Online Losses Cost Walmart Heirs $14 Billion

In Amazon Insights by Corey ThomasLeave a Comment

Is the largest indicator of Amazon’s health Walmart’s losses?

As Amazon dominated Q4 online – with over 85% of all online transactions – Walmart seemed to hold its own with around 4% of all online sales. Walmart also reported growth in every quarter of last year, but apparently these stats were not enough to save Walmart in the stock market where shares dropped by 9%.

Walmart Online Sales up almost 25%

Q4 saw Walmart grow its online sales by 23%, which would normally be grounds for celebration. But when you have been chasing Amazon as hard and consistently as Walmart has been, seeing growth from Q3 drop by nearly half to Q4 is grounds for some upheaval.

The year over year decline in Q4 amounted to about 42%, which was far less than analysts expected and resulted in the slump in the stock market. All in all, the children of Sam Walton lost around $3.8 billion each – still less than one tenth of their net worth. A sizable loss no doubt, but what it means in the larger scope of online sales and the ecommerce playing field is interesting.

Amazon’s High Bar is Raised Higher

Do these losses mean that Walmart is going away or ceding online sales to Amazon? Certainly not in the short term, but they do allude to just how much of a force Amazon truly is. When 23% growth is not only not enough to boost sales, investors, and stocks, you know that there is something much larger going on – Amazon.

The stock losses may also have to do with Walmart closing 63 Sam’s Club locations – 10 of which will become distribution centers. As Walmart continues to mount an online attack that is seen as flailing by investors, it has to right the ship in terms of sales online or face defeat as Amazon continues to grow.

Amazon Making Moves Elsewhere

While Walmart seems continuously confounded by how to grab its own corner of the online market, Amazon continues to make huge announcements. First it was the official opening of the Amazon Go, then the announcement that Amazon will be testing its own shipping carrier in Los Angeles, and then it was the announcement of Amazon Healthcare for its employees. As major retailers continue to be stymied by Amazon’s online sales success, Amazon continues to shift and strike out in more and more industries. While this doesn’t spell the doom of health insurance, FedEx, and traditional brick and mortar retailers, it does give solid examples of how well Amazon diversifies, tests, and implements in meaningful ways.

Since Amazon is not directly competing with Walmart as far as the brick and mortar, big-box arena, it is interesting to watch the ecommerce giant take up ground everywhere but directly opposing Walmart. Walmart, on the other hand has directly attempted an assault on Amazon’s online fortress, and it looks like they are losing little by little.

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