Walmart’s Marketplace Could Soon Have One Big Advantage Over Amazon

Walmart is escalating its ongoing war with Amazon by cozying up to both online shoppers and small to midsize vendors. The retail giant recently alerted sellers on its platform that it’s attempting to make all returns a “consistