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My contrarian opinion: Walmart is going to create some hard times for Amazon. Walmart ackuired jet.com just 4 months ago. Jet.com, a startup, has managed to cr

• Zelphyr 10y ago
  I'll add some anecdotal evidence as to why I don't think Walmart isn't capable of giving Amazon any hard times. When I got my first iPhone I was recommended a Zagg screen protector. I found that Walmart online had the best deal so I ordered it for in-store pickup. I was notified the day it arrived and headed back to the Layaway area. Nobody was there, but there was a little kiosk where I could enter my info and someone would fetch my item for me. Seemed like a very efficient setup. Walk in, get my thing, and leave. After putting my info into the kiosk and being told my item was on its way, I waited. And waited. And waited. About 15 minutes in, after entering the info into the kiosk again and not getting a response, I called the store and asked for a manager. It took me a minute to get them to understand that I was calling from inside their store to get my item. But finally, they got it and assured me that someone would be bringing out my item shortly. Another 15 minutes of waiting and I HAD TO CALL THEM AGAIN! And explain, again, that, "Yes, I'm standing inside your store, waiting for the thing I purchased. We talked about this already." All told, I was probably there for 45 minutes before I got my item. That was the last time I bought something from Walmart. Now, I'll concede that this was almost 10 years ago and maybe they've changed. But Walmart has never been known for the best customer service, and Amazon is always fantastic when I have to deal with them. So I'm placing my bet on Amazon in this particular race.
  • acchow 10y ago
    A synchronous, blocking logistics system (you going to a store waiting for a person or a conveyer belt) will never be as cost efficient as an asynchronous one (amazon dead-dropping your package on your front porch). Tho there are other tradeoffs (mainly expected latency).
    • Qworg 10y ago
      Cost efficient? Shipping isn't free - the last mile to doorstep is the most expensive part as well.
      • acchow 10y ago
        What do you mean? If you drive to a walmart, you're also spending money on gas and on your car's depreciation. It isn't free.
  • josephjrobison 10y ago
    Same thing happened to me only two years ago. Bought an Xbox controller on their website for in-store pickup. Go down to the store to pick it up and they say it's actually out of stock. But then I see one sitting right there so I ask to buy it. They say that one is reserved and there's a glitch in their system. So I ask to just buy that right there but the in-store price was $15 more than online price. The employee says to me "supply and demand, how bad do you want it". Weird interaction. Just bought it and left. Definitely logistics problems still.
    • Cerium 10y ago
      I know staples / office max show lower prices online than in store. If you ask for a price match they will price match against themselves and give you the good price.
  • avip 10y ago
    > "I don't think Walmart isn't capable of giving Amazon any hard times" I had to read this intro 3 times to wrap my brain around the 2.5 negations, just to find out you DO think Walmart is not capable of competing with Amazon :)
• jldugger 10y ago
  jet.com reached their 1B revenue target by losing money on every transaction: rather than have inventory, they relist competitor's inventory at lower prices. Which is why your jet.com purchase may bear the name of some Other online retailer when it arrives. Presumably Wal-Mart will correct both the inventory and the prices in the near future. And when the subsidies dissapear, so will the competition. Besides which, isn't Amazon a cloud tech company with a vestigial retailing arm?
  • rqebmm 10y ago
    > rather than have inventory, they relist competitor's inventory at lower prices Wow. No wonder Wal-Mart bought them, they're cut from the same cloth.
  • kbenson 10y ago
    > Besides which, isn't Amazon a cloud tech company with a vestigial retailing arm? That's sort of like trying to pin down General Electric. At some point, you have to give up with the "they are a $foo company" thinking and accept that they've grown past the boundaries and limitations imposed by a single market.
  • robinduckett 10y ago
    What are the stats on revenue from retail vs revenue from AWS? I doubt they'd release those numbers but surely there must be an estimate
    • sib 10y ago
      AWS revenue last quarter was $3.56B (publicly stated). Total revenue, $43.7B.
