After some 19 years of struggling with E-Commerce, Walmart is once again learning that managing a merged channel retail strategy is almost never going to beat a well-run pure-play e-tailer like Amazon when it comes to online sales. Was reminded of this point courtesy of a wonderful stat in a Wall Street Journal story that ran Wednesday (June 19), which compared Amazon and Walmart's supply chain costs: "Wal-Mart's online shipping can cost $5 to $7 per parcel, while Amazon averages $3 to $4 per parcel, analysts say—a big difference considering some of Wal-Mart's popular purchases are low-cost items like $10 packs of underwear."
There are many factors behind those numbers, but it really comes down to the fact that Walmart's massive global supply chain needs to support more than 4,000 physical stores—a feat that Amazon need not worry about. Given that huge physical burden, Walmart's costs are quite impressive. But no one ever said that fighting against a pure play was particularly fair. Like all major chains, Walmart initially had two choices. Run the chain as one big happy merged channel family or separate and run online and offline as separate companies. Neither approach is perfect.
