Walmart and Amazon are the two leading retailers in the world. The companies now have billion-dollar sales worldwide but used to remain in their niches. For instance, Amazon was an e-commerce company with a limited range of products offered. At the same time, Walmart was a retailer with thousands of stores worldwide that offered a considerable range of products at low prices.
However, the two leaders have become major competitors that can significantly affect the development of each other (Laudon & Laudon, 2016). At present, Amazon delivers different types of products to various locations within a short period. The retailer is famous for very reasonable and often very low prices (even including the shipping cost). At the same time, Walmart is trying to expand its e-commerce services, including such aspects as mobile applications, the integration of social networks, personalized marketing experience, and so on. Information technology is shaping the two companies’ organizational strategies.
First, it is necessary to note that information technology plays quite a different role in the two businesses. For Amazon, IT is the primary platform for offering its products and services. Amazon was developed as an e-commerce business that implied the supply chain that contained warehouses without physical stores. It is possible to state that information technology is fully integrated into the organizational strategy, and every technological advance allows the retailer to come up with a new service or product.
For instance, the company started as a bookseller, but now it offers a variety of products. More so, the retailer produces its consumer electronics, including Kindle e-book reader and Fire phone (Laudon & Laudon, 2016). The latter enables users to shop more effectively and access more data, including the automatic recognition of various products, easy ordering experience, easy access to the customer support service.
On the contrary, IT for Walmart is one of the tools to manage some business operations. The company was established in 1962 when information technology was very different from modern IT (Laudon & Laudon, 2016). The focus is on the physical expansion, so-to-speak, as Walmart is trying to make sure the most efficient coverage for its customers’ convenience. However, to address the preferences and meet the needs of modern shoppers, Walmart has to expand its online operations.
The retailer has to come up with online shopping services. It has done quite a lot in this direction as the company has developed mobile applications that enable customers to spot products within the store, compare prices, order products that are not in stock, order products and pay in cash in the closest Walmart store, subscribe to a particular set of products, order products online and pick them up in a Walmart store’s locker in the most convenient time. The company hires code-writers and engineers to develop and test new applications, new services, and new online tools.
It is also possible to note that IT helps the two retailers to shape their organizational strategies to develop and attract more customers. Ironically, information technology helps Amazon to become more physical and tangible while it enables Walmart to penetrate the digital environment. Both retailers focus on improving their existing and potential customers’ shopping experience. For example, Amazon Prime is a service (for only $99 per year) that ensures the purchased shipping within two days (Laudon & Laudon, 2016).
This service addresses one of the major disadvantages of online shopping that presupposes waiting for the product bought while it can be used right away if bought in a physical store. Amazon also tries to penetrate the physical world by using Staples and 7-Eleven to offer lockers where the products ordered online (through Amazon, of course) can be picked up. Amazon is constantly developing and improving existing fulfillment centers located near urban areas, which can ensure timely delivery. Amazon uses IT to improve its supply chain, big data management, and, of course, develop new services and products.
Walmart has to acquire e-commerce companies and hire managers who are experts in this area to develop its online and mobile shopping channels. One of the examples is the acquisition of Yumprint, a recipe technology startup, to help its customers develop their shopping lists based on the recipes they find through the new online and mobile service.
In conclusion, it is possible to note that Amazon and Walmart benefit from using the latest advances in information technology as the companies manage to penetrate new areas. Amazon is becoming more physical as it decreases the waiting time as purchases can be shipped within two days or even picked up in a local store’s locker. At the same time, Walmart is entering the sphere of e-commerce, which has become an indispensable part of the modern shopper.
The companies use IT to develop their supply chains and improve their customer’s shopping experiences. There are chances that Walmart can lose the battle as Amazon is more accustomed to working in the digital world while becoming more physical through the use of IT and alliances with other retailers. Walmart’s physical presence can become less relevant if Amazon can address this issue and offer similar products at better prices.
Reference
Laudon, K. C., & Laudon, J. P. (2016). Management information systems: Managing the digital firm. New York, NY: Pearson Education. Web.