For years now, market watchers and various prognosticators have been saying the age of big box stores is on the way out. Specialty shops and online sales are thriving, pushing sales numbers and profits down for many retail chains. But the folks at one of the world’s largest retailers say not so fast.
Sure, Amazon is riding a wave of success—shares are up 23 percent this year alone and the company’s market value is cresting $395 billion. According to CNN, only three American companies have values above Amazon – Apple, Microsoft, and Alphabet (Google).
Amazon is growing leaps and bounds, expanding into hosting – and it has some major clients too – while working to phase out contracted shipping companies like UPS and FedEx. You’ve probably heard about the much-vaunted drone delivery program … coming to a city near you, eventually. But that admittedly gimmicky delivery system isn’t what Amazon is banking on to take over yet one more aspect of its delivery system. Amazon is investing in two cargo airline companies and recently bought its own fleet of jets.
So, yeah, Amazon has momentum. But it’s not operating in a vacuum. Walmart has a lot of cash, and it’s willing to use it to stay near the top of the international retail game. After a brief dip early in the year when Walmart revealed it would see lower than expected profits, the company has bounced back into the favor of Wall Street investors, and its stock is up more than 15 percent. Sales prognoses are looking better, and earnings projections are up.
With retail stabilizing, Walmart is sure to turn its focus back toward e-commerce, a realm absolutely ruled by Amazon. And Walmart is playing for keeps, recently investing $3 billion in sizzling online startup Jet.com … and CNN is reporting Walmart is interested in picking up Indian e-commerce company Flipkart. A top trending startup in a sharply growing economy? That should give Walmart some heft in the market before they even put their considerable brand force to work.
How will this all play out? Far too soon to tell, but it’s safe to say that online retail just got a lot more competitive.
Elie Hirschfeld is NY real estate developer.