The battle between Wal-Mart Stores, Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN) is heating up in the e-commerce sector. While the online retailer is enjoying the supremacy over others, the biggest chain of retailers is bent on giving a tough competition to the company. However, it is also a good thing for the consumers, who will be the ultimate beneficiary of any cost advantage or the service.
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Massive Deals Day
For instance, Amazon.com, Inc. (NASDAQ:AMZN) has made its intention of holding Prime Day on July 15 offering big deals. The online retailer promised that it will feature higher sales than the Black Friday. However, the deal is limited to its Amazon Prime program members only. The program charges $99 a year for free two-day shipping on a number of items.
That forced Wal-Mart Stores, Inc. (NYSE:WMT) to come up with a different tactics. The largest chain of retailer in the world said that the company was rolling back is free-shipping to a minimum of $35 from the earlier $50. On top of this, the retailer indicated that there will be some ‘special atomic deals’. The company also did not forget to criticize the online retailer for providing access to only those who paid $100. The CEO of wal-mart.com, Fernando Medeira, said that paying extra to save money will not help the customers.
Counter Attack
Wal-Mart Stores, Inc. (NYSE:WMT) also indicated that its shoppers would be able to witness thousands of fresh deals on the ‘rollback’ day on Wednesday. The term is used for slashing the prices. Following the biggest retailer’s post, the online retailer has also chosen to counter attack.
Amazon.com, Inc. (NASDAQ:AMZN) has blamed the biggest retailer for charging higher prices for the items available in their physical stores compared to the price available through online for the same items. Others in the retail sector are also offering special day like Black Friday in July to attract sales. However, the battle between the biggest physical and online retailer will be keenly watched.
Wal-Mart Stores, Inc. (NYSE:WMT)
Wal-Mart Stores, Inc., incorporated on October 31, 1969, is engaged in the operation of retail, wholesale and other units in various formats around the world. The Company offers an assortment of merchandise and services at everyday low prices (EDLP). The Company’s operations are conducted in three segments: Walmart U.S., Walmart International and Sam’s Club. The Walmart U.S. segment operates retail stores in all 50 states in the United States, Washington D.C. and Puerto Rico, with three primary store formats, as well as digital retail. The Walmart International segment consists of operations in 26 countries outside of the United States and includes numerous formats divided into three main categories: retail, wholesale and other. The Sam’s Club consists of membership-only warehouse clubs and operates in 48 states in the United States and in Puerto Rico, as well as digital retail.
Walmart U.S.
The Walmart U.S. segment is a mass merchandiser of consumer products, operating under the Walmart or Wal-Mart brands, as well as walmart.com. The Walmart U.S. segment operates retail stores in the U.S., including in all 50 states, Washington D.C. and Puerto Rico, with supercenters in 49 states, Washington D.C. and Puerto Rico, discount stores in 42 states and Puerto Rico and Neighborhood Markets and other small store formats in 31 states and Puerto Rico. Its supercenters range in size from 69,000 square feet to 260,000 square feet, with an average size of approximately 178,000 square feet. Its discount stores range in size from 30,000 square feet to 219,000 square feet, with an average size of approximately 105,000 square feet. Its neighborhood Markets and other small formats range in size from 1,000 square feet to 66,000 square feet, with an average size of approximately 37,000 square feet. Access to an assortment of merchandise, including products not found in its physical stores, and services are available to its customers through its e-commerce Websites and mobile commerce applications. Digital retail is integrated with its physical stores through services like Walmart Pickup and Pickup Today. The Walmart U.S. segment also offers digital services like Vudu and InstaWatch.
Walmart U.S. does business in six strategic merchandise units, grocery, entertainment, health and wellness, entertainment, hardlines, apparel and home. Grocery consists of a line of grocery items, including meat, produce, deli, bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, floral and dry grocery, as well as consumables, such as health and beauty aids, baby products, household chemicals, paper goods and pet supplies; Health and wellness includes pharmacy, optical services, over-the-counter drugs and clinical services; Entertainment contains electronics, toys, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid service, movies, music, video games and books; Hardlines consist of stationery, automotive, hardware and paint, sporting goods, fabrics and crafts and seasonal merchandise; Apparel includes apparel for women, girls, men, boys and infants, as well as shoes, jewelry and accessories, and Home includes home furnishings, housewares and small appliances, bedding, home décor, outdoor living and horticulture. The Walmart U.S. segment also offers financial services and related products, including money orders, prepaid cards, wire transfers, money transfers, check cashing and bill payment.
