Opposites attract. And opposites put on the best fights.
In one corner stands a yellow smiley face, hearkening to the ’70s and feeling groovy.
In the other stands the formidable letter A. Nothing friendly, nothing warm. Just the first letter of the alphabet, one that represents, in the words of my WWE-loving younger son, attitude.
Smiles vs. ’Tude. Wal-Mart vs. Amazon.
The convenience channel has just gotten a lot more interesting. And I’m happy to say that instead of fear, you’re expressing confidence.
“I’m really excited to see what we can learn from them,” one West Coast executive told me. “I’m not sure if they’re going to be competition. We do fresh, and I don’t think Wal-Mart or Amazon Go are going to. But we can learn a lot about their technology and distribution.”
An East Coast executive exuded the confidence of MMA extraordinaire Conor McGregor. “I’m really interested to see what comes of all of this,” he said. “Wal-Mart has not been able to fi gure out how to apply their advantages to the small box, and I have my doubts that they’ll succeed. But I give them credit for trying.”
As for Amazon? “Not sure,” he said. “I think the idea of no checkout lines is very interesting. But there is a balance between technology and human touch, and also whether they’re just going to be another Tesco with a lot of prepackaged food, but nothing made on-site. If you’re going to sell (prepackaged) freshness, then you have to make the food that day, like Pret a Manger.”
This brings me to our cover story on Amazon. Abbey Lewis, Jackson Lewis and I talked to more than a dozen experts, most of whom have few ties to our channel. We spoke to former Amazon execs, writers with books about Amazon, retail consultants with decades of storytelling and Wall Street analysts.
The picture of Amazon is one of brilliant, logistical skill, euphoric passion for consumer-shifting technology and, perhaps most revolutionary, a new definition of consumer engagement.
While the best of the retail world accentuates the power of people and the magic of the human touch (think Starbucks, Wal-Mart, Trader Joe’s and Apple), Amazon—and its new 1,800-square-foot site in Seattle—defines consumer satisfaction from a DIY view, to create the easiest and most efficient transaction experience possible, with the least amount of interference.
Amazon’s argument is compelling. How many of us prefer walking into a store anonymously and browsing without being browbeaten by a store associate? Yes, give us help if we want it, but let us own that relationship.
That is why the Amazon Go app, which lets you buy the item as soon as you pick it up, is so intriguing.
As for Wal-Mart, its pilot c-store in the Denver area integrates the company’s legendary distribution model with its more recent investment into digital ordering and delivery.
Unlike Amazon, Wal-Mart needs no introduction to the world of brick and mortar. Its challenge has been and remains how to create a miniature version of its big-box excellence. In the past decade, it has rolled out Neighborhood Markets, Wal-Mart Express and Wal-Mart on Campus. None has achieved the scale corporate expected.
There’s a reason for that: It’s because c-stores can never be miniature Wal-Marts. C-stores have their own beauty and charm. Despite a plethora of models, c-stores are unique. In many ways, they are what Starbucks founder Howard Schultz described his cafes to be: a third place, a sense of community.
So what’s my prediction for Amazon Go and Wal-Mart Pickup With Fuel?
I expect the former, with its sleek concept, to achieve urban success, to compete with gas-free 7-Elevens and grab-and-go QSRs in more upscale metropolitan markets such as Seattle, Boston, Chicago, New York and San Francisco. I do not believe it’s a threat to most of us in suburban and rural markets. The model is less about people and more about expedience.
Wal-Mart’s model is more traditional in terms of selling gas and coffee, but with the convenience of serving as a pickup site for online grocery orders.
Wal-Mart’s ultimate success will rest on costs and its ability to achieve sufficient turns and activity on its ascending grocery business.
The grocery piece is hugely important to Wal-Mart, whereas the convenience aspect is almost secondary.
Ultimately, Wal-Mart’s brick-and-mortar success will lie in the success of its digital grocery enterprise.
Mitch Morrison is vice president and director of Winsight’s Retail Executive Platform. Reach him at mmorrison@winsightmedia.com.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.