The Strategic Advantage: Walmart and Amazon

The Strategic Advantage: Walmart and Amazon

The digital commerce landscape continues to boom in 2024, with ecommerce sales in the US alone surpassing $1 trillion. Amazon and Walmart are the dominant players, offering incomparable opportunities for businesses to maximize reach and capture a significant share of this market. Both platforms appeal to similar customers, particularly in categories such as clothing, beauty, personal care, and groceries. It makes sense, then, for businesses to leverage and understand the unique advantages of each and embrace a dual-platform strategy for a well-rounded approach to ecommerce.

RT7 Digital, a specialized full-service Amazon marketing agency, recognizes the case for selling on Amazon and Walmart for ecommerce success. It is expanding its reach into the USA, strategically collaborating with Rise Digital, Walmart’s US partner. Head of Operations for RT7 Digital, Onno Huyser, shared, “The benefits of trading on both marketplaces means that businesses can minimize risk and, to some extent, diversify their customer base. Each platform offers distinct advantages, providing a global reach for product exposure. Diversification is essential in today’s market for sustained growth, helping to reduce vulnerability to market fluctuations and competitive pressures, providing a more stable foundation.”

The Power of Dual Platforms

Amazon boasts $575 billion in annual sales. Walmart generates $100 billion in online sales with the potential to tap into its extensive $600 billion+ in-store business. Together, these platforms command over $1 trillion in sales, allowing brands to expand their reach and grow. 

The complementary nature of trading on both Walmart and Amazon means businesses can optimize and harness the strengths of each platform. 

Amazon: The eCommerce Powerhouse

Amazon offers a high sales volume, albeit with potentially lower profit margins due to intense competition. Conversely, Walmart provides a more profitable environment with lower competition, especially in its ecommerce phase. By balancing these dynamics, businesses can achieve a synergistic effect, boosting revenue and profitability.

Amazon’s dominance remains a formidable force, with a growth rate of 12% year-on-year. Notably, 51% of shoppers begin their product search on Amazon, highlighting its critical role in the consumer journey. This vast search volume translates into significant business exposure, making Amazon a priority platform for brands. However, this maturity brings intense competition, often resulting in profit pressures. The high levels of competitiveness can make it challenging to maintain profitability. Still, the potential for high sales volumes can offset these pressures. 

Amazon’s ecosystem is designed to support high-volume sales. From its efficient logistics network to its sophisticated advertising platform, Amazon provides businesses with the tools to scale quickly. By leveraging these tools effectively, businesses can drive significant traffic to their products and convert that traffic into sales.

Walmart: The Retail Giant Embracing Digital Transformation

With over $600 billion in revenue across 11,000 stores spanning 25 countries, Walmart is making substantial investments in ecommerce and omnichannel business. Following Amazon’s blueprint, Walmart is in the early stages of its digital transformation, creating a relatively low-competition environment compared to Amazon. With $100 billion in ecommerce sales – 15% higher than Amazon UK and Amazon Germany combined – Walmart’s digital growth trajectory is one to watch closely.

Walmart’s commitment to digital innovation is evident in several key areas. The company is leveraging its vast network of physical stores as micro-fulfilment centres, driving efficiency and reducing delivery times. Additionally, Walmart offers grocery pickup and delivery services, enhancing customer satisfaction and loyalty. Walmart+ members spend more time and money and further expand the company’s digital reach.

Moreover, Walmart’s focus on its Retail Media Network, Walmart Connect, provides unique opportunities for sellers to stand out through optimized advertising and search visibility. This network enables businesses to target their advertisements more precisely, ensuring that their products reach the right customers at the right time.

Discoverability and Conversion

Success on both platforms hinges on product discoverability. Optimized content is crucial for standing out among millions of listings. This involves more than just having detailed product descriptions. It requires a strategic approach to keyword usage, high-quality images, and engaging product titles. On Amazon, this means ensuring your products appear in relevant search results and are enticing enough to convert views into sales. For Walmart, leveraging its unique search algorithm ensures maximum exposure and visibility.

Businesses must continuously monitor and adjust strategies based on performance data to remain competitive in an ever-changing marketplace. Focusing on content and discoverability helps achieve higher rankings and increased sales on both platforms.

The collaboration between RT7Digital and Rise Digital opens new avenues for businesses to expand their reach and grow their market presence. By trading on both Walmart and Amazon, businesses can achieve a diversified, resilient, and highly profitable digital commerce strategy. As the retail landscape shifts towards online and omnichannel models, now is the perfect time for businesses to seize these opportunities and elevate their digital commerce game.