Compare the role of grocery sales in amazon and Walmart business strategies

Answer:
Groceries are an important purchase category, representing $800 billion in U.S. sales.U.S.
grocery sales could grow fivefold over the next decade.

Amazon: Amazon is an online retailer (e-commerce) which has own inventory and also
provides a platform to third-party retailer. Amazon is a master at providing what’s known as
“consumer convenience”.

Features of Amazon grocery sales:

1. Amazon can continue its grocery sales online but it can also provide the customer
experience of shopping for food in person
2. Amazon is trying to open warehouses near to customer so it can deliver its product very
fast.
3. Amazon whole food stores will bring amazon physically closer to its customers, this
stores will also use for returning the online orders.
4. With the help of amazon and whole food deal, customers can order fresh foods,
seafood’s, meats, flowers, baked goods, and dairy products for delivery, with items
arriving at their door step within two hours.
5. Amazon extended its 5% cash-back benefit to prime members shopping at whole foods
with the amazon prime rewards visa card.

Walmart: Walmart is a retail (brick and mortar) company that operates physical retail stores,
super-centers, warehouse clubs, and also has a website. Grocery accounts for 56% of Walmart’s
total sales and grocery shopping is a major driver of store traffic and customer loyalty.

Features of Walmart grocery sales:

1. Walmart has invested and tested in click and collect programs, stand alone grocery pick-
up sites, and scanning and paying for items with smartphones.
2. Online grocery sales were a key part of Walmart’s e-commerce sales growth.
3. Walmart’s rollout of curbside grocery pickup, now available in 1200 stores and adding an
additional 1000 this year.
4. Walmart has introduced services that allow delivery people to enter homes and leave
packages inside.
Amazon:

- Amazon would like to have a more formidable physical presence as well as online.

- Amazon and whole foods are integrating their point of sale systems to enable more of
Amazons brands to be available at whole foods, and vice versa.

- Amazon go grocery and amazon fresh is also a site where people can buy groceries and
this sites are also owned and operated by Amazon.

[ In 2017, Amazon acquired Whole Foods Market for us $13.4 billion, which
substantially increased its footprint as a physical retailer]

Walmart: Walmart is the largest seller of groceries in the united states.

- Grocery accounts for 56 percent of Walmart’s total sales, and grocery shopping is a
major driver of store traffic and customer loyalty.

- The move into home delivery will help get more of Walmart’s in store shoppers to start
buying online as well, where they spend twice as much.

Both amazon and Walmart introduced this service that allow delivery people to enter
home and leave their package inside.

Business model and business strategy of Amazon & Walmart:

Amazon Walmart

Walmart derives 99.5% of its

revenues from store sales and
0.5% from memberships &
other sources. Store sales
Business Model comprises of Product &
Amazon derives revenue from direct selling Services. Product consists of
of products, commission from 3rd party Grocery, Health and wellness,
sellers who use Amazon's platform and Entertainment, Hardware
finally from memberships from its Prime supplies, Apparel, and Home
program. products.
 The strategy is to offer superior customer
experience & assortment of products which
Business Strategy will drive more traffic to the platform, this
increased traffic acts as an incentive for
sellers to sign up on the platform to offer
their products and add to the assortment,
which in turn attracts more customers. This
acts as a virtuous cycle.
Walmart business strategy is
now being led by four pillars:
(a) Lead on Price (EDLP)
(b) Improve shopper's access
to stores
(c) Competitive assortment
(d) Great shopping experience