There are many reasons to consider Walmart stock to add to your investment portfolio including the fact that it’s a well established company with over $400 Billion in sales last year alone. Considering that they now have over 4,600 stores, there’s a good chance that there’s a store within a short drive from your home and they keep on building new locations.
We all have been to Wal-Mart before haven’t we? Some love the experience and tout the store as having the lowest prices, while other claim they go site seeing at Wal-Mart for odd looking people. Whatever your opinion is of the store, there are two things that can’t be debated. 1. Wal-Mart has the lowest prices out of any Omnichannel retailer/e-tailer and 2. Wal-Mart’s application and e-commerce experience are amazing
Compare Wal-Mart to Amazon?
Why do investors feel the need to compare Wal-Mart to Amazon (NASDAQ:AMZN)? I am not certain. Amazon is a behemoth, that operates in every industry imaginable. Amazon seeks to invest every dollar it has ever earned. While Wal-Mart has decided to return much of the profits to shareholders.
Amazon’s e-commerce business is its least profitable, yet it makes up the majority of its revenues. In 2016 alone, Amazon did $93B in online retail sales! But, by 2022, analysts expect that just 17% of retail sales will be done online.
Wait a second…If I am not mistaken that leaves 83% of retail sales to be done in stores? This means there are still tremendous value in retailers, and many people still prefer to shop in stores.
We should compare Wal-Mart to Costco, Target, and Dollar General Instead:
When you begin to look at Wal-Mart in a different light, against traditional retailers, it begins to look very appealing. Unlike Costco (NASDAQ:COST), Target (NYSE:TGT), and Dollar General (NYSE:DG), Wal-Mart has a seamless Omnichannel experience. Don’t believe me? Go ahead, order on the Wal-Mart application. I dare you! Compare it to Amazon. Now try the same thing with Costco, Target, and Dollar General. Good luck.
Wal-Mart is capitalizing in areas that other retailers are completely missing the ball on. For example, Wal-Mart’s brick and mortar locations now allow for online ordering with in store pickup. This shows me that Wal-Mart is focusing tirelessly on allowing the customer to buy the product where they want to, pick it up where they want to, and use it where they want to. Wal-Mart has shown me lately they are serious about providing amazing customer experiences.
Wal-Mart is also keenly aware of a gigantic problem in E-commerce, stolen goods. In 2015, 11 Million packages were stolen, while 41% of consumers said that they won’t order online because they fear this exact issue. Wal-Mart recently announced a partnership with smart lock maker “August” to make in home deliveries. Not only will this mitigate the issue of theft, but will enable a more seamless grocery delivery experience. The homes will be equipped with cameras for those worried about the delivery men. The last mile has proved to be challenging even for behemoths like Amazon, who have had to invest in lockers to hold their packages. Despite its failure, I think that the user base/appeal for ‘Doorman’ shows a change in consumer behavior, and I think Wal-Mart is on to something.
1. The Jet.com Acquisition has transformed Wal-Mart with New Technology and a New User Base
Jet.com is intensely focused on capturing the millennial market from other companies by offering exceptional service and a membership free model. They offer products that are trendy and popular with millennials while offering prices that are similar to Wal-Mart. Jet.com offers superior customer service than Amazon, with simple ways to connect to a live human when you need one.
Jet.com is also offering quarterly promotions giving 5% back on certain categories, taking aim at the credit card companies who have similar promotions.
Jet.com is growing 280 times faster than Amazon! Can you believe it? Jet has gone from 100,000 customers in July of 2015 to more than 3.6 million today!
Millennials are not fans of gigantic companies that have the power to exert control over its customers. They prefer the cool, and trendy little guys. Check out Jet.com’s new premium grocery brand called ‘Uniquely J’. I am certainly a fan!
2. The Omnichannel Solution Wal-Mart Offers is Superior to All Other Retailers:
Like I mentioned above, if you haven’t used the Wal-Mart application I urge you to give it a shot. If you haven’t ordered something off of Jet.com you should give it a chance.
Because Wal-Mart has such a strong brick and mortar presence it allows them to leverage the data from the store front to recommend products online. I recently was buying some toiletries and household products and sure enough 1 month later around the time when I needed more products, the Wal-Mart app recommended I order it.
I decided to place the order and two days later my product arrived on my doorstep. By leveraging these capabilities Wal-Mart is allowing for a more seamless experience with the customer deciding when and where to purchase. Wal-Mart is doing an exceptional job at managing every piece of data and integrating it into its Omnichannel strategy.
In addition to the aforementioned points above, Wal-Mart’s prices are significantly cheaper than on Target, Costco, & Amazon. I encourage you to compare basic necessities that you buy from other sites to those on Walmart.com The differences are material and should at some point impact the customer loyalty at other companies.
Tagged with: Walmart stock
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