In the U.S. retail industry, by far the biggest names are Walmart and Amazon. Yet, these are big names for very different reasons. Walmart is at the top because of the brick-and-mortar presence they have with thousands of U.S. outlets. Amazon is huge for precisely the opposite reason. For Amazon, it is their virtual (i.e., online) and not physical presence that has brought them to a commanding retail position.
In many ways, these two retail giants are pulling on different sides in a tug-of-war that will shape the future of retailing. On Walmart’s side are traditional store-based retailers that feel the customer experience takes place best when they can interact directly and face-to-face with the customer. These retailers believe connecting with customers on a personal level is the key to forming long-term customer relationships.
Amazon sees the world in a much different light. Amazon and other online-only retailers feel there are important aspects of customer shopping that cannot be learned by simply talking with a customer while they are in a store. Instead, for them, relationships can be built just as well, if not better, with advanced computer technology that continually monitors shoppers’ online activity. These technologies are adept at learning customers’ needs and, consequently, sending shoppers useful information to help make purchase decisions.
It would now seem that following the 2015 holiday selling season the center of the tug-of-war has now shifted a little more to the side of online retailing. As discussed in this USA Today story, despite what is generally considered to be a strong U.S. economy, Walmart has announced it is closing over 260 stores worldwide and over 100 in the U.S. While the store closings are getting the big headlines from the announcement, it should be noted that Walmart still plans to build nearly 300 new stores in 2016, so there will not be a major change in the number of outlets. However, the company makes clear online sales is where the future lays. This includes direct to home shipment, and orders placed online and picked up at the store.
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