      • kbenson 10y ago
        AWS provides much better margins than some of their other businesses though, to the point where AWS profit can actually be more than the overall company profit (it allows them to run other divisions at a loss strategically). That doesn't seem to be that case in the most recent filing[1], but it did beat out the North American division. 1: http://www.zdnet.com/article/amazon-posts-mixed-q4-results-as-aws-continues-to-grow/ http://www.zdnet.com/article/amazon-posts-mixed-q4-results-a...
• brilliantcode 10y ago
  Amazon doesn't have much to worry about in the short term. Ordering online from walmart.com was so horrible that I'd never return. It's still pretty horrible, the people that's packaging the items do not give a shit whatsoever. I had a tv that had burn spots. I ordered groceries that somehow thought it was more efficient to ship from Ottawa when the nearest one was 10 minutes away. Brand and impressions are critical when switching cost is nil. Amazon is not perfect but it's not due to their fault, it's always the carrier delivering items late.
  • runamok 10y ago
    Similar experience. I ordered twice from Walmart.Com with store pickup twice in 2 years. Both times it took 20 plus minutes to get my item. One of those times I had to dig through the pile of boxes to find mine myself... I suspect the core problem is they pay so little they can't attract anyone to work there that gives a crap.
    • city41 10y ago
      I've had that experience (and worse) with all store pickup options: Target, Home Depot, WalMart, etc. I just don't do store pickup for online orders anymore. I either have it shipped or go find it in the store myself.
      • mjn 10y ago
        This was also my experience when I lived in the U.S., but in the U.K. my experience with in-store pickup (usually called "click and collect") has been pretty good. Not sure why. Virtually everyone does it in the U.K., both higher-end places (John Lewis, Marks and Spencer) and lower-end places (Argos, Wilko), and all seem to be pretty efficient at it. Argos especially is much better than anything I've seen in the U.S. in that regard. They have a subset of more commonly ordered items labeled "FastTrack" items, meaning you can typically pick up within 1 hour at any location (you can check ahead of time whether the item is in stock for 1-hour pickup at your desired location, but it usually is). Other items are typically available the next day, with the exception of some larger stuff (furniture, etc.) that might take longer. And if you don't want in-store pickup, you can get home delivery within a chosen 3-hour window the next day, which I find a lot more convenient than even Amazon Prime, where you can't specify which time of day you want the delivery.
• watchdogtimer 10y ago
  I ordered $40 of powdered peanut butter from Jet.com yesterday afternoon. It was on my doorstep here in central Iowa by 9AM today.
• s4vi0r 10y ago
  Unless Amazon really fucks something up, Walmart will never be able to attract the tech talent that Amazon does. Nobody wants to work for Walmart.
  • SmellTheGlove 10y ago
    Why not? Amazon is fairly widely known to treat its employees, on average, poorly. While much smaller, I haven't heard many bad things about Walmart Labs.
    • sqeaky 10y ago
      Most Don't distinguish walmart labs from walmart and walmart treats its employees pretty terribly. It wasn't that long ago that a regional manager forced people to work off the clock and walmart lost a major suit against minimum wage employees. Even though other store managers and walmart executives scrambled to tighten rules, enforce already present rules and denounce that one manager, their image was already tainted. Stuff like that sticks with the public consciousness for decades.
      • gowld 10y ago
        Walmart is catching up to Amazon on tech, Amazon is catching up to Walmart on reputation
  • hkmurakami 10y ago
    What about Walmart Labs? From what I understand there are some talented folks over there.
    • blackaspen 10y ago
      While there are still a reasonable number of very talented engineers at Labs, having talent is sort of meaningless if you stifle their ability to actually ship (which Walmart at large does very well).
