Walmart and Amazon’s convergence

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Once upon a time Walmart was the world’s largest retailer because of sales at its thousands of brick-and-mortar stores, and Amazon was a completely different kind of company specializing in something called e-commerce.

Recent moves by both companies make it clear just how long ago that was, and emphasize the extent that the two leviathans — and everyone else in the retail industry — are in the same ever-evolving business, chasing after the same restless customers.

Walmart acknowledged in late August that it was teaming up with Microsoft in an effort to acquire the U.S. operations of TikTok, a social media app popular with teenagers and owned by a Chinese company.

The effort may have been puzzling for anyone who knows TikTok for its short lipsyncing and dancing videos. But of course Walmart was more interested in the way social media platforms in TikTok’s home country of China are also popular e-commerce destinations. Douyin, the Chinese version of TikTok, allows its users to buy products after seeing short videos demonstrating their use. Already there are influencers who use the U.S. version of TikTok to direct viewers to sites where they sell products that their videos promote.

TikTok also happens to be popular with the young people who will be the mainstream shoppers of tomorrow.

Just days after that acquisition effort officially went public, Walmart announced that it was starting a membership program called Walmart+. Taking a page from the playbook of Amazon, which launched its Amazon Prime service in 2005, Walmart is aiming to lock in customers with perks like unlimited free delivery, discounts on fuel purchases and a faster in-store shopping experience via its Scan & Go app.

Membership, available to Walmart customers beginning on September 15, will cost $98 a year or $12.95 a month.

Amazon made a few announcements of its own at about the same time. The company opened its first Amazon Fresh grocery store concept in the Los Angeles neighborhood of Woodland Hills, Calif., The new store — one of seven the company is developing in Southern California and greater Chicago — features high-tech Amazon Dash shopping carts that automatically track what customers purchase and bill them for it automatically, and stations where shoppers can interact with Amazon’s Alexa virtual assistant to get help in finding the products they want.

The company also launched Amazon Halo, a health and wellness device and service designed to leverage data collected by a wrist band to suggest and support healthier habits. The Halo device looks at first glance like a smart watch without a face. But if it proves popular it could help make Amazon a bigger player in the consumer health space, building on the efforts the company is making with its PillPack by Amazon Pharmacy service, and initiatives like its health care pilot with Crossover Health.

Then there are the drones. Late last month Amazon received Federal Aviation Administration approval to use its fleet of Prime Air drones to deliver packages. Such buzzing deliveries are not imminent yet — the company is still testing the technology. But Amazon keeps pushing to make delivery ever faster, even as it opens brick-and-mortar stores for those who want them.

However these developments pan out, it’s clear that the bar in retail is getting higher at an accelerating pace.



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