Executive Briefings

How Can a Merged-Channel Retailer Beat Pure-Play E-tailer Like Amazon at E-commerce?

After some 19 years of struggling with e-commerce, Walmart is once again learning that managing a merged channel retail strategy is almost never going to beat a well-run pure play e-tailer like Amazon when it comes to online sales.

How Can a Merged-Channel Retailer Beat Pure-Play E-tailer Like Amazon at E-commerce?

A reminder of this point came courtesy of a wonderful stat in a Wall Street Journal story, which compared Amazon and Walmart's supply chain costs: "Wal-Mart's online shipping can cost $5 to $7 per parcel, while Amazon averages $3 to $4 per parcel, analysts say"”a big difference considering some of Wal-Mart's popular purchases are low-cost items like $10 packs of underwear."

There are many factors behind those numbers, but it really comes down to the fact that Walmart's massive global supply chain needs to support more than 4,000 physical stores"”a feat that Amazon need not worry about.

Given that huge physical burden, Walmart's costs are quite impressive. But no one ever said that fighting against a pure play was particularly fair.

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Keywords: value chain, supply chain management, retail supply chain, e-commerce fulfillment costs, online retailing, e-tailing

A reminder of this point came courtesy of a wonderful stat in a Wall Street Journal story, which compared Amazon and Walmart's supply chain costs: "Wal-Mart's online shipping can cost $5 to $7 per parcel, while Amazon averages $3 to $4 per parcel, analysts say"”a big difference considering some of Wal-Mart's popular purchases are low-cost items like $10 packs of underwear."

There are many factors behind those numbers, but it really comes down to the fact that Walmart's massive global supply chain needs to support more than 4,000 physical stores"”a feat that Amazon need not worry about.

Given that huge physical burden, Walmart's costs are quite impressive. But no one ever said that fighting against a pure play was particularly fair.

Read Full Article


Keywords: value chain, supply chain management, retail supply chain, e-commerce fulfillment costs, online retailing, e-tailing

How Can a Merged-Channel Retailer Beat Pure-Play E-tailer Like Amazon at E-commerce?