Quote:
Originally Posted by rcentros
What makes you think Walmart and Kroger (and others) aren't upgrading their technology as well? Walmart.com is building (or has built) huge distribution centers (just like Amazon) in several locations. That's so they can compete with Amazon on Amazon's "home turf." Meanwhile Amazon's move into B&M puts them in Walmart's wheelhouse. And Walmart is pretty good at B&M.
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But Amazon isn't playing in WalMart's territory.
They are purposefully avoiding it.
Walmart doesn't own all B&M nor do they compete with everybody and everything. Neither does Amazon.
Walmart doesn't even compete much with Whole Paycheck.
The retail world isn't one vast lumpen proletariat. It is a collection of markets, each segmented by income, expectations, and location.
Walmart has their "wheelhouse", Amazon has theirs. So does Zara, and Target, and Best Buy, and Home depot. Some overlap, some don't. Some are low margin (books!) and some are high margin (luxury goods).
Amazon got their start in books but they have long since moved past that.It's a legacy business at this point. A drop in the bucket but a drop nonetheless. Its a steady, low-maintenance, mostly flat revenue stream. As long as it's low maintenance, they'll keep at it: low maintenance justifies low margin.
B&M is anything but low maintenance so it doesn't make sense to go after the low end today unless you already have a giant presence. Amazon's presence is low so going higher end makes more sense.
Note that Walmart for years has been trying to move upscale with little success so they've resorted to buying niche players. That is expensive market share they're buying.
If Amazon wanted to, they could go out and buy out any of several established chains. A trillion buck market cap goes a long way. But that too is expensive market share. They're in no rush after buying the modest Whole Foods chain so it makes more sense to grow slowly and, ahem, organically.
Let Walmart make their rush catchup moves. Amazon is still growing faster. Plus, again,
retail is but a part of the Amazon Consortium. Their big money comes from AWS and soon, Lab126. That is why the stock keeps rolling merrily along. Bookshops and gift shops are doodling on the margins. Side bets.
When Walmart and co get into the tech business, say building robots, that's when they'll
be encroaching on Amazon turf. Untik then, they're still playing last century retail games while Amazon keeps playing the ecosystem game with Prime and Alexa.