
Walmart Has Made a Genius Move to Beat Amazon - kkcorps
https://www.forbes.com/sites/stephenmcbride1/2020/01/08/walmart-has-made-a-genius-move-to-beat-amazon/
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mswehli
I mean, they talk about Walmart like it's the underdog, but its revenue is
twice as large as Amazon's (despite its market cap being much lower). While
Walmart is much better at sales via physical stores and Amazon is better at
online sales, and while Walmart is investing in heavily in it's online
platforms, Amazon is investing heavily in in physical stores. So i don't think
it's Walmart vs Amazon, it's Walmart and Amazon versuses everyone else.
They're both building themselves up to be equal competitors in most ways,
leaving everyone else behind.

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brudgers
The problem for Amazon is that physical retail comes with higher costs and
lower returns than its traditional business. Essentially Amazon is chasing
diminishing returns and Walmart is chasing increasing returns. I'd put it this
way, online sales increase Walmart's revenue per square foot and retail stores
decrease Amazon's revenue per square foot because prime retail space is
expensive. Even if Amazon builds out a retail store network, Walmart's basis
will generally be much lower because it bought its real-estate long ago.

An anecdote to put Walmart's lead in perspective. In the early 1990's, I
worked for a subcontractor on one of Walmart's distribution centers. More than
a million square feet in a cow pasture strategically between Tampa, Orlando,
and Ocala. Walmart probably acquired the land during the S&L crisis when
_commercial_ real-estate prices cratered. If Walmart floated a thirty year
note, the title would be just about clear now. In the interim, the markets the
distribution center could serve have grown massively. But the way real-estate
works means that there aren't any better physical addresses than there were
back then.

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mimixco
This is truly brilliant and an example of using your core competency to
compete better. Wal-Mart made it where they are today by vastly improving
logistics. Headquarters knew when one tube of toothpaste left a store before
Amazon even sold toothpaste. I think this idea could keep Wal-Mart in the game
for a long time.

