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.
Business English Vocabulary
- To be engaged in sthg
- A participant in sthg
- A physical shop
- Looking for a low price
- Catered to
- Made/Sold products to a certain group
- 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
- 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
- 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?