Business English: Amazon vs Walmart
This text is about Amazon and Wal-Mart. Some useful phrases are highlighted and explained below. Don’t forget to answer the quiz and leave comments about the discussion questions. If you want a print-friendly version of this post, click here.
For years, Amazon and Wal-Mart have been engaged in a battle over shoppers. Wal-Mart has sold goods in bricks-and-mortar stores to cost-conscious customers. Whereas, Amazon, the world’s largest online retailer, has catered to the internet generation of more affluent internet shoppers. Wal-Mart is by far the dominant force in this war but that position looks to be under threat.
The economic climate has made a vast majority of customers more price sensitive than before. With unemployment figures on the rise and salaries either not increasing or in some cases decreasing, people are willing to shop around for a bargain. Add to this the growing use of mobile phones with internet access and you have an expanding group of customers able to find the lowest price on almost any product either in a shop or online. In fact, the term ‘scan and cram’ is being used to refer to customers who visit Wal-Mart, scan a product’s bar code and then buy it online at a cheaper price.
Wal-Mart is aware of the threat posed by Amazon so is putting more money into its online operations. In the past 12 months, Wal-Mart has bought 5 new technical companies including one which specialises in mobile phone apps. Their hope is to make their online shopping procedure easier and more attractive, particularly to mobile users. Another brave step is the expansion of its online payment methods to include cash. This is where merchandise can be reserved online and then paid for with cash in a local store.
Cheaper prices have long been the USP at Amazon which has been made possible in the US as they exploit a tax loophole in several US states. Unfortunately for Amazon, this will be closed this year and the knock on effect will certainly raise prices, perhaps across the board and may just put both companies on an equal footing where prices are concerned.
Amazon is also ready to test a small, boutique store in Seattle and if it goes well have plans for a national chain. With Wal-Mart boosting its online shopping experience this means soon there won’t be much difference between them and customers will choose solely based on customer service and convenience.
Loading …Business English Vocabulary
- To be engaged in sthg
- A participant in sthg
- Bricks-and-mortar
- A physical shop
- Cost-conscious
- Looking for a low price
- Catered to
- Made/Sold products to a certain group
- Affluent
- Rich
- Dominant force
- The leader
- To be under threat
- To be in danger
- Price sensitive
- To place more importance on the price
- To shop around for a bargain
- To visit different shops/sites to find a cheap price
- The threat posed by X
- The danger that X represents
- Putting more money into sthg
- Investing more money in sthg
- USP
- Unique Selling Point or Proposition – Something special to that product/company that makes it different
- To exploit a tax loophole
- To take advantage of an area without clear laws
- The knock on effect
- The subsequent influence
- Across the board
- In all areas
- On an equal footing
- At the same level with no advantages
- Boutique store
- A small store often within a large department store selling specific products
Discussion Questions
- Why does Wal-Mart want to invest more money in e-shopping?
- Should Amazon open bricks and mortar stores? Why?
- Who will win this war and how?
Posted by Phil Wade on Apr 2 2012. Filed under Business English.
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Wal-Mart recognizes that the online market is growing faster and that, to maintain the business enterprise, the company needs to modernize its services to accommodate the new costumer needs. The 30-40 years old costumers of today are very different from the ones with the same age 10 years ago. The main differences being that the new buyers generation:
1) have a much close and easy relationship with the technology;
2) are interested in product reviews and comparisons, both from specialized magazines/websites, and costumer reviews, prior to decide which products to purchase;
3) want to find the best deal. And is much easier to find deals siting down in front of the computer screen than going into the shops.
4) have a very busy personal and professional life, therefore they don’t have enough time to go shopping after work.
I truly hope that not all shops go online. I in fact I prefer to touch things, feel the texture, the weight, the shape, the smell… try it if I can. But I don’t think that Amazon should open a physical shop. I just sound wrong. What for would they do it? Wouldn’t that be against their initial business plan? I believe that this will just work as another way to advertize the brand.
If the war is bricks-and-mortar vs online stores, in one hand I hope that the physical shop wins, in the other the fact is that I tend to buy online many products, such as books, movies, games, gadgets, … because it is cheap!!!
Phil, thanks for the new vocabulary.
Hi Sandra,
Glad you liked the post.
In the UK we have a lot of choice for internet shopping now so many people don’t need to actually go to shops, it’s sometimes cheaper too. For busy people with mobile phones it does save time.
This is modernisation, the same as when supermarkets opened and lots of little shops closed down. I think in the UK we try to keep up-to-date but it has made all our high streets look the same as the same shops are everywhere. If they all close down then there will be nothing. In Europe there still seems to be an interest in small independent retailers and even book shops.