    • DaiPlusPlus 10y ago
• Nacraile 10y ago
  I think Walmart has a good shot at competing effectively, and I hope it does so, because Amazon having a monopoly on online retail is not in my long-term best interests. That said, I don't think they have any sort of clear advantage, for two particular reasons: First, from a technical perspective, they have some serious catching up to do before they can provide the same service level at the same scale. It is not clear from available information that they actually have the required technical competence as an organization. Second, they have to deal with a reputation that's going to keep them out of many consideration sets: from my perspective, at least, Walmart merchandise is universally cheap crap whose low utility and/or high failure rate will end up costing me more in the long run. I don't trust them to quickly and painlessly make things right if an order is broken, disappointing, or missing. In contrast, Amazon has spent years building trust (on the assumption that the short-term cost of this quality of experience is a profitable investment in securing future business). I have yet to encounter an adequate answer to "Why should I bother looking at walmart.com?", which I suspect is true for many others, and which I think is a serious threat to Walmart.
  • HeyLaughingBoy 10y ago
    As a frequent Walmart customer, let me offer a different perspective. Brick & mortar: my fastest route home every day has me driving past a rural Walmart, so even though the selection is not that great, they've become my default grocery store purely through convenience. Cheap shit that doesn't have to last long: I just bought my 7 year-old three long sleeved shirts for $6 total. He'll wear them through the Spring and by Fall will have outgrown them anyway. Convenience: when the store is on my way home anyway, and there's tons of easy parking, it's far easier to shop Walmart than go online to look for something. As a result of this convenience we're now more likely to shop at Walmart.com instead of Amazon.com, I can order online and get free in-store pickup without paying shipping or having a Prime subscription.
    • grogenaut 10y ago
      This is why I get many of my computer parts at Frys because it's on my way home. I still do my research online before going though because they often don't have what I need when it's more esoteric.
• tn13 10y ago
  Walmart can be a distant second to Amazon the way Bing is to Google unless Walmart comes up with something really interesting and innovative.
• ryanSrich 10y ago
  One of the most overlooked aspects to Walmart competing with Amazon is branding. Walmart is "gross". Amazon is hip. I don't see how they fix this in the short term. Long term there are strategies.
• cowardlydragon 10y ago
  Counterpoint: I was in a Walmart in the electronics aisle looking for an HDMI cable. Dude in full hunting regalia spit what I assumed was tobacco on the floor. I went to K-Mart, which was better. K-mart... was... better...
  • petra 10y ago
    HTTP is a great class isolation mechanism.
• problems 10y ago
  Good. I'm just glad there's still some serious competition for these very huge companies.
• homero 10y ago
  I've been using target.com, I get 5% off and free shipping with my red card
• crabasa 10y ago
  Walmart is basically Amazon without AWS. Which, IMHO, means they're going to be hopelessly behind from a engineering and innovation perspective. Amazon is playing a completely different kind of game and I highly doubt Walmart will be able compete long term.
  • Spooky23 10y ago
    The difference is that Walmart is a more sustainable business. Amazon is far more sensitive to interest rates and is 100% dependent on growth to hide the warts associated with the business. At some point they'll need to spin off AWS. Walmart did most of the innovation in the back office space 30 years ago.
• jobu 10y ago
  > My contrarian opinion: Walmart is going to create some hard times for Amazon. That's not going to happen anytime soon. Walmart is trying to offer service like Amazon, but they don't have their shit together enough to succeed at that level. Recently I wanted to buy a new Roku, and the Walmart site said it was available for pickup today nearby store. Great! I can order it and pick it up on my way home. But wait, when I select it and go to checkout, the site now tells me it will be available for pickup in 5 days. WTF Walmart?!! Their site was being stupid, so I decided to just stop at Walmart on my way home and buy it. When I get there I have to spend time to track down an employee, and they have to track down someone with keys to get it out of the glass case. Then I realize their in-store price is $10 higher than online, so I have to wait while they track down a manager. After all that bullshit, the the manager tells me they can't match the price on their own fucking website. I took out my phone and ordered it from Amazon in front of the Walmart manager.
