How Do Target and Walmart Stack up in the E-Commerce Wars?
fortune.com
Mar. 11, 2015
Mar. 11, 2015
Coded Expectation
GE3.01- describe ways in which technology (e.g. e-commerce, e-banking, distribution and communication technology) has had an impact on the global business environment
Summary
Walmart and Target have been focusing on e-commerce as they are relative late comers to the market, which has allowed companies such as Amazon to gain a foothold in the market. Both Walmart and Target will be investing significant amounts of money into their e-commerce business, with Target dedicating $1 billion to improving its online presence and expecting to see a 40% rise in e-commerce sales. Meanwhile, Walmart is planning to spend close to $2 billion, and is also testing grocery delivery, currently an untapped market. To increase sales, Target will be waiving shipping fees on orders less than $25, which will decrease its profit margin but put pressure on Walmart and Amazon. Overall, both companies will focus on e-commerce throughout the fiscal year in the hope of driving sales.
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Target and Walmart are going head-to-head in attempt to bolster e-commerce sales. Both companies arrived late to the market and have been trying to gain back e-commerce sales since. (10)
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Connection
Before E-Commerce was as popular as it is today, Target and Walmart were dominant in the department store business. However, this has been shaken up, with Amazon now holding a significant amount of weight. Meanwhile, Target and Walmart have fallen behind and are now spending billions of dollars every year to try to catch up to Amazon’s sales in e-commerce. This has drastically changed the global business environment in a couple of ways. First, the previous leaders are now playing catchup. Secondly, Target and Walmart are focusing more effort on their e-commerce business than their retail locations, as retail sales continue to drop. Finally, e-commerce could lead to Walmart and Target’s eventual downfall. E-Commerce is the most profitable sales platform, and with two of the major department chains falling behind, e-commerce may be seen as the downfall of both Target and Walmart.