AmaMart meets Walzon

Here in the Digital Age, business models continue to be buffeted, often in surprising ways.  The big, lever you push to sell your product – it seems – is data, analytics, and cloud (you figure which is rod, pivot, force). It plays out most vividly in the dialectic of Walmart and Amazon.

==

Walmart faces challenges. It gets harder to grow an operation when its revenues mount to almost $475 billion a year. Some folks would say Amazon.com, with Web services and large-scale cloud clusters, has created an e-commerce killer app aimed straight at the company atop the Fortune 500. It will be interesting to see if Walmart's coupling of Hadoop and data democracy will help it deflect such challenges. From Big data applications to driveWalmart reboot on SearchDataManagement.com

==div

An article by Jim Stewart in NYT talks about the models shaking as Walmart flattens and Amazon edges upward. Walmart has been working for 15 years to curb the e-commerce incursions of Amazon but effect is narrow.  Prof Greenwald (see below) says as an investor it rather see Walmart  team with an existing company doing analytics and cloud, than to continue to try to build from within. (It actually has made purchases, but not too notable.)

--div
When Walmart announced last week that it was significantly increasing its
investment in e­commerce, it tacitly acknowledged that it had fallen far behind
Amazon in the race for online customers.
====div
“The shift in retail to the Internet is a huge change, and it’s not just
affecting Walmart,” said Simeon Gutman, a retailing analyst for Morgan
Stanley.

==div
Every retail company is trying to manage the transition. It’s not well
defined or understood and there’s no road map. Walmart is just the biggest.
It’s a behemoth that was built on superstores with volume and distributionefficiencies. That whole model is being unwound.”===div
Mr. Gutman said: “Walmart pricing is decent, depending on the basket of
goods, but they used to be dominant on price. They’ve lost that. Pricing is verycomplex and no one is really executing this all that well. On the Internet, priceis transparent, and your price advantage competes away the minute you gainit. Consumers are demanding and getting the lowest possible prices.”====div
as Prof. Bruce C. Greenwald of the Columbia Business School
noted in his book “Competition Demystified.”
===div
Walmart’s superefficient distribution system — a function of its enormousvolume and geographic reach — was long the secret to Walmart’s immenseprofitability,--div
“Every retail company is trying to manage the transition. It’s not well
defined or understood and there’s no road map. Walmart is just the biggest.
It’s a behemoth that was built on superstores with volume and distributionefficiencies. That whole model is being unwound.”--div
Simeon Gutman,--div
“In theory, they should be able to use their immense volume anddistribution network to compete with Amazon,” he said. “But they’re not atechnology company, and I don’t know what makes them think they are.” Asan investor, he said, he would rather see Walmart team up with an existingtechnology company that already has the analytics and cloud computingcapacity, rather than try to build its own. “That doesn’t inspire confidence,” hesaid.
“Distribution is very hard to get right in retail,” he said. “Walmart’s worldis the giant superstore, where you have big pallets of merchandise moving totrucks moving it into the stores. You start talking about delivering individualitems to consumers, and they’re out of their comfort zone.”

To me thinking the pricing perhaps tells the deeper tale. Walmart sells John Grisham's Rogue Lawyer for $24.61; Amazon sells it for $17.38. UnderArmor at Walmart is $33.78; at Amazon it is $29.99. Wall Street jumped favorably (6.23%) this week when Amazon made 1/3^rd of 1 percent profit for the quarter. It has lost money on everything (almost) it has ever sold – and with that scheme played out, it has turned to monetizing its cloud infrastructure. The cloud, said the Times, is raining money.

The big box was always a shell game where 'the tremendous volume kept things going'. Staples today is an example. Scorched earth policy toward mom and pop stationary stores – as the populace more out of of the town. Now what? After pressing manufacturing to move to China, no middle class to buy a life time supply of you name it.  - Jack Vaughan

http://www.nytimes.com/2015/10/23/business/walmart-plays-catch-up-with-amazon.html

http://www.nytimes.com/2015/10/23/technology/amazon-q3-earnings.html

http://searchdatamanagement.techtarget.com/opinion/Big-data-applications-to-drive-Walmart-reboot

A note on the comp: On one level this and the previous piece (on Machine Learning) kick around the notion of the Triple Store Tuple factoid graph. Which I hope to continue to learn about. When I read a story in the NYT, and the factoids* are popping, it looks like this (below) Next stop, however, is Las Vegas, and IBM Insight 2015.

*What did Ed Sanders call them, glyph clusters?