Walmart has apparently been worried about Amazon for more than 15 years - here are all of the changes it has made to keep up in the online-shopping battle

Advertisement
Walmart has apparently been worried about Amazon for more than 15 years - here are all of the changes it has made to keep up in the online-shopping battle

walmart 3

Business Insider/Jessica Tyler

Walmart's pickup towers allow shoppers to pick up online orders in stores.

Advertisement
  • Walmart has been worried about Amazon for years, and it has forced Walmart to make some major changes to its e-commerce strategy.
  • Those changes have included introducing two-day shipping and improved grocery delivery options.
  • Here's how Walmart has evolved to keep up with Amazon.

Walmart has been worried about Amazon for over a decade, according to former Walmart board member John Chambers. In 2003, Amazon was eight years old and was just starting to turn a profit. Still, Walmart was worried about the growing online retailer.

"This is something that I know. I saw Amazon coming at Walmart," Chambers told Business Insider's Julie Bort.

To keep up with the rapidly growing Amazon, Walmart has had to make a lot of changes to its business, from introducing two-day shipping and grocery delivery to spending more than $3 billion on its acquisition of Jet.com.

Here are all of the ways Walmart has evolved to keep up with Amazon:

Advertisement

Exclusive FREE Slide Deck: Future of Retail:AI by Business Insider Intelligence

{{}}

Walmart.com was initially launched in 2000.

Walmart.com was initially launched in 2000.

Source: Walmart

Amazon had been founded five years earlier, in 1995, as a website that sold books.

Amazon had been founded five years earlier, in 1995, as a website that sold books.

Source: Business Insider

Advertisement

In 2003, Amazon was eight years old and was just starting to turn a profit. Walmart had nearly $245 billion in sales in 2003. Its $8 billion in profit was more than all of Amazon's sales that year. Still, Walmart was worried about the disruptive online retailer's potential.

In 2003, Amazon was eight years old and was just starting to turn a profit. Walmart had nearly $245 billion in sales in 2003. Its $8 billion in profit was more than all of Amazon's sales that year. Still, Walmart was worried about the disruptive online retailer's potential.

Source: Business Insider

"This is something that I know. I saw Amazon coming at Walmart," former Walmart board member John Chambers told Business Insider's Julie Bort.

"This is something that I know. I saw Amazon coming at Walmart," former Walmart board member John Chambers told Business Insider's Julie Bort.

Source: Business Insider

Advertisement

One of Walmart's earliest innovations to online shopping was when it launched its Site to Store service in 2007, allowing customers to shop online and pick up their orders in-store.

One of Walmart's earliest innovations to online shopping was when it launched its Site to Store service in 2007, allowing customers to shop online and pick up their orders in-store.

Source: Walmart

The program has expanded quite a bit over the past decade. Now, shoppers are able to order online and pick up in-store at a pickup tower or locker.

The program has expanded quite a bit over the past decade. Now, shoppers are able to order online and pick up in-store at a pickup tower or locker.
Advertisement

But e-commerce didn't become a huge focus for Walmart until somewhat recently. In 2015, Walmart began testing its ShippingPass program, which offered shoppers free three-day shipping if they were willing to pay a $50 annual subscription fee. That was roughly half the $99 that Amazon Prime cost at the time.

But e-commerce didn't become a huge focus for Walmart until somewhat recently. In 2015, Walmart began testing its ShippingPass program, which offered shoppers free three-day shipping if they were willing to pay a $50 annual subscription fee. That was roughly half the $99 that Amazon Prime cost at the time.

Source: MarketWatch

In 2016, Walmart dropped its three-day shipping guarantee down to two days, the same that Prime offered.

In 2016, Walmart dropped its three-day shipping guarantee down to two days, the same that Prime offered.

Source: Engadget

Advertisement

Also in 2016, Walmart acquired e-commerce startup Jet.com for $3.3 billion.

Also in 2016, Walmart acquired e-commerce startup Jet.com for $3.3 billion.

Source: Business Insider, Business Insider

Jet offers Walmart access to urban customers, and the fact that it's a digitally native brand means Walmart can expand its online reach further.

Jet offers Walmart access to urban customers, and the fact that it's a digitally native brand means Walmart can expand its online reach further.
Advertisement

Walmart ended the ShippingPass program in 2017, just two years after its launch. It began offering free two-day shipping to all customers who spent $35 or more.

Walmart ended the ShippingPass program in 2017, just two years after its launch. It began offering free two-day shipping to all customers who spent $35 or more.

Source: MarketWatch

Meanwhile, Amazon has continued to lean in to Prime and has raised the cost to $119 a year.

