How Walmart is Crushing its Competition with Amazon's Tactics
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Why Walmart is crushing it
Borrowing ideas from Amazon has paid off for Walmart. Not long ago, Walmart (NYSE: WMT), the world's largest retailer, was looking like a dinosaur.
Complaints about stockouts and unclean stores were rife, and the company was rapidly losing market share to competitors like Amazon (NASDAQ: AMZN) and Costco.
Walmart stock was essentially a dud for about 15 years, starting in the 2000s, but it's taken off since then, more than tripling since the end of 2015 thanks in large part to CEO Doug McMillon's leadership, and it just rewarded investors with a stock split.
- Gross margin rose in all three business segments, and overall adjusted operating income rose by 13.7% thanks to the increase in gross margin and rising membership income, including from Walmart+.
- Global e-commerce sales jumped 21%, driven by store-based pickup, delivery, and marketplace.
- Advertising revenue jumped 24%, including 26% growth for Walmart Connect in the U.S.
- Walmart+ continues to see solid growth with a double-digit increase in membership.
If you can't beat 'em, join 'em
Walmart retains key advantages over Amazon in areas like grocery, where it dominates more than half of its revenue.
Walmart is applying high-margin revenue streams like its third-party marketplace and advertising, tailored to its strengths, and gaining market share while delivering robust growth and strengthening its competitive advantage.