The Blue Basket site is spinning a very bad story at the moment. It doesn’t have the prices or variety to compete with giant Amazon. Neither the warehouses nor the ultra-fast delivery service. All of this makes Amazon untouchable… or almost, because a new rival is emerging: Walmart.
It’s often said that the only direction you can go when you’re at the top is down. Amazon is acquiring a very intimate understanding of this adage in online sales. The Seattle giant, which two years ago accounted for 49% of all purchases made by American consumers on the Internet, saw its share of this market drop to 38% at the end of 2023.
Walmart, already the largest retailer in North America, benefited the most. Its online sales quadrupled from 2019 to 2023, to exceed US$83 billion. This equates to just over 6% of all online purchases made online in the United States last year.
We agree, between 6% and 38% market share, there is still a very large margin to fill for Walmart to end up stealing from Amazon the title of king of the cyber mountain. But if there was a possibility on the Mise-o-jeu site to bet on this rivalry (and why not, there is indeed one for the show The voice of VAT, after all…), Walmart’s rating would probably be much better than you might think.
Especially since Walmart has quietly made an acquisition that could act as a turbocharger for its online activities. A somewhat unusual acquisition, which only required him to pay 2.3 billion US dollars, and which says a lot about the means to be taken by anyone hoping one day to carve out a place for themselves in the shadow of these American giants in the Internet sales market.
Spoiler: it’s not the Blue Basket that could have done the same.
Television reinvented
In the middle of last week, Walmart actually announced its intention to acquire the American television manufacturer Vizio, for 2.3 billion. Vizio TVs are smart TVs or, to use the correct term, connected TVs. They were already selling primarily at Walmart, as well as Costco and Best Buy.
These are inexpensive TVs, in the sense that their retail price is particularly low. Vizio can afford this since it actually generates a good part of its revenue by selling advertising, which is displayed almost everywhere in the ecosystem of content that can be accessed for free from its televisions.
Vizio claimed at the start of the year that its advertising division had grown by 400% since 2018. It now counts on some 500 advertisers, several of them from among the best-known consumer product brands in North America. Some 18 million North American households have a Vizio TV at home and are registered on its platform.
Right there, it’s a natural marriage for Walmart, which will be able to combine a targeted advertising offer with an in-store and online marketing offer to its suppliers and partners. Walmart was already doing this: the revenue the American retailer earns from digital advertising on its website and elsewhere currently amounts to US$3.4 billion. It’s a lot, but at the same time, it’s very little. That’s less than 1% of the total digital advertising market in North America.
But, now, with Vizio, Walmart will be able to accelerate the growth of its advertising division, and create an ecosystem comparable to those of Amazon and even Meta (the former Facebook).
For manufacturers: advertise at Walmart, sell at Walmart, and ship from Walmart. For consumers: subscribe to Walmart+ (its Amazon Prime, so to speak) and add one-day delivery (in the United States) to the low prices we were already offering.
As a bonus, Walmart will have a great time creating an online on-demand streaming service that could go beyond Vizio TVs, like the Prime Video app, which Amazon attaches to its Fire TVs, but which is downloadable for free everywhere else.
Walmart can afford it: its in-store and online retail sales totaled US$440 billion in 2023. Its closest rival may be the Costco chain, which doesn’t have the same online ambitions as Walmart , even less than Amazon.
Obviously, the day Costco starts selling Kirkland brand televisions, the conversation risks taking a completely different tangent…
Selling online: yes, but…
In 2024, nothing is easier than selling on the Internet. It doesn’t take 20 minutes to create a website, display products and buy a little advertising. It is probably just as simple to buy items in bulk on Chinese sites like Alibaba and resell them individually elsewhere on the Web, and generate a decent profit margin.
In 2024, trying to compete with Amazon is a completely different story. Its website is just the tip of the iceberg. Sourcing, distribution, delivery and retention all need to be considered.
There aren’t many companies that have the means to do this. The Blue Basket does not have them. And if Quebec products will soon have a place of choice on the Amazon site, it would be wise for the organization responsible for this label not to blur its relations with Walmart…