There is a very interesting recent trend in the retail and e-commerce industries that can be seen in the activities of the two leaders of each industry, Wal-Mart and Amazon. As the customer base for both firms has blended together, so too have the strategies of the industry leaders. Both Wal-Mart and Amazon have adopted new plans and policies that are ultimately turning the two retail giants into much more similar companies. The good news, of course, is that this is all for the benefit of consumers. And when we are talking about Wal-Mart and Amazon, the consumer base is almost the entire American population.
Wal-Mart has implemented a new discount policy to help its online sales, in a move more in Amazon’s direction. Large items that are expensive to ship will now be discounted if customers choose the in-store pick up option. Wal-Mart saves money by using its extensive fleet of delivery trucks to move these products from warehouses to stores, rather than the more expensive option, shipping to customers’ homes. The company has also made some large purchases of smaller tech start-ups to improve its online presence.
Amazon’s most recent plan seem to be a step in the opposite direction. They have been opening physical stores across the country, with the primary focus being on their grocery store. Although it is a physical store, it is not a traditional grocery store. Customers download an app that registers when they walk in the door. Then, as customers pick up items, it automatically adds them to their online cart, and charges them when they walk out the door.
The competition between these two industry leaders has two broad effects. Consumers will be better off, and low-wage employees will be worse off. The competition between these two giants has created a price war, in which the American consumer will always come out on top. And again, the massive size of these companies makes it safe to say that the vast majority of American consumers are affected by this. These two firms, and other firms in the industries, are adopting strategies to make it as cheap and easy as possible for our preferences, as consumers, to be met. The introduction of new technologies and internet shopping has only made that process move faster.
Unfortunately, the introduction of technology could severely hurt low-wage workers and small businesses. If stores like the Amazon grocery store start to catch on, which seems highly likely because they are incredibly efficient for consumers, then every other grocery store, and later on maybe just every other physical store, will have to adapt to Amazon’s technology. This will put small businesses that cannot adapt out of business, and will take away the majority of jobs in these stores, replacing them with technology.
Overall, the competition between companies like Amazon and Wal-Mart, and the blending of physical retailers with e-commerce and technology, is great for consumers, and will continue to be great. However, if I owned or worked at a grocery store, I would not be so optimistic about my job security a few years down the line.