There was once a time when Walmart and Amazon grew simultaneously, serving different demographics and merchandising needs. There was no real concern for the mega brick and mortar retailer to fear the dominance of the web and a huge online competitor like Amazon. Currently, Walmart's dominance is faced with a shift in trends. First, the discount store's traditional customers, bargain hunters making less than $50,000 a year, are becoming more tech-savvy. Secondly, as the recession subsides, more affluent shoppers who began frequenting Walmart during hard times are returning to Amazon.
Further analysis from the San Francisco Chronicle also shows that Amazon has moved into merchandise categories similar to Walmart's current offerings, from diapers to vacuum cleaner bags. According to research firm Kantar Retail, "In its last fiscal year, Amazon posted 41 percent revenue growth, to $48.1 billion, while Walmart saw just eight percent growth. The chain's 2011 online sales amounted to less than two percent of its $264 billion in U.S. revenue." To combat the inevitable, Walmart has increased its investment in online business, spending more than $300 million to acquire five tech firms since May 2010. There are also plans for a program that will allow the 20 percent of Walmart customers without credit cards or bank accounts to make purchases online. Walmart is prepared for battle with its web based shopping tactics.
This article is adapted from a piece by the San Francisco Chronicle.
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