Meanwhile, Amazon has continued to lean in to Prime and has raised the cost to $119 a year.
Advertisement

It also raised the cost of its monthly Prime fee to $12.99.

It also raised the cost of its monthly Prime fee to $12.99.

Walmart also partnered with Google Express in an effort to take on Prime in 2017.

Walmart also partnered with Google Express in an effort to take on Prime in 2017.

Source: Business Insider

Advertisement

Through the partnership, customers are able to place orders with Walmart at Express.google.com, on the Google Express app, or through Google Assistant-enabled devices like Google Home.

Through the partnership, customers are able to place orders with Walmart at Express.google.com, on the Google Express app, or through Google Assistant-enabled devices like Google Home.

Two months later, Walmart took a majority share in Parcel, a New York-based delivery startup.

Two months later, Walmart took a majority share in Parcel, a New York-based delivery startup.

Source: Business Insider

Advertisement

This later helped Jet.com launch same-day delivery in NYC.

This later helped Jet.com launch same-day delivery in NYC.

Source: Business Insider

In December 2017, Amazon revealed its plans for Amazon Go, a cashierless convenience store. In January 2018, Walmart fired back by rolling out Scan & Go technology to cut down checkout lines at its stores.

In December 2017, Amazon revealed its plans for Amazon Go, a cashierless convenience store. In January 2018, Walmart fired back by rolling out Scan & Go technology to cut down checkout lines at its stores.

Source: Business Insider

Advertisement

Scan & Go allowed customers to scan items and pay on their phones. However, Walmart ended the program in 2018 due to "low participation."

Scan & Go allowed customers to scan items and pay on their phones. However, Walmart ended the program in 2018 due to "low participation."

Source: Business Insider

Both Walmart and Amazon have been emphasizing their private-label brands this year. In February, Walmart unveiled four new private-label brands to compete with Amazon's.

Both Walmart and Amazon have been emphasizing their private-label brands this year. In February, Walmart unveiled four new private-label brands to compete with Amazon's.

Source: Business Insider

Advertisement

The brands are women's collection Time and Tru ...

The brands are women's collection Time and Tru ...

... plus-size brand Terra & Sky ...

... plus-size brand Terra & Sky ...
Advertisement

... children's brand Wonder Nation ...

... children's brand Wonder Nation ...

... and men's brand George.

... and men's brand George.
Advertisement

Amazon also has a number of private-label brands, including women's brand Wild Meadow ...

Amazon also has a number of private-label brands, including women's brand Wild Meadow ...

... outerwear brand The Plus Project ...

... outerwear brand The Plus Project ...
Advertisement

... women's brand Signature Society ...

... women's brand Signature Society ...

... and men's brand Quality Durables Co.

... and men's brand Quality Durables Co.
Advertisement

Amazon is now estimated to own more than 80 private-label brands.

Amazon is now estimated to own more than 80 private-label brands.

Source: Business Insider

Walmart also has been acquiring more specialty apparel brands, like Bonobos and ModCloth, to attract millennial customers.

Walmart also has been acquiring more specialty apparel brands, like Bonobos and ModCloth, to attract millennial customers.

Source: Business Insider

Advertisement

Walmart's e-commerce president and CEO Marc Lore has said the specialty acquisitions would help the company "create a reason for customers to shop" at Walmart over its competitors, like Amazon, in the future.

Walmart's e-commerce president and CEO Marc Lore has said the specialty acquisitions would help the company "create a reason for customers to shop" at Walmart over its competitors, like Amazon, in the future.

Source: Walmart

But it might have to acquire more than 40 brands that resonate with millennials to help lift margins in the long run, Lore said during a meeting with financial services firm Cowen and Company.

But it might have to acquire more than 40 brands that resonate with millennials to help lift margins in the long run, Lore said during a meeting with financial services firm Cowen and Company.

Source: Business Insider

Advertisement

Another initiative that Walmart-owned Sam's Club took on in early 2018 was partnering with Instacart to compete with Amazon's two-hour delivery service, Prime Now.

Another initiative that Walmart-owned Sam's Club took on in early 2018 was partnering with Instacart to compete with Amazon's two-hour delivery service, Prime Now.

Source: Business Insider

In April 2018, Walmart added pickup towers and pickup lockers to some of its stores.

In April 2018, Walmart added pickup towers and pickup lockers to some of its stores.

Source: Business Insider

Advertisement

The pickup tower allows customers to place orders online and then retrieve items from the towers in-store within a few days.

The pickup tower allows customers to place orders online and then retrieve items from the towers in-store within a few days.

