As highlighted in a recent BNN article, Walmart has released that they are partnering with a company called August Home to test out home grocery delivery services; meaning that they are coming into competition with Amazon. With the purchase of whole foods and their already established dominance over the ecommerce world, Amazon is rapidly expanding and becoming increasingly more difficult to compete with.
If Walmart were to draw up a SWOT analysis, this would seem like a great opportunity at a first glance. It plays to their strengths, as they are a well trusted and reputable brand, which gives them an edge over startup brands in this field. Walmart is already succeeding when it comes to grocery sales and has strong ties with food suppliers, making the process of moving to online grocery sales much more efficient. However when you dive deeper, you realize that their threats may outweigh this opportunity. Amazon has also recently discovered a new connection with Olo, an online delivery network that is connected with both Chipotle and Applebee’s. This accompanied with their purchase of Whole Foods proves that they are not “just a tech company” anymore. They are already cutting whole foods prices of fresh produce making it even more difficult for walmart to keep up.
In order to standout in the online grocery world, Walmart is using what they call a “one-time passcode delivery” which gives the deliverer access to the home with a passcode that expires after one use. This way they can put the groceries directly into the fridge, attempting to give it a more personal feel. I see this as a great weakness, especially after what happened with the Equifax scandal we discussed in class. The risk of information leaks are so high right now, especially in businesses involved in this degree of competition. Technology is not always the most reliable and this advancement could be far too invasive for people to get on board with.
In my opinion, this attempt to get a creative and high tech edge may be too much for consumers to handle. Technology is not secure enough for people to trust in a company that doesn’t have a huge online security presence yet. It also may not be the right time for Walmart to try and advance into the same lane of sales as Amazon who has already made it clear that they are dominating in both the restaurant business and the online sales business.
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