Walmart makes a key cut in battle with Amazon, Costco, and Target

February 28, 2024 | by


Walmart has made a crucial move in the ongoing battle with its competitors Amazon, Costco, and Target by cutting costs and improving its supply chain and logistics operations. With a focus on reducing expenses and improving efficiency, Walmart aims to provide customers with a wider selection of products at competitive prices. By leveraging its stores for e-commerce fulfillment and investing in automation technology, the retail giant has been able to lower its last-mile delivery costs by 20% and improve its e-commerce profitability. These strategic efforts position Walmart to further compete in the fast-paced retail industry.

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Walmart makes a key cut in battle with Amazon, Costco, and Target

Walmart’s competition in the retail industry

Walmart faces stiff competition in the retail industry from major players like Amazon, Costco, and Target. These companies have established themselves as strong contenders in the market, each with their own unique strategies and approaches to supply chain and logistics.

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Importance of supply chain and logistics

Supply chain and logistics play a crucial role in the success of any retail business. The ability to meet customer expectations for product availability is essential in driving customer satisfaction and loyalty. Retailers must ensure that the right products are available at the right time and in the right quantity to meet demand.

Customer expectations for product availability

Customers have high expectations when it comes to product availability. They expect to find the items they want in stock and easily accessible. Whether shopping in-store or online, customers want assurance that the products they desire will be available and delivered promptly.

The role of supply chain and logistics in retail

Supply chain and logistics are the backbone of the retail industry. They encompass all the processes and activities involved in sourcing, manufacturing, warehousing, and delivering products to customers. A well-managed supply chain ensures that products are delivered efficiently, reducing costs and improving customer satisfaction.

Amazon’s infrastructure and supply chain

Amazon is known for its massive infrastructure and supply chain network. The company has made substantial investments in warehouses, distribution centers, and its fleet of last-mile delivery trucks. These investments have allowed Amazon to achieve fast and reliable delivery times, a key factor in its success.

Costco’s approach to supply chain

Costco has taken a different approach to supply chain management. While not investing as heavily as Amazon in infrastructure, Costco has found cost control through innovative methods. The company has rented its own container ships and has taken on last-mile trucking for larger items. These measures have allowed Costco to maintain low prices for its members.

Target’s acquisition of Shipt

Target made a strategic move in the retail industry by acquiring last-mile delivery company Shipt. This acquisition has enabled Target to compete with Walmart and Amazon in terms of delivery without having to make large infrastructure investments. Target’s fleet of stores serves as fulfillment centers, making the delivery process more efficient and cost-effective.


Walmart’s delivery capabilities

Walmart has made significant investments to enhance its delivery capabilities. The company offers same-day, next-day, and two-day delivery options to compete with Amazon. While Walmart may not have the same extensive online selection as Amazon, its focus on fast and reliable delivery has positioned it as a formidable player in the retail industry.

Comparison with Amazon’s online selection

While Walmart may not have the same vast online selection as Amazon, it has been able to bridge the gap through strategic partnerships and leveraging its physical store network. By utilizing its extensive store base to fulfill e-commerce orders, Walmart has been able to improve delivery times and reduce costs.

Walmart’s cost-cutting strategy

Walmart has implemented a cost-cutting strategy to improve profitability and price competitiveness. By reducing store-to-home delivery costs by 20%, Walmart has achieved significant savings. This cost reduction, coupled with improved e-commerce product margins, has exceeded the company’s goals and reduced e-commerce losses by more than 40%.

Impact on profitability and price competitiveness

Walmart’s cost-cutting strategy has had a positive impact on its profitability. By reducing delivery costs, the company has been able to allocate more resources towards price competitiveness. Lower prices attract customers and enhance Walmart’s position in the market, positioning the company for long-term success.

Walmart’s use of automation

Walmart has embraced automation as part of its supply chain transformation. The company has deployed automated storage and retrieval systems in 13 regional distribution centers, improving productivity and fulfillment center volume. Automation has allowed Walmart to get products on shelves faster, benefiting both distribution centers and stores.

Benefits to productivity and fulfillment center volume

Automation has yielded significant benefits for Walmart. By reducing manual tasks and streamlining processes, productivity has improved across the supply chain. The deployment of automated storage and retrieval systems has also increased fulfillment center volume, enabling Walmart to handle larger volumes of orders efficiently.

Walmart’s goal for automation

Walmart has set a goal to have approximately 55% of its fulfillment center volume and around 65% of its supercenters serviced by automation by the end of fiscal year 2026. This ambitious goal demonstrates Walmart’s commitment to leveraging automation to drive efficiency and improve the customer experience.

Implications for Walmart’s competitiveness in the retail market

Walmart’s investments in supply chain and logistics, delivery capabilities, cost-cutting strategies, and automation have positioned the company as a strong competitor in the retail market. By prioritizing customer satisfaction, cost control, and operational efficiency, Walmart has the potential to outperform its competitors and maintain a competitive edge.

Future prospects and potential impact on customer experience

Looking ahead, Walmart’s continued focus on supply chain and logistics, delivery capabilities, cost-cutting strategies, and automation will play a crucial role in shaping its future prospects. These efforts have the potential to enhance the customer experience by ensuring product availability, faster delivery times, and competitive pricing. Walmart’s commitment to innovation and efficiency will continue to drive its success in the dynamic retail industry.

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