The question of whether or not Amazon will put Walmart out of business has been on the lips of many Wall Street analysts for some time now. While there are those who predict that the mega retail giant will indeed move into a brick-and-mortar store in the biggest mall in America, others are concerned that it may never happen. Some have even said that it could turn out to be a big mistake for the company.
One of the problems with predicting an outcome is that no one can actually predict how something will happen. Sure, a lot of people can give you an idea of what they think may happen, but when something happens it’s only as good as everyone else’s guess. One thing is for sure though, no matter how pessimistic or positive someone might feel about a potential move by the behemoth, the store is always a huge hit. It attracts shoppers from all over the country every single day, and more are surely on the way. No matter what happens, Walmart shoppers are guaranteed to continue to buy in the area.
On the other hand, there are those who believe that a Walmart would quickly lose its power in the region. According to them, the discount superstore’s competitive advantage would quickly erode. For one thing, Walmart doesn’t just sell clothing; it also sells household goods like televisions and home appliances. There’s also the presence of several grocery stores in the vicinity of the proposed store. The competition might be too tough for one of the biggest retailers in the world to handle.
What else could put Walmart out of business? Well, the company has also made mistakes before when it comes to its management of its assets. For one thing, Walmart has been known to invest in areas that aren’t so profitable such as emerging markets. It’s also been known to buy too many stocks too quickly. All these things could put a huge burden on its profit margins, especially if it continues to acquire new stores.
In addition to these mistakes, Walmart itself might also undergo a complete makeover. It already has some aging stores in its portfolio, and it would do well to replace those with newer, more attractive ones. Then again, the company could do a bit of a renovation. It could add some new stores and provide more services to its customers. Both of these things would help increase customer satisfaction and customer loyalty.
If Amazon can turn the book market on its head and successfully get into the online retailing business, then it is also possible that Walmart could put itself out of business. A better selection, more services and a more attractive brand would be the perfect combination for an online retailer. Amazon is already gaining market share in the book market, and it would do well to keep its feet firmly planted in that area. Adding another brick and mortar store to its portfolio might only put too much pressure on its already struggling operations. The company should instead focus on how it can improve its customer relations and increase its sales. It should not worry about whether it will lose a lot of customers to an online competitor, because by all statistical and logical evidence, chances are it will retain its current customers and win over new customers from the net.