March 26th, 2012
The Google vs. Facebook joust is interesting, but flying under the radar is a another contest that’s probably more consequential, since the companies it entails have real-world value: Walmart vs. Amazon.
I first realized how serious Walmart was about online commerce a few years ago when I notice that Walmart’s website not only carried a vast array of products in an easily navigable space and offered free shipping for in-store pickup–they also had a real-time inventory system showing you how many of any given item were in stock at stores near your. Walmart had clearly responded to Amazon the way Blockbuster should have responded to Netflix.
The extent to which Walmart has continued to engage is interesting. I suspect they’ll continue to push grocery sections into their stores, because perishable food is the ultimate hedge against online commerce. (In the same way sports are a hedge against the on-demand content model.) But my selfish concern is that in order to compete with Walmart, Amazon will have to become more like Walmart. You already see some of that with Amazon now offering Amazon store-branded, low-price products.
The AmazonBasics stuff was actually a reaction to Monoprice, and very recession-sensitive type of merchandise at that. I haven’t heard that it’s a runaway success.
Your Romney/Staples article mentioned the beginnings of store-branded products which is a crucial revenue center not only for Walmart & Costco but the pharmacy chains as well.