Walmart Slow-Follower Approach to Amazon Takes Another Step with Walmart Business
Who is Walmart Business targeted towards?
Walmart launching a program for small businesses and non-profits really tells me one thing. They plan to use this program to take share from Staples, Office Depot, Amazon Business, Costco (Sam's like other wholesale clubs has been on a tear and more office offerings could be helpful). It could work.
What is Walmart's approach to innovation?
Walmart has traditionally lagged Amazon innovation in an approach I would call a slow-follower (never heard this term but I can't describe it any other way).
Usually companies take one of two approaches:
What is an innovation-first approach?
One is an innovation-first approach. This is very expensive, risky, and incredibly rewarding if done correctly. Upside is you get here first, downside is that it's often difficult for the first-mover to operationalize a disruptive innovation correctly.
What is a fast-follower approach?
Another is what's called a "fast-follower" approach. Wait for the big wins to become known, and then add those to your playbook. Avoid the messy innovation process. Easier said than done but that's the strategy.
Walmart seems to be a slow-follower, however.
How has Walmart implemented the slow-follower approach?
Marketplace (Amazon 2000, Walmart 2009)
Logistics (Amazon 2006, Walmart 2020)
Walmart+ (Amazon Prime 2005, Walmart 2020)
Advertising (Amazon 2012, Walmart 2014...ish)
Amazon Business itself launched in 2015 after launching AmazonSupply in 2012. Walmart Business first saw the light of day at the end of 2022, and now they are looking to scale it up.
Hard to argue with results, as Walmart has consistently come in 5% net margins, even as we exit the pandemic.
What is the significance of Walmart launching Walmart Business?
Source: Forbes, 2021
I'm bullish on the Walmart Business idea, and it's a natural fit for a physical retailer to win in office supplies, particularly heavy/bulky ones (which describes a lot of the category).
Anyone who has tried to buy an office chair on Amazon knows it's almost impossible to do. Physical retail still works.
What's next then? Walmart Datacenter?
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