Yes, they are rivals. And, yes, they are competing on so many turfs. However, they also need each other strategically. Moreover, they are more like allies than competitor in terms of the product offerings. Why? Because Amazon is not only a platform dwarf Best Buy’s (from here going forward, we will refer Best Buy as “BB” in this article) channel power to reach consumers but also help BB to sell their own branded products such as “Insignia” TVs.
Now they are forming another joint force to get each other’s products in front of consumers’ eyeballs more broadly. Basically, during this move, Amazon really silently admitted that the “physical touch” really has positive and significant impact on consumers. Starting from this summer, BB will sell smart tv which are powered by Amazon’s Fire TV operating system. in stores. As we mentioned that Amazon will also sell BB branded products on its channels. Since this is an partnership between two biggest tech gadgets retailers in the North America, we believe that they negotiated terms on the vendors’ policy end.
Real Threat to Amazon – Walmart & Target
If you think BB is the main competitor that Amazon in mind, you are so wrong. BB is on Amazon’s side since BB’s product range only account for a fraction of what Amazon represents. Walmart and Target, on the other hand, are posing real threats to Amazon especially on the physical presents side in the United States.
Walmart made a pretty big buzz during last years Black Friday shopping spree that it partnered up with Google (Google Express) to put themselves on the voice shopping map via Google Home devices. At that time, you could basically get Google Home mini for free if you purchase those devices and also shop on Walmart.com. Not only that, Walmart is also working on their website total revamp project. The present appearance is like so … selling centric. Sure, it gets jobs done but consumers don’t feel it. Not like what Amazon has which really drives consumers crazy especially during the shopping season. The new design looks really like Amazon’s replica but cleaner and more focused. Based on what we have here, Amazon should, at least, break a sweat. Why? Walmart is definitely coming with its bulged financial arms to prepare big fight with Amazon. Walmart is in place to win this time. You can scan every checkbox this time. Really… Walmart is ready.
You might ask that how about Target? Target isn’t staying put as well. The newly updated Target app really catches consumers’ fingers. If you don’t pay attention, you will receive Target deliveries each and every single day. Yes, it’s that addictive and that convenient. In addition, if you have the Target Red card, you can use your red card as a payment method and receive free shipping each and every single time without any minimum purchasing amount attached along with 5% instantly savings.
The above isn’t the only move from Target. The latest logistics acquisition move from Target brought new blood, Shipt, into Target family. Also, Target just announced that it’s bring same day shipping to 5 cities by the end of this month. Boston, Chicago, New York, San Francisco and Washington, D.C., consumers shop on those cities will have an option to get their purchases delivered on the same day upon purchases.
Note: *) The same-day delivery for in-store shoppers costs a flat $7 *) oversized purchases like furniture might include an additional $25 handling fee.
Amazon’s only Weakness – Physical Stores
On this upcoming fierce war of the world of retailers, although Amazon seems to hold an upper hand, they really have their only weakness being exposed already. The lack of physical (location) stores is looming on them. The upper hand became the achilles heel shows that how fast the world is moving forward. On the other hands, Walmart & Target utilizes (once seems a burden of physical resources – brick and mortar stores and labors) their thousands of store locations to turn this game around. More often consumers can receive their purchases faster than they expected. 2-days shipping is just a term but it’s really like one day shipping once you make purchases from Walmart or Target.
The Joint Force Is The Beginning Of The New Dominating Retailer Partnership?
The map has been laid out for Amazon to get their glitches (the achilles heel) patched. The lack of store locations is being patched up through the “Whole Foods” acquisition, the Khol’s department store partnership (you can return Amazon purchases in Khol’s), and now the new join force with BB. If you count how many brick-and-mortar stores those 3 players have, you will get a figure which is around 2654 (Whole Foods – 473; Best Buy – 1026; Khol’s – 1155). Although it’s not like Walmart or Target which have vertical and horizontal integrations between physical and virtual stores, the acquisition and partnerships really show how the path can be and little by little, if things don’t go awry, Amazon will figure out how to fight back on their weaknesses and bring the full force to this war to face Walmart and Target directly.
It’s a great era which we live in. All the channels are intertwined with each other. For retailers, it means fierce competition but also presents opportunities to reshuffle this industry. For consumers, there isn’t a better time than now in terms of making purchases either online or in store to make our lives easier. Really, if you don’t have time to do any types of shopping or you just don’t want to, getting everything you want in hours is just a tap away from all those retailers you normally shop with.
Cheers to the better (shopping) life~~~!