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.   [poll id=”34″]

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

Discussion Questions

  1. Why does Wal-Mart want to invest more money in e-shopping?
  2. Should Amazon open bricks and mortar stores? Why?
  3. Who will win this war and how?

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