  • deleted 10y ago
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  • eganist 10y ago
    Walmart recently picked up Dan Makoski of Google/Moto/MSFT fame (and most recently at Cap1), so I've got my eyes keenly pointed at what they may end up putting out. Walmart's literally the Fortune One. I wouldn't necessarily count them out quite yet.
  • codedokode 10y ago
    > Then I realize their in-store price is $10 higher than online Isn't that normal? People who use Internet can easily compare prices in different shops so the price for them is more competitive. And people who have already spent their time to get to the shop are not so picky so they can pay more.
    • vidarh 10y ago
      That may be so, but I understood the main issues to be on one side the inconvenience of the whole chain of events, and on the other side the fact that they were unable to price-match their own website.
• whyileft 10y ago
  Considering how there are a lot more Amazon employees here on HN as opposed to Walmart employees, I doubt your contrarian opinion will be particularly well received. Regardless of its merit. Personally, I agree with you, but having a discussion about it here on HN is probably a waste of time.
• Spooky23 10y ago
  Jet has crazy penetration in some locales. I was visiting some relatives in Brooklyn on garbage day -- every house had a bunch of Jet boxes.
• deegles 10y ago
  Wal-Mart only competes with the retail portion of Amazon. My prediction is that by the time Wal-Mart grows large enough to be a competitor (in online sales), Amazon's cloud and devices business will be larger (and more profitable) portions of the company. Amazon could then subsidize retail. Good luck to any retailer wanting to compete with that. :)
• gist 10y ago
  > And Walmart does hav enough capital to compete. Otoh Walmart is much more subjected to the whims of the stock market and their stock price than amazon is. As such they can't afford to take the same risks with capital.
  • petra 10y ago
    That's a good point. But what happens to Amazon's stock when/if Walmart do decide to compete seriously ? it seems more riskier to Amazon.
• fourstar 10y ago
  Jet.com was faking it until they made it. They were basically dropshipping a ton of products. I'm long on AMZN.
• throwawaylalala 10y ago
  I sell on all three. Walmart is a threat to Amazon, but they dont appear to be thinking the same way as Amazon does. I think it's a company culture thing.
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• blazespin 10y ago
  The problem with Walmart is that it makes money and Amazon does not. Unless Walmart is willing to stop making money, they can't compete.
• nessus42 10y ago
  Amazon just has such a huge head start in so many ways, it's difficult to imagine anyone catching up with them anytime soon. For purchasing online, most people just immediately type "amazon" into their web browser. People will never have any reason to do anything differently, unless Amazon starts screwing up the user experience, or becomes significantly more expensive than other online sites. Neither of those things is likely to happen. Suggesting that such things will happen is like suggesting that some other search engine is going to quickly replace Google. I guess all bets are off when one tries to look ten years out–the entire world can change radically in ten years–but personally, I'd bet good money that Amazon and Google will still be the largest players by far for their markets. The more interesting question, I think, is for how long will Amazon maintain its lead in cloud computing. Cloud computing is something of a commodity, so companies will have a great deal of incentive to go with whoever can do it most cheaply. As long as they do it well, that is. I'd still put my money on Amazon.
• foota 10y ago
  It only takes delivering to the ~40 largest metropolitan areas in the US to get to 50% of the population.
• mlkmlksmdf 10y ago
  plot twist: amazon and walmart merge to create walmazon
  • D-Coder 10y ago
    Amamart!
• yomly 10y ago
  I doubt this - Walmart have scale, experience and infrastructure over Amazon but what they're lacking for in these areas, Amazon more than makes up for it in engineering culture. Amazon is first a foremost a data-driven company. Companies say this so much that it's now a cliche, but you better believe it with Amazon. As an exclusively online (until recently) retailer, every single sale goes through their data warehouse. Every single product, price, clicks are all stored - think of the analytical capability of that consolidated store of data. Amazon is probably the singly largest reserve of economics data. Moreover, I am fully certain every one of their products, cars, trucks, planes and even people are hooked up into real-time tracking. When you have that much data all centralised, and the scale of Amazon, real life problems start to resemble CS problems and Fulfillment Centers and logistics start resembling CDNs. If only Amazon has extensive knowledge of the workings of CDNs... oh wait.
