Amazon and Walmart have been battling for retail dominance for 15 years — and there’s no end in sight

Business Insider/Jessica TylerWalmart’s pickup towers allow shoppers to pick up online orders in stores.

  • Walmart has been worried about Amazon for years, and it has forced Walmart to make some major changes to its e-commerce strategy.
  • Those changes have included introducing two-day shipping and improved grocery delivery options.
  • Here’s how Walmart has evolved to keep up with Amazon.

Walmart has been worried about Amazon for over a decade, according to former Walmart board member John Chambers. In 2003, Amazon was eight years old and was just starting to turn a profit. Still, Walmart was worried about the growing online retailer.

“This is something that I know. I saw Amazon coming at Walmart,” Chambers told Business Insider’s Julie Bort.

To keep up with the rapidly growing Amazon, Walmart has had to make a lot of changes to its business, from introducing two-day shipping and grocery delivery to spending more than $US3 billion on its acquisition of Jet.com.

Here are all of the ways Walmart has evolved to keep up with Amazon:


Walmart.com was initially launched in 2000.

Joe Raedle / Getty Images

Source: Walmart


Amazon had been founded five years earlier, in 1995, as a website that sold books.

Business Insider/Jessica TylerInside Amazon’ 4-star store in Soho, New York.

Source: Business Insider


In 2003, Amazon was eight years old and was just starting to turn a profit. Walmart had nearly $US245 billion in sales in 2003. Its $US8 billion in profit was more than all of Amazon’s sales that year. Still, Walmart was worried about the disruptive online retailer’s potential.

Source: Business Insider


“This is something that I know. I saw Amazon coming at Walmart,” former Walmart board member John Chambers told Business Insider’s Julie Bort.

Source: Business Insider


One of Walmart’s earliest innovations to online shopping was when it launched its Site to Store service in 2007, allowing customers to shop online and pick up their orders in-store.

Source: Walmart


The program has expanded quite a bit over the past decade. Now, shoppers are able to order online and pick up in-store at a pickup tower or locker.

Walmart

But e-commerce didn’t become a huge focus for Walmart until somewhat recently. In 2015, Walmart began testing its ShippingPass program, which offered shoppers free three-day shipping if they were willing to pay a $US50 annual subscription fee. That was roughly half the $US99 that Amazon Prime cost at the time.

Gunnar Rathbun/AP Images for Walmart

Source:

MarketWatch


In 2016, Walmart dropped its three-day shipping guarantee down to two days, the same that Prime offered.

Business Insider/Jessica Tyler

Source: Engadget


Also in 2016, Walmart acquired e-commerce startup Jet.com for $US3.3 billion.

Source: Business Insider,Business Insider


Jet offers Walmart access to urban customers, and the fact that it’s a digitally native brand means Walmart can expand its online reach further.

Jet.com

Walmart ended the ShippingPass program in 2017, just two years after its launch. It began offering free two-day shipping to all customers who spent $US35 or more.

Source:

MarketWatch


Meanwhile, Amazon has continued to lean in to Prime and has raised the cost to $US119 a year.

Leon Neal/Getty Images

It also raised the cost of its monthly Prime fee to $US12.99.


Walmart also partnered with Google Express in an effort to take on Prime in 2017.

Google Express

Source: Business Insider


Through the partnership, customers are able to place orders with Walmart at Express.google.com, on the Google Express app, or through Google Assistant-enabled devices like Google Home.

Google Express

Two months later, Walmart took a majority share in Parcel, a New York-based delivery startup.

Parcel

Source: Business Insider


This later helped Jet.com launch same-day delivery in NYC.

Facebook/Jet

Source: Business Insider


In December 2017, Amazon revealed its plans for Amazon Go, a cashierless convenience store. In January 2018, Walmart fired back by rolling out Scan & Go technology to cut down checkout lines at its stores.

Walmart

Source: Business Insider


Scan & Go allowed customers to scan items and pay on their phones. However, Walmart ended the program in 2018 due to “low participation.”

Walmart

Source: Business Insider


Both Walmart and Amazon have been emphasising their private-label brands this year. In February, Walmart unveiled four new private-label brands to compete with Amazon’s.

Business Insider/Jessica Tyler

Source: Business Insider


The brands are women’s collection Time and Tru …

Walmart

… plus-size brand Terra & Sky …

Walmart

… children’s brand Wonder Nation …

Walmart

… and men’s brand George.

