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Amazon May See Stronger E-Commerce Competition From Walmart

By Corazon Gritar

The cloud computing company and leader in e-commerce retail, Amazon, may be seeing stronger competition in the future, new data suggests. According to market intelligence leader SimilarWeb, Walmart’s online conversion has been steadily increasing since September. And with the holiday season coming to a close, the retail giant may just dethrone Amazon.

Walmart’s conversion rate for online shoppers rose 45% higher than its previous percentages in the past two years, coming in at 4.7%. Amazon’s conversion rate is substantially higher at 8.6%. However, considering Amazon’s conversion increased by 16% compared to Walmart’s 45%, it’s worth saying Walmart may be taking big strides.

“Walmart is showing tremendous improvement in their ability to effectively convert online visitors to purchases,” said SimilarWeb Director of Digital Insights Gitit Greenberg. “Yet, [Amazon’s] improvements are significant.”

According to Forbes, Walmart’s new-found e-commerce success isn’t coming as a surprise. The retail giant recently put in significant effort to boost search results and keyword traffic.

One keyword worth mentioning is ‘Nintendo Switch.’ Walmart’s search traffic for the game system increased by six percentage points this holiday season. Amazon’s search traffic for the same word decreased by two percentage points.

But why the focus on online search? As it turns out, Walmart’s paid and organic search is the fire that fueled 48% of the retailer’s online traffic over the last 18 months.

However, it isn’t all about keywords.

Walmart has also been increasing online traffic using referrals. Walmart’s current referral rate is 11% compared to Amazon’s 22%. However, this small percentage doesn’t mean they’re any less of a threat. A growth in referral ratings could very well push their e-commerce success up against Amazon’s.

“While eclipsing Amazon traffic is something that could only happen in the very, very, very different future,” said Greenberg, “cutting into the overall lead is a distinct possibility if [Walmart] can manage to improve their activities through these sources.”

For either company to become or remain the top e-commerce retail seller, both companies would need to take their online and offline sales into account. This is the reason for why trade shows are so popular among big-name companies. Up to 81% of trade show attendees are estimated to have buying authority.

These offline sales, in trade shows and in stores, have incredible power over revenue and retail success. Therefore, for either Walmart or Amazon to maintain rankings and improve ratings, long-term strategies in both online and offline sales are necessary.

Photo Credit: stock photo

December 24, 2017

Comments

  1. 1

    akaGaga says

    Well, from this shopper, at least, service is the most important component. I’ve been a customer at Amazon since 2004, have ordered many times, and have never had a problem. Never.

    Walmart is another story. We bought a loveseat from them for my bachelor son for Christmas a couple years ago, to be shipped to store for pickup. On the day it was supposed to arrive, I checked the status on line and – oops!- they lost it!

    Not only did they admit to losing it – how do you lose a loveseat! – they didn’t bother to notify me. I had to go looking for the information. And they weren’t going to fix the problem. They cancelled the order and if I still wanted it, I could re-order. Which I did. At Amazon.

    Just as the employees at Walmart typically are not informed or helpful, the online service is even worse.

    • 2

      RD Blakeslee says

      akaC., I’m no fan of WalMart’s (nor some of Bezo’s shenanigans at Amazon either, for that matter), but WalMart’s web presentation is improving rapidly since they bought an online retail sales company:

      https://www.wsj.com/articles/wal-mart-to-acquire-jet-com-for-3-3-billion-in-cash-stock-1470659763

      They now offer a 5% cash=back credit card as well, matching Amazon.

    • 3

      Len Penzo says

      Totally agree, Gaga. I also have been an Amazon customer forever; I have spent thousands of dollars with them and can’t remember the last time there was a problem.

      On the other hand, I ordered some hard to find canned goods from Walmart’s online service and all 12 cans were delivered to me with severe dents due to their substandard shipping. The cans were tossed into a box that was twice as big as it had to be with only a couple of pieces of foam padding that were so small they only served to rattle around with the cans. It was extremely unprofessional.

      Anyway … I then complained to Walmart but got no response. Needless to say, I will never buy anything from Walmart online again! Ever.

  2. 4

    Deb in SD says

    I have shopped both Amazon and Walmart online recently. Amazon is still WAY better, easier to find stuff and shipping is much faster. Walmart will have to overcome the “we’re cheap and huge and that’s enough” mindset if they truly want to compete with Amazon. But I do occasionally travel the 60 miles to the nearest “city” and usually stop at the Walmart there to stock up on certain items I can’t find in my small town stores. I live on approximately 24k per year and hate shopping, there is room in my world for both☺.

    • 5

      Len Penzo says

      I can’t argue with that, Deb. I will still walk into a Walmart if I need to buy something too — but they have lost me on their online business.

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