  • hueving 10y ago
    >Amazon is probably the singly largest reserve of economics data. Walmart had 4 times the annual sales revenue of Amazon and they store every single transaction as well. They don't have the click data, but they certainly have far more actual purchasing data.
    • yomly 10y ago
      Yes, but click data and search history is all integrated for Amazon and the combination of search, purchase and click is the true value. Not to mention every purchase and visit is linked to an account. [EDIT]not to mention that as an online store Amazon can do all kinds of automated A/B testing in real-time. At best with Walmart, in stores can capture some of this with a loyalty card and credit card.
• yabatopia 10y ago
  Walmart doesn't have a cash cow like AWS. It's like a free money printing press that Amazon can use to fuel its logistics expansion.
  • caminante 10y ago
    A cash cow is something different [0]. AWS requires increasing capex. [0] http://www.investopedia.com/terms/c/cashcow.asp http://www.investopedia.com/terms/c/cashcow.asp
• arjie 10y ago
  No one uses Jet except to take advantage of their ridiculous coupons. Those coupons are just a way to move VC money to the people, so I'm cool with that but otherwise Jet is just rubbish.
• banku_brougham 10y ago
  I know a Sr SDE that left amzn for the web store at Walmart. He came back in a year, said it was a ___-show.
• nick45 10y ago
  No one use jet.com. Their service is horrible
• sumedh 10y ago
  > will Amazon be able to keep it's very high stock price People have been asking this question about Amazon for many years now. I am not saying it wont go down but its a bit tiring hearing the sky is about to fall for Amazon.
• Pxtl 10y ago
  Yup. Amazon's in uncurated listings are getting worse and worse, while Wal-Mart's online shopping offerings are getting better and better. Plus Wal-Mart can offer cheaper shipping with their in-store pickup lockers. They're going to give Amazon a real competitor. Amazon may be getting better at a lot of things, but the actual experience of shopping online with them is getting worse. I search for an item and i get a hellscape of poorly categorized over-MSRP 3rd party sellers.
• didibus 10y ago
  Did you account for AWS in your equation?
• neptunespear 10y ago
  The Walton family represents a lot of what I think is wrong with America. If Sam Walton knew that Walmart pays their employees so little that they have to claim social assistance just to survive, what would he say? While Jeff Bezos isn't an angel, at least he's doing things with his money that I find noble, like Blue Origin and contributing millions to expand the computer science program at the University of Washington I shudder to think of a future where Walmart dominates the tech logistics scene. Might there be a "Committee for a Third Term for Donald Trump" SuperPAC in the future?
  • adventured 10y ago
    They pay a 30% federal corporate income tax rate. Their federal income tax alone covers all the estimated ($6 billion) public subsidies. Walmart has 0.03% net income margins. If you raise the hourly pay for the average Walmart employee, by $3 to $4 per hour, Walmart is bankrupt. Meanwhile Amazon is going to begin substantially digging in to Walmart's sales with their growth. As Walmart's sales begin to contract in the coming years, that will pressure their non-existent margins further. If Walmart raises prices to afford the pay hikes, Amazon will damage Walmart's business that much faster. In the near future, Amazon is likely to rupture Walmart's business in such a fashion as to cause financial losses that cause hundreds of thousands of low skill workers to lose their jobs (with no replacement jobs). Walmart's likely future is to tip over, bleed epic amounts of red ink (they don't even have a large enough cash balance to afford one year in that condition), close hundreds of stores, and fire a million workers. You can either have Walmart employ far too many people as it does now, at low wages (which has the advantage of absorbing vast amounts of low value, low skilled labor). Or you can have Walmart employ far fewer people per dollar of sales, in the model of Costco, and have higher pay. You can't - and will never - have both.
