Clash: Amazon vs. Walmart

the author: Nirmaliya Kumar

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Publisher: Penguin Business

Pages: 238

Price: 799 Rs

The premise of Clash is the story of how Amazon, the world’s largest retailer, influenced the journey of e-commerce. Through the pages of this book, Nirmaliya Kumar captures the deep rivalry between two of America’s most successful retailers and how they have affected the entire retail landscape. Drawing on the best of his personal experiences through consulting assignments for retailers and brand manufacturers, as well as his research and teaching work, the author has managed to create a work that is both informative and entertaining.

The book is neatly planned with each chapter giving the reader a unique perspective on two businesses that are distinctly different and yet similar. The book opens with “Once upon a time, in the bustling town of Retailville,” which promises to tell a story, and it pretty much does. Of course, some details about both companies are well known and documented over the years. Nevertheless, students of the retail sector and industry trackers are likely to find this work useful.

The author touches on Walmart’s $18 billion acquisition of Flipkart in 2018, when he talks about the US chain’s increased focus on online business. Interestingly, while Walmart was moving away from its established trend of expanding physical stores, Amazon began spending significantly to build an offline presence in the US. While the two protagonists were locked in an apparent war, Covid-19 was waiting to happen. The pandemic dealt a blow to physical retail with about 12,200 stores, many of them multi-story, closed.

It is this backdrop that makes Clash a compelling case study of the retail universe as seen through the battle of the giants. Professor Kumar asks in the opening chapter: “With Walmart and Amazon adding online and offline retail respectively to the race, will their distinctive business models become similar?” The following chapters and pages of this Circling around the question, the reader reaches the conclusion of a story that is still unfolding.

The author makes a point of repeatedly reminding readers of the scale and size of Walmart and Amazon. “In the US, retailing is estimated to employ 18 million people. Globally, Amazon and Walmart together employ 4 million,” is one such example. Leading up to the book, The Economist cites a projection by JPMorgan Chase that Amazon will sell $554 billion worth of goods on its websites in the U.S. this year, giving it a 42 percent share of U.S. e-commerce. . It puts Walmart’s e-commerce market share at 6 percent for this year, making it Amazon’s closest online competitor and the largest U.S. retailer.

Even as Amazon and e-commerce are generally touted as disruptors for the retail sector, Professor Kumar refers to Walmart as the “real retail disruptor”. He backs up the original disruptive theory with the example of Main Street Treasures, a popular family-owned variety store that failed because of Walmart’s “everyday low prices” offering. . The book analyzes what makes Walmart tick. Going back to the 1990s, it explains how Walmart used information technology to manage business operations, breaking away from the prevailing trend of IT being deployed to audit business operations. “Because of the amount of data being generated and the need to analyze it for insights, the joke in the US in the 1990s was that with a physics PhD, anyone could work for NASA or Walmart,” he said. He writes, adding that Walmart has the second largest information system in the US after the Pentagon. Staying on the topic of size, scale and influence, the book notes that by the 1990s, almost every major brand had a dedicated Walmart team with a physical office in Bentonville (Arkansas), where Walmart was headquartered. , to service the account.

But basically the question is: What do Amazon and Walmart offer? Professor Kumar tried to answer. First, for Walmart. “The primary value offered by Walmart Supercenters to its customers is financial benefits through bulk shopping, also known as basket economics, in which a customer purchases a basket worth of goods and this results in significant savings on the overall cost. Is.” To its competitor: “Amazon offers its customers time savings (no trips to the store), less hassle and the ability to buy almost anything (endless aisles).” There’s no rocket science, but the book painstakingly describes each value proposition in detail to conclude that “both brands are at cross-purposes, so it’s important to that consumers trade off when choosing one another”.

On whether online retailing is profitable or not, Professor Kumar says that if Amazon is unable to break through its online retail business in its best market after so many years of operation, it is unlikely that others will. Can do better. Then they say that it is not impossible to make profit in online business. “One needs to pay attention in estimating e-commerce profitability.”

Clash examines India in the final chapter, which also brings Reliance Retail into the picture, making it an Amazon vs. Walmart vs. Reliance Retail battle.

Overall, what is missing from this book are voices directly from Walmart, Amazon or any other retail giant. Labor and workforce issues, which are often in the headlines in the case of large retailers and e-commerce firms, are also not examined. That said, Clash is a timely book, especially with Amazon recently turning 30, and its comparison to the Bentonville-headquartered retail behemoth is only logical.

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