The Logistics of Logistics REPOST: Amazon vs Target vs Walmart with Rick Watson
Joe Lynch and Rick Watson discuss Amazon vs Target vs Walmart and their strengths and weaknesses in the areas of ecommerce, fulfillment, distribution, and logistics.
About Rick WatsonRick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the ecommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes. Watson was one of the first employees at ChannelAdvisor, spending 10 years there in various executive capacities and launching many of the company's flagship offerings. He was then recruited to launch the third-party marketplace at BarnesandNoble.com, expanding the company's product catalog by over 1 million items. After the successful marketplace launch, he served as CEO of Merchantry and led the company to a $30M acquisition by Tradeshift. Upon fulfilling the transition obligations of Merchantry to Tradeshift, Watson directed the cross-border product strategy of Pitney Bowes, a $450M business, comprised of Borderfree and the eBay Global Shipping Program. Watson's work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct-to-consumer digital ecommerce platform that powers AnneKlein.com and JosephAbboud.com.
About RMW Commerce ConsultingRMW Commerce Consulting supports investors and management teams incubating and growing digital businesses online – both direct-to-consumer and B2B. RMW was founded by Rick Watson after his more than 20 years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.
Key Takeaways: Amazon vs Target vs Walmart- The lines have blurred when it comes to retail and ecommerce. In the past, consumers either bought online or bought from their local retailers.
- Today, consumer expectations have risen in large part because companies like Amazon, Target, and Walmart have created such a wonderful customer experience.
- During the discussion, Rick talked about each company's business model, along with their relative strengths and weaknesses in the areas of customer experience, fulfillment, and delivery.
- Amazon
- Amazon is a pioneer in the ecommerce space, but to ensure that the customer experience, delivery, and fulfillment is world-class, Amazon has invested heavily in fulfillment centers close to consumers.
- The fulfillment centers enable Amazon to store inventory close to consumers which allows for fast delivery and even same-day / next-day delivery.
- Amazon has raised the bar on digital communication with customers and their accurate, on-time home deliveries set the benchmark for the rest of the industry.
- To further cement their position as the leader in-home delivery, Amazon has started an asset-based logistics company to keep the packages moving.
- Amazon is first and foremost a technology company and they will use their superior tech capability to stay a leader in the business.
- Target
- Target started as an old-school retailer with virtually no technology or online presence.
- In terms of selling online, Target had a very late start.
- Target was not equipped to manage an online store and they even had Amazon manage their online sales for a short time.
- As a traditional retailer, Target couldn't just copy Amazon's strategy.
- Target ultimately decided to invest in their stores. They made each store a fulfillment center and today, 90% of Target's online orders are fulfilled by their stores.
- Additionally, Target has pioneered several purchasing/fulfillment options including BOPAC (Buy online and pick up at curb) BOPIS (Buy online and pick up in store), and same-day / next-day deliveries via Shipt (an independent subsidiary of Target).
- Shipt facilitates same-day delivery from various retailers to its members through either phone apps or via their website. Shipt has over 200,000 personal shoppers delivering products to homes.
- Walmart
- Walmart is the world's largest company by revenue, with over $524 billion USD in 2020.
- Walmart is also the also the biggest food retailer in the USA.
- Walmart is a juggernaut when comes to sales and operational excellence. Walmart's inventory management, distribution, and logistics are arguably the best in the retail world.
- Obviously, the company understands retailing, but they struggled with their transition to online sales.
- Walmart was late to the online party and they had a few missteps.
- In recent years, Walmart has made major investments that enable their stores to be fulfillment centers.
- With over 11,500 stores worldwide, Walmart has locations close to the world's population centers.
- In addition to their store and fulfillment center investment, Walmart purchased Jet.com to gain the experience and resources of a web-native ecommerce company.