    • tomjen3 10y ago
      Walmark has not had profits of less than 2% in more than a decade: https://ycharts.com/companies/WMT/profit_margin https://ycharts.com/companies/WMT/profit_margin Where are you getting the 0.03% from?
• mabbo 10y ago
  I don't see that as contrary at all. The only real question is whether Walmart can learn how to be a tech company (and innovate as fast as Amazon) better than Amazon can learn to be a full-stack logistics company (and beat Walmart to meet the customers needs).
• latj 10y ago
  Doing 1-day delivery to the majority of your customers in U.S. is easier than you might think-- You just put fulfillment centers within 1 day of the east coast. There's a UPS hub in Louisville and a Fedex hub in Memphis. Those areas are also 1-day to east coast, the rent is cheap, and the locals will give you all sorts of concessions for bringing in jobs. I have seen one Amazon subsidiary that was capable of doing same-day deliver to a large portion of their customers 10 years ago. The trick is to make it cost effective. People pay for different classes of shipping from various vendors-- but getting the order to you as quickly as possible isnt the most profitable way to do business. There are sweat spots where they minimize the cost of shipping but its still "fast enough". Take for example shipments out of the continental U.S.. Every carrier has ways to pool packages in ways that make them cheaper to ship. The shipping still costs you the same, but it'll arrive later. Most of the time you'll be fine with waiting. The times you're not you'll complain and they'll upgrade shipping.
  • DrScump 10y ago
    a Fedex hub in Memphis BTW, that was the original FedEx hub. Back in the early 1980s (at least), every FedEx overnight package went through Memphis, even if shipper and destination were on the same coast as each other.
• kuschku 10y ago
  > My contrarian opinion: Walmart is going to create some hard times for Amazon. Not just Walmart. In Germany, Amazon actually reduced their reliance on DHL, UPS and DPD... by contracting out almost their entire logistics to Hermes. If you've never heard of it, Hermes Logistics belongs to the OTTO Group, Europe's largest online retailer group (you likely don't know them, but basically every store contracts out their online shops to OTTO, and OTTO also has their own shops) It's interesting when even Amazon contracts out their entire logistics to a competitor.
• jjallen 10y ago
  Walmart had enough capital to compete fifteen years ago too, and they chose not to seriously compete then as they are now. Walmart is a perfect example of the difficulty of a business not disrupting itself. They could have caught up perhaps five years ago, but not now. Here's the thing: the family still controls it. They are billionaires many times over. To seriously compete with AMZN would take many billions a year, many years in a row, and frankly, you need a guy like Bezos who just doesn't care about anything besides winning. Walmart has had nothing of the sort and the focus on their physical store base was a major distraction during the time they could have caught up. There's obviously TONS of tech involved in AMZN's retail operations, and WMT will simply never be able to hire as many or the same caliber as AMZN can (despite AMZN's poor employer reputation) Not to mention the fact that their CEOs are concerned about the stock price a few years from now from their RSUs or stock options, and massive e-commerce investments would certainly drive EPS and/or the dividend down which is basically how Walmart is valued in the public market. The culture, just everything is different and superior at AMZN. My impression of Walmart is forever tainted by the few recent store experiences I've had. They have no idea where or if inventory is in the store and no one wants to help you find it if so. The last few Walmarts I've been to have had rusty shopping carts that barely roll. And that was in Palo Alto, which has to have much higher incomes than average. Amazon now has the advantage that the freight train that is FBA has started rolling and just won't stop for a very long time. AWS operating income and FBA fees subsidize their own retail gross margins, which would make it even hard for WMT to compete. And good luck getting your marketplace partners to deliver as on-time and reliably as AMZN already has gotten theirs to. Walmart has mid single-digit operating profit margins (profit before taxes and interest). That makes every 1% price reduction (if they were to seriously compete on price) reduce their profit by 15-20%!
• wmeredith 10y ago
  Amazon also has a big branding problem now that they've let their shelves be flooded with counterfeits propped up by garbage reviews.