The towers compete directly with Amazon Lockers. But Walmart's pickup towers are only available in Walmart stores, and Amazon Lockers are available in thousands of locations.

The towers compete directly with Amazon Lockers. But Walmart's pickup towers are only available in Walmart stores, and Amazon Lockers are available in thousands of locations.

See our review comparing Walmart's pickup towers to Amazon Lockers »

Advertisement

In May, Walmart invested $16 billion to become the majority owner of Flipkart, India's top e-commerce retailer, further expanding its reach internationally.

In May, Walmart invested $16 billion to become the majority owner of Flipkart, India's top e-commerce retailer, further expanding its reach internationally.

Source: Reuters

According to Reuters, Amazon was also interested in acquiring the company, but Walmart ultimately won that battle.

According to Reuters, Amazon was also interested in acquiring the company, but Walmart ultimately won that battle.

Source: Reuters

Advertisement

Most recently, Walmart announced that it plans to develop original TV shows to compete with Amazon's Prime Video. The company announced partnerships with interactive video startup Eko and MGM Holdings to create original content for Vudu, the streaming service Walmart acquired in 2010.

Most recently, Walmart announced that it plans to develop original TV shows to compete with Amazon's Prime Video. The company announced partnerships with interactive video startup Eko and MGM Holdings to create original content for Vudu, the streaming service Walmart acquired in 2010.

Source: Business Insider

Amazon has been spending a ton of money making shows and movies for Prime Video. One of its most successful shows has been "The Marvelous Mrs. Maisel," which won two Golden Globes and five Golden Globes in 2018.

Amazon has been spending a ton of money making shows and movies for Prime Video. One of its most successful shows has been "The Marvelous Mrs. Maisel," which won two Golden Globes and five Golden Globes in 2018.

Source: Business Insider

Advertisement

In late 2017, Amazon announced a new program, called Amazon Key, that allows delivery people to enter homes to leave packages inside, safe from both the elements and potential thieves.

In late 2017, Amazon announced a new program, called Amazon Key, that allows delivery people to enter homes to leave packages inside, safe from both the elements and potential thieves.

Source: Business Insider

Walmart had previously revealed a similar feature thanks to a partnership with delivery service Deliv and smart lock maker August, which allows delivery drivers to enter customers' homes to drop off packages and put groceries straight into their refrigerators.

Walmart had previously revealed a similar feature thanks to a partnership with delivery service Deliv and smart lock maker August, which allows delivery drivers to enter customers' homes to drop off packages and put groceries straight into their refrigerators.

Source: Business Insider

Advertisement

Walmart and Amazon both offer grocery pickup, but Walmart was actually years ahead of Amazon in launching the program.

Walmart and Amazon both offer grocery pickup, but Walmart was actually years ahead of Amazon in launching the program.

Source: Business Insider

Launched in 2013, Walmart's grocery pickup allows shoppers to order online, drive to a store, and then wait in their car as an employee delivers groceries to their car at a scheduled time.

Launched in 2013, Walmart's grocery pickup allows shoppers to order online, drive to a store, and then wait in their car as an employee delivers groceries to their car at a scheduled time.
Advertisement

Amazon's program, only available at a few Whole Foods stores, works in the same way. But instead of ordering on Amazon, customers need to use the Prime Now app.

Amazon's program, only available at a few Whole Foods stores, works in the same way. But instead of ordering on Amazon, customers need to use the Prime Now app.

Source: Business Insider

Even though Walmart's program has been around longer, when Business Insider's Katie Canales compared the two programs, she preferred Amazon's.

Even though Walmart's program has been around longer, when Business Insider's Katie Canales compared the two programs, she preferred Amazon's.

Source: Business Insider

Advertisement

She found that the pickup windows were more flexible and convenient, and that everything was wrapped more efficiently.

She found that the pickup windows were more flexible and convenient, and that everything was wrapped more efficiently.

Source: Business Insider

And even though Amazon has expanded its brick-and-mortar locations, Walmart stores still vastly outnumber them.

And even though Amazon has expanded its brick-and-mortar locations, Walmart stores still vastly outnumber them.
Advertisement

Currently, Amazon's store formats include the cashierless Amazon Go convenience stores ...

Currently, Amazon's store formats include the cashierless Amazon Go convenience stores ...

... Amazon Books bookstores ...

... Amazon Books bookstores ...
Advertisement

... and Amazon 4-Star, which carries its top-rated products.

... and Amazon 4-Star, which carries its top-rated products.

Walmart has more than 5,000 stores in the US.

Walmart has more than 5,000 stores in the US.
Advertisement
Next StoryHere's everything you need to know about Sam's Club's plans for Black Friday