Walmart Spikes, Is Amazon Doomed?
The Market Ticker - Commentary on The Capital Markets
2017-10-12 07:00 by Karl Denninger
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Walmart Spikes, Is Amazon Doomed?
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Walmart has said they expect a 40% e-commerce increase (in dollar terms) over the next 12 months.

Here's my view on them vis-a-vis Out-Amazoning Amazon: Amazon is in trouble.  Serious trouble.

WalMart has done a lot with their online presence of late.  Further, and far more importantly, they do not charge a "subscription fee" for some "premium" tier such as Amazon does with Prime.

Why is this important?  Several reasons:

1. Walmart now handily beats Amazon for a lot of products when it comes to price.  In fact if you don't check Walmart's online listing before ordering from Amazon you are a fool and almost-certain to overpay.  It's that blatant now, and has been getting more-so over the last few months.

2. You need buy no special plan to get free delivery.  You can, as with Amazon, get free delivery to your house if you have a modest amount spent in one transaction.  However, you can also get free delivery to any of WalMart's stores irrespective of the amount of the transaction and typically the product is there in 2-3 days -- in other words, just as fast as PRIME.  WalMart will hold it at their customer service desk for about a week and you can come get it at your leisure.

Since nearly everyone in the US is within 10-15 minutes of WalMart by car and most people do stop in once a week or so this means that not only is Walmart's online presence simpler to deal with (no worries about someone picking off your package off the porch while you are at work, etc) there is no membership fee either to obtain reasonably-fast delivery.  If you do not buy PRIME Amazon will sit on an order for as much as a week (probably to both aggregate their shipments internally and try to coerce you out of $100) where WalMart instantly dispatches the product to the store you choose.

This feature also works really well if you're traveling; you can order something and have it sent to any of their stores, anywhere, and pick it up on your trip.  If something goes wrong and you don't pick it up they'll automatically return it and credit your card after a week or so of it sitting at the store unclaimed.  Try that with Spamazon, Prime or no.

Next up Walmart has announced that they intend to make returns of their internet purchases zero hassle (requiring just seconds) at any of their stores.  That's a huge win over returning something via Amazon where you typically have to go to a UPS retail outlet or similar to drop it off and deal with printing their return label.  In this case just take it with you the next time you go to Walmart, check it back in at the store and it's done.

Will this destroy Amazon's e-commerce game?  No, but it's sure as hell going to dent it.  In short Walmart has upped their game when it comes to internet commerce massively over the last year or so while Amazon has done nothing other than raise the price of Prime over the last few years.

Spamazon's acquisition of Whole Paycheck does nothing to help, since the density of Whole Paycheck outlets is both insufficient and too-concentrated in yuppie areas to make a material contribution to their distribution pipeline.

Walmart, on the other hand, is leveraging what they already have which makes their improvement in the customer experience near-zero in additional cost to them.

Walmart one, Amazon gooseegg.

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