Walmart’s convergence with Amazon – Axios

Walmart reported better-than-expected earnings this morning, thanks in part to like-for-like sales growth of 5.6% for the fourth quarter, but it also noted that its advertising services business generated some $2.1 billion. of sales.

Why is this important: It wasn’t too long ago that industry insiders predicted Walmart’s demise, but now it can go hand in hand with Amazon after investing heavily in e-commerce and branching out into services ranging from advertising to health and finance.

To note : Amazon’s distribution system, after all, was built in the late 1990s by logistics manager Jimmy Wright, a former Walmart executive.

Rollback: The legacy discounter, once an unstoppable juggernaut reviled for destroying local businesses in small towns across the United States, has found itself facing obsolescence – the terror of all retailers.

  • But Walmart woke up one day, picked up a newspaper, and read something called the Internet.
  • Luckily, it wasn’t too late and the big-box giant started investing billions of its cash flow into its digital transformation.
  • Much of that money has gone into acquisitions, from Jet.com for $3 billion in 2016 to India’s Flipkart for $16 billion in 2018.

The last: Today, Walmart and Amazon are battling it out, with Amazon opening physical stores to make shopping more convenient for its customers, while Walmart offers high-margin online services. Looking back, it feels like the convergence of Walmart and Amazon (and physical and online retail) was always destined.

Between the lines: Walmart’s most recent purchases show it is turning to services and platforms, buying telehealth provider MeMD and ad-tech solution Thunder.

Richard Collings writes the Axios Pro Retail deals newsletter. Start your free trial at AxiosPro.com.

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