Tomahawk, WI 08/05/2014 (Basicsmedia) – Wal-Mart Stores, Inc. (NYSE:WMT) continues to evolve especially on the e-Commerce space where it has already refurbished its website as it tries to follow on Amazon.com, Inc. (NASDAQ:AMZN) model. Questions are already being asked as to whether Amazon model is the best, and if it will work with success for Wal-Mart going forward. The retail sector has seen the emergence of companies who would wish to develop their brands led by the likes of Wal-Mart and those who would wish to keep their business such as Amazon according, John Jannarone, and CNBC’s Digital Senior Writer.
Despite Wal-Mart making known its desire to invest heavily on the online platform, Jannarone maintains it is going to be extremely difficult for it to topple Amazon from the top spot considering the amount of investment and time the latter has used to cement its position. Amazon.com, Inc. (NASDAQ:AMZN) is in a position that it can invest on cheap shipping and still offer cheap prices for products, something that would be extremely difficult for companies making a start for the space to imitate.
“I think that everyone gives Amazon a break,and so they can invest heavily on things like cheap shipping obviously be very competitive on pricing. If Wal-Mart Stores, Inc. (NYSE:WMT) tries to do too much of that, I think the street might flip out. So they can do more and they should, because there is no doubt that overtime more retail is going to go online,” said Mr. Jannarone.
Wal-Mart Stores, Inc. (NYSE:WMT) is banking on categories that have low penetration levels as it makes its run for the online retail business. The e-commerce continues to grow at a low of 20-25% and at times has been quite sluggish without any growth especially for the brick and Mortar stuff.
“There is still a lot of categories where the penetration level is very-very low, and that is a lot of stuff that Wal-Mart is selling so for them to focus on this, makes complete sense. The e-Commerce business is growing 25-30% where, as we know it has been very sluggish, basically no growth for the brick and mortar stuff,” said Mr. Jannarone.
Wal-Mart Stores, Inc. (NYSE:WMT) according to Jannarone has been limited by its investor on the chance to focus on the online platform as a way of rivaling Amazon through the creation of price wars for products. Being also late to the game could also be one of the disadvantages for Wal-Mart when compared to Amazon.com, Inc. (NASDAQ:AMZN).