Amazon and Walmart set up on eachother's turf

This week, two major retailers took a step out of their comfort zones, across the country, to play in their competition’s playground.  Walmart has expanded its west-coast technology lab, and Amazon has opened a photography facility in New York.

 

AMAZON IN NEW YORK

Image source: Matthew Ryan Williams for The New York Times 

Image source: Matthew Ryan Williams for The New York Times

 

Amazon announced the opening of a 40,000 square-foot photography facility in New York, which plans to run 24/7 when it’s fully operational in a few weeks.  Fashion, lead by Cathy Beaudoin, is estimated to be a significant blend of the company’s expected $95 billion business in 2013, which includes women’s contemporary Shopbop.com, men’s Eastdane.com, and MyHabit.com which is the flash sale component.

Amazon is west-coast based, with headquarters in Seattle and a significant presence in Silicon Valley, but the company was eager to make a home in New York.  The studio is expected to serve it’s own businesses, in addition to those sellers who use the Amazon site as a third party sales outlet and platform. 

 “New York is a magnet for talent — models, photographers, digitech people, hair and makeup stylists,” Beaudoin said.  It’s as much about cost-cutting and convenience as it is about image excellence.  “This is allowing us to scale and obsess over the customer experience”.

 

WALMART IN CALIFORNIA

Image: Walmart via Wired

Image: Walmart via Wired

While Amazon is focused on improving its soft-lines and ‘customer-browsing’ capabilities, Wal-Mart is looking to compete and play catch-up with the etailer in e-commerce technology.  The discount retailer is pouring money into mobile and talent, expanding it’s offices in San Bruno, California to include foosball tables and salmon entrees. 

Talented engineers are what the company is after, as Walmart continues to grow its $10 billion ecommerce channel.  Same-day delivery, online pricing, and free delivery (without membership) are the areas Walmart continues to make head-way. 

Walmart’s online revenue may only be a fraction of Amazon’s, there is significant opportunity with the volume of unique visitors to the site.  Walmart counted just shy of 63 million unique visitors in August – which is about half of Amazon’s 133 million.  That is a much smaller delta than the revenue measurement.  It shows that Walmart has the customer’s interest – it just needs a larger share of their dollar.  

Earlier in the month Walmart also opened two new online fulfillment centres so it could increase its product selection and ship packages to customers quickly and cheaply – the two strategies which enabled Amazon to become dominant in the channel. 

Both retailers have significant strength: Walmart has scale and profitability, Amazon dominates the e-commerce world.  Both have the vision and awareness to know they need to expand into new areas.  That is good news for the future of both.   

 

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Digital, E-Commerce, The MarketJennifer Pilkington - RAAmazon, Walmart