Walmart

Amazon also has a number of private-label brands, including women’s brand Wild Meadow …

Amazon

… outerwear brand The Plus Project …

Amazon

… women’s brand Signature Society …

Amazon

… and men’s brand Quality Durables Co.

Amazon

Amazon is now estimated to own more than 80 private-label brands.

Amazon

Source: Business Insider


Walmart also has been acquiring more specialty apparel brands, like Bonobos and ModCloth, to attract millennial customers.

Spencer Platt / Getty Images

Source: Business Insider


Walmart’s e-commerce president and CEO Marc Lore has said the specialty acquisitions would help the company “create a reason for customers to shop” at Walmart over its competitors, like Amazon, in the future.

ModCloth

Source: Walmart


But it might have to acquire more than 40 brands that resonate with millennials to help lift margins in the long run, Lore said during a meeting with financial services firm Cowen and Company.

Source: Business Insider


Another initiative that Walmart-owned Sam’s Club took on in early 2018 was partnering with Instacart to compete with Amazon’s two-hour delivery service, Prime Now.

Source: Business Insider


In April 2018, Walmart added pickup towers and pickup lockers to some of its stores.

Business Insider/Jessica Tyler

Source: Business Insider


The pickup tower allows customers to place orders online and then retrieve items from the towers in-store within a few days.

Business Insider/Jessica Tyler

The towers compete directly with Amazon Lockers. But Walmart’s pickup towers are only available in Walmart stores, and Amazon Lockers are available in thousands of locations.

Spencer Platt / Getty Images


See our review comparing Walmart’s pickup towers to Amazon Lockers »


In May, Walmart invested $US16 billion to become the majority owner of Flipkart, India’s top e-commerce retailer, further expanding its reach internationally.

Business Insider/Jessica Tyler

Source: Reuters


According to Reuters, Amazon was also interested in acquiring the company, but Walmart ultimately won that battle.

Getty/Mark Makela

Source: Reuters


Most recently, Walmart announced that it plans to develop original TV shows to compete with Amazon’s Prime Video. The company announced partnerships with interactive video startup Eko and MGM Holdings to create original content for Vudu, the streaming service Walmart acquired in 2010.

Business Insider/Jessica Tyler

Source: Business Insider


Amazon has been spending a ton of money making shows and movies for Prime Video. One of its most successful shows has been “The Marvellous Mrs. Maisel,” which won two Golden Globes and five Golden Globes in 2018.

Amazon

Source: Business Insider


In late 2017, Amazon announced a new program, called Amazon Key, that allows delivery people to enter homes to leave packages inside, safe from both the elements and potential thieves.

Source: Business Insider


Walmart had previously revealed a similar feature thanks to a partnership with delivery service Deliv and smart lock maker August, which allows delivery drivers to enter customers’ homes to drop off packages and put groceries straight into their refrigerators.

Walmart

Source: Business Insider


Walmart and Amazon both offer grocery pickup, but Walmart was actually years ahead of Amazon in launching the program.

Source: Business Insider


Launched in 2013, Walmart’s grocery pickup allows shoppers to order online, drive to a store, and then wait in their car as an employee delivers groceries to their car at a scheduled time.

Walmart/Business Insider

Amazon’s program, only available at a few Whole Foods stores, works in the same way. But instead of ordering on Amazon, customers need to use the Prime Now app.

Katie Canales/Business Insider

Source: Business Insider


Even though Walmart’s program has been around longer, when Business Insider’s Katie Canales compared the two programs, she preferred Amazon’s.

Katie Canales/Business Insider

Source: Business Insider


She found that the pickup windows were more flexible and convenient, and that everything was wrapped more efficiently.

Business Insider/Mary Hanbury

Source: Business Insider


And even though Amazon has expanded its brick-and-mortar locations, Walmart stores still vastly outnumber them.

Business Insider/Jessica Tyler

Currently, Amazon’s store formats include the cashierless Amazon Go convenience stores …

Getty/Stephen Brashear

… Amazon Books bookstores …

Matt Weinberger/Business Insider

… and Amazon 4-Star, which carries its top-rated products.

Business Insider/Jessica Tyler

Walmart has more than 5,000 stores in the US.

Joe Raedle/Getty Images

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