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The case illustrates the growing need for retailers to pursue an omni-channel strategy to overcome
the shortcomings of an online retail and brick-and-mortar model. It highlights how two retailers at
opposite ends from each other are leveraging their existing capabilities and creating new ones to
bridge the gaps in their respective value propositions. This case will also help the students develop
an understanding of how a business model, however effective, needs to have the flexibility to adapt
and evolve with time.

yo
op
tC
No
Do

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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APPENDIX 1: TYPES OF DISTRIBUTION CHANNELS

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Before commencing the specific questions, the instructor may briefly discuss what distribution is and
the different types of distribution channels that may be used by organisations. The distribution
function is responsible for taking the goods and services from the producer/manufacturer/service
provider and making them accessible to the end customers. It can either be done using a direct or an
indirect channel.

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Direct Distribution

A distribution system is said to be direct when the product or service goes directly from the producer
to the customer without involving the middlemen. The producer can set up its own website or/and a
salesforce that directly sells to the customers. For example, Dell in 1985 started out as a direct seller
offering ‘built to order’ initially through a mail-order system, tele-calling and later through its online

yo
sales platform. Having no middlemen allowed the company to eliminate many associated costs while
being able to better understand the buyer needs and offer customised products.

Indirect Distribution

A distribution system is said to be indirect when there are middlemen or intermediaries within the
distribution channel. Depending on the number of intermediaries between the producer and the
op
customer, it can be categorised as a one-level or two-level distribution channel. When a producer
sells through only one intermediary, a retailer such as Amazon, Walmart or Facebook who in turn
sells it to the consumer, it is called a one-level channel. Another route is to use two or three levels of
intermediaries such as selling to the distributors/wholesalers/ agents who in turn sell to the retailers,
and who would finally sell to the consumers (refer to Figure 2).
tC

Figure 2: Examples of Direct and Indirect Channels

Producer Consumer

Producer Retailer Consumer

No

Producer Wholesaler Retailer Consumer

Producer Agent Wholesaler Retailer Consumer

Do

There are clear advantages and disadvantages associated with indirect selling. The use of
intermediaries allows a producer to avail higher cost efficiencies by first, saving on the cost and time

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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of delivery as the channel members are specialised in the distribution function (unlike the producer)
and are able to perform at a faster and cheaper rate; second, capital expenditure otherwise required

os
for setting up the retailing operation (e.g., cost of setting up a store); and, third, by widening the reach
of its goods to a larger consumer group. The resellers also help in boosting sales through in-store
promotions and product displays. Furthermore, it provides customers with the convenience of
shopping for a wide range of products under one roof, buying in small quantities as desired (bulk
breaking)32, and financial support through various payment options. The retailers’ ability to take on
multiple manufacturers gives economies of scope, which can then be passed on to the shoppers.

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On the other hand, each level of intermediaries charges a commission for their services which adds
to the cost of the product, and the producer also tends to lose control of the communication with the
end consumers at the point of sale.

APPENDIX 2: BOARD PLAN FOR ONLINE PENETRATION ACROSS CATEGORIES

yo
Books (50%+) Clothing (35%+) Groceries (4-5%)

Assortment Online long tail Long tail adds some Long tail adds limited
availability adds value, especially for value as substitutable
value more unique sizes
Standardisation Yes, no differences Yes for staples, no for No standardisation as it
op
in quality fashion items is impossible for fresh
items
Quality Superior online Fit, fabric, colour Superior offline as
Information reviews superior offline idiosyncratic
Waiting Time Limited value of Can wait, but the List driven but missing
immediate delivery excitement of buying items problem
tC

or digital delivery now is missing

Unattended Possible, and low Possible, but valuable Challenging for frozen
Delivery value items and fresh items
Returns Not expected by Many, need robust and Difficult as perishable,
customer easy return process so either not expected
but dissatisfaction
Prices Lower online, Delivery cost is Delivery cost substantial
No

delivery cost relatively small to order as picking + poor

minimal value but returns are value/volume ratio +
costly complexity of fresh,
frozen, ambient product
combinations
Do

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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APPENDIX 3: BOARD PLAN FOR ONLINE PENETRATION ACROSS RETAIL FORMATS

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Store Warehouse

Picking • Human judgment of • Automated

quality • Picking efficiency
• •

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More out of stocks Fewer errors
• Customer interference
Delivery • Shorter routes • Truck optimisation
• Faster delivery times • Longer delivery times
Collection & Returns • Offer click and collect • Cannot offer click and
service collect service
• Returns to store • Need to develop a dedicated

yo
possible return process
Scalability • Can start small • Need scale to justify
• Limited scalability • Greater control over process
Investment & Costs • No capital investment • Substantial capital
• Higher operating costs • Lower operating costs at
scale
op
Endnotes
1
Krystina Gustafson, “Nearly Every American Spent Money at Wal-Mart Last Year”, CNBC, April 12, 2017,
https://www.cnbc.com/2017/04/12/nearly-every-american-spent-money-at-wal-mart-last-year.html, accessed February 2022.
2
Mary Hanbury, “The Average Amazon Shopper Still Earns More than Walmart's, and it Reveals a Key Challenge for the E-
Commerce Giant”, Business Insider, January 25, 2020, https://www.businessinsider.com/amazon-shoppers-richer-than-walmart-2020-1,
tC

accessed October 2022.

3
Ibid.
4
Dominick Reuter, “Meet the Typical Amazon Customer, a College-educated Married Woman in the Southeast Earning $80,000”,
Business Insider, February 18, 2022, https://www.businessinsider.com/typical-amazon-shopper-demographic-educated-woman-earning-
middle-income-2021-7, accessed October 2022.
5
Dominick Reuter, “Meet the Typical Walmart Shopper, a 59-year-old White Suburban Woman Earning $80,000 a year”, January, 17,
2022, https://www.businessinsider.com/typical-walmart-shopper-demographic-white-woman-earning-middle-income-2021-7, accessed
October 2022.
6
“Driving Grocery Store Optimization Through Perishables”, SmartSense, 10 December, 2019, https://blog.smartsense.co/grocery-
store-optimization-perishables, accessed October 2022.
No

7
Douglas Quenqua, “Many Unhappy Returns? Online Holiday Shopping’s Big Hangover”, The New York Times, December 26, 2017,
https://www.nytimes.com/2017/12/26/style/online-holiday-shopping-returns.html, accessed February 2022.
8
Max Vanegas, “Walmart vs. Amazon: Which is Cheaper?”, Lendedu, April 6 2020, https://lendedu.com/blog/walmart-vs-amazon/,
accessed February 2022.
9
Julia Faria, “Wal-Mart Stores, Inc Advertising Cost Worldwide in the Fiscal Years 2014 to 2022”, Statista, March 25, 2022,
https://www.statista.com/statistics/622029/walmart-ad-spend/, accessed October 2022.
10
Daniela Coppola, “Annual Global Marketing Costs of Amazon from 2010 to 2021”, Statista, July 21, 2022,
https://www.statista.com/statistics/506535/amazon-marketing-spending/, accessed October 2022.
11
Peter Senge defines learning organisations as the organisation where learning is insinuated into the fabric of life, and the source of
sustainable competitive advantage. For more information, please refer to the article by David A. Garvin, “Building a Learning
Organization”, July 1993, https://hbr.org/1993/07/building-a-learning-organization.
12
Tylor Keenan, “What Is Collaborative Filtering?” Upwork, https://www.upwork.com/hiring/data/how-collaborative-filtering-works/,
Do

accessed February 2022.

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 SMU-22-0021TN Amazon Vs Walmart: Clash Of Business Models

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13
Jesse LeCavalier, “All those Numbers: Logistics, Territory and Walmart”, Places Journal, May 2010,

os
https://placesjournal.org/article/all-those-numbers-logistics-territory-and-walmart/, accessed February 2022.
14
Ibid.
15
Jeffrey Pfeffer, “Here's Why Amazon is More Ruthless than Walmart”, Time, June 11, 2014, http://time.com/2850505/amazon-
walmart-suppliers/, accessed February 2022.
16
Clara Lu, “Walmart's Successful Supply Chain Management”, tradegecko, May 7, 2014,
https://www.tradegecko.com/blog/incredibly-successful-supply-chain-management-walmart, accessed February 2022.
17
Walmart, Annual report 2021, available at
https://s201.q4cdn.com/262069030/files/doc_financials/2021/ar/WMT_2021_AnnualReport.pdf, accessed October 2022.

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18
Ibid.
19
Hayley Peterson, “A 2-Year Price Study Put Walmart and Amazon Head-to-Head — and the Results should Terrify Amazon”,
Business Insider, 27 November 2017, https://www.businessinsider.in/A-2-year-price-study-put-Walmart-and-Amazon-head-to-head-
and-the-results-should-terrify-Amazon/articleshow/61823398.cms, accessed February 2022.
20
Douglas Quenqua, “Many Unhappy Returns? Online Holiday Shopping’s Big Hangover”, The New York Times, 26 December 2017,
https://www.nytimes.com/2017/12/26/style/online-holiday-shopping-returns.html, accessed February 2022.
21
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31
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32
tC

Retailers buy in bulk quantities from the manufacturer or wholesaler, and resell in smaller quantities to their customers.
No
Do

35/35

This Teaching Note is authorized for use only by Dr Raja Roy Choudhury, Other (University not listed) until Apr 2024. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860.