Walmart International Segment
The Walmart International segment consists of operations in 26 countries outside of the United States and includes numerous formats divided into three categories: retail, wholesale and other. These categories consist of numerous formats, including supercenters, supermarkets, hypermarkets, warehouse clubs, including Sam’s Clubs, cash & carry, home improvement, specialty electronics, restaurants, apparel stores, drug stores and convenience stores, as well as digital retail. The Walmart International segment consists of physical stores operated by its wholly-owned subsidiaries operating in Argentina, Brazil, Canada, Chile, China, India, Japan and the United Kingdom; its majority-owned subsidiaries operating in Africa (which includes Botswana, Ghana, Lesotho, Malawi, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda and Zambia), Central America (which includes Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua), China and Mexico, and its joint ventures and other controlled subsidiaries in China. Its retail units range in size from 4,000 square feet to 250,000 square feet. Its wholesale stores generally range in size from 35,000 square feet to 70,000 square feet. Other, which includes restaurants, drugstores and convenience stores operating under various banners in Brazil, Chile, Japan, Mexico and the United Kingdom, range in size up to 4,200 square feet. Also, on a limited basis, its Walmart International segment operates banks that provide consumer financing programs.
The Walmart International segment operates e-commerce Websites in 10 countries (Argentina, Brazil, Canada, Chile, China, India, Japan, Mexico, South Africa and the United Kingdom). Customers have access through its e-commerce Websites and mobile commerce applications to an assortment of merchandise and services, both of which vary by country. Digital retail supports its physical stores with capabilities like Click & Collect in the United Kingdom and its grocery home delivery business in Mexico. The Company has both leveraged United States private brands and developed market specific private brands to serve its customers. Along with the private brands it markets globally, such as Equate, George, Great Value, Holiday Time, Hometrends, Mainstays, Ol’ Roy and Parent’s Choice, its international markets have developed market specific brands including Aurrera, Cambridge, Chosen by You, Extra Special and Smart Price.
Sam’s Club Segment
The Sam’s Club segment operates membership-only warehouse clubs, as well as samsclub.com, in the United States. As a membership-only warehouse club, Sam’s Club facility sizes generally range between 71,000 and 190,000 square feet, with an average size of approximately 134,000 square feet. Sam’s Club provides its members access to a broad assortment of merchandise and services online at www.samsclub.com. Digital retail supports its clubs and members through services such as Club Pickup. Sam’s Club offers brand name merchandise, including hardgoods, some softgoods and selected private-label items, such as Member’s Mark and its own brands, Daily Chef and Simply Right, in five merchandise categories: Grocery, Fuel and other, Home and apparel, Technology, and Health and wellness. Grocery and consumables includes dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, health and beauty aids, paper goods, laundry and home care, baby care, pet supplies and other consumable items; Home and apparel includes home improvement, outdoor living, grills, gardening, furniture, apparel, jewelry, housewares, toys, seasonal items, mattresses and small appliances; Technology, office and entertainment includes electronics, wireless, software, video games, movies, books, music, office supplies, office furniture, photo processing and third-party gift cards, and Health and wellness includes pharmacy, optical and hearing services and over-the-counter drugs. The Sam’s Club segment also offers small business services and related products, including affordable health care plans through the Aetna Marketplace for Sam’s Club, legal solutions from LegalZoom, as well as payroll services, merchant payment processing, and travel booking provided by third-parties.
The Company competes with Costco Wholesale and BJ’s Wholesale Club.
Amazon.com, Inc. (NASDAQ:AMZN)
Amazon.com, Inc. (Amazon.com), incorporated on May 28, 1996, is an e-commerce company. The Company offers a range of products and services through its Websites. The Company’s products, offered through consumer-facing Websites, include merchandise and content that the Company purchases for resale from vendors and those offered by third-party sellers. The Company offers its own products as well as third-party products across various categories, through its retail Websites and through its mobile Websites and applications. It also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Echo and Fire phones.
The Company offers programs that enable sellers to sell their products and fulfill orders through the Company’s Websites and the sellers’ own Websites. It serves developers and enterprises of various sizes through Amazon Web Services (AWS), which offers a set of global compute, storage, database, analytics, applications and deployment services. It serves authors and independent publishers with Kindle Direct Publishing, which is an online platform that lets independent authors and publishers choose a 70% royalty option and make their books available in the Kindle Store, along with Amazon’s own publishing arm, Amazon Publishing. It also offers programs that allow authors, musicians, filmmakers, application developers and others to publish and market content.
Amazon.com operates in two segments: North America and International. The North America segment of the Company focuses on retail sales earned through North America-focused Websites. The International segment focuses on the Company’s operations done through its international Websites. The Company’s retail Websites include www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es, www.amazon.com.br and www.amazon.mx. The Company through its Websites offers products under various categories, including instant videos, digital music, Appstore for Android, Amazon Cloud Drive, Kindle E-readers and books, FIRE tablets, FIRE TV, FIRE phone, books and audible, movies, music and games, electronics and computers, home, garden and tools, beauty, health and grocery, toys, kids and baby, clothing, shoes and jewelry, sports and outdoors, automotive and industrial, and credit and payment products.
North America
The North America segment of the Company is engaged in the retail sale of consumer products, including from sellers.Amazon.com also offers digital content subscriptions through North America-focused Websites, such as www.amazon.com and www.amazon.ca. The segment also includes the operations of AWS. The North America segment includes export sales from www.amazon.com and www.amazon.ca.
International
The International segment of the Company is engaged in the retail sale of consumer products and digital content subscriptions through internationally focused Websites. The International segment includes export sales from these internationally based Websites (including export sales from these sites to customers in the United States and Canada).
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