Walmart Won’t Stay On Top If Its Strategy Is To Copy Amazon
Walmart’s recent change to free two-day shipping for online orders, no membership required, is the latest in a series of moves the company has made to fight Amazon and grow its e-commerce business. Last year, it purchased Jet.com and installed Jet’s founder, Marc Lore, as head of its e-commerce division. It has also been acquiring e-commerce niche players, including Shoebuy and outdoor gear retailer Moosejaw, and digital technology companies, such as search experts Adchemy and cloud platform OneOps. Walmart does need to shore up its e-commerce capabilities, but its attempts to out-Amazon Amazon aren’t a winning strategy. For one thing, by offering the new shipping service, Walmart is really only playing catch-up. Lore himself described free shipping as table stakes. And the new shipping offer doesn’t even put Walmart on par with Amazon, since it only applies to orders of $35 or more. That may seem like a low hurdle, especially when Amazon’s Prime membership costs $99 per year. But Prime members are likely to forget about the cost after it’s been paid for the year, while Walmart’s policy means money is inserted into the purchase equation with every transaction. Anything that makes people think about the amount they’re spending during their purchase reinforces Amazon’s advantage in delivering no-brainer experiences. Read more at Harvard Business Review.