The world’s biggest online store is run by Amazon and it has exceptional shipping service. A Prime Member can buy from thousands of retailers the same day or next day at the latest and get free shipping. If the customer orders from a local Whole Foods shop Amazon delivers groceries to doorstep within two hours. It does wonders for the brand but it costs billions of dollars as the rise in shipping costs has shown no signs of stopping.
Amazon is thus expected to spend a record $11 billion on shipping this quarter and it is a growing problem for Amazon. Its mega store is losing money on most sales and thus US’ biggest grocery chain is charging headfirst into online retail.
On the contrary, Walmart’s footprint is so big that 90% of Americans live within 10 miles of a Walmart store. Since 2016 Walmart’s online sales have gone up by 78% and their online sales are now growing twice as fast as Amazon’s. Since last March, Walmart stock has beaten Amazon’s return by 30%. It is already the world’s third-largest online stores and operates 150+ distribution centers across America. Plus the brand runs 4,789 stores in 49 states.
No online retailer has been able to match Walmart’s logistics network. Walmart’s former Chief Technology Officer Jeremy King has revealed how Walmart is leveraging its physical footprint to charge ahead of Amazon. Walmart is using the physical stores as warehouses for online sales. As stores are already turning a profit from grocery sales, maintaining extra warehouse space adds little to the complete costs meaning Walmart will soon be the biggest and most effective shipping network in the US whereas Amazon has only 110 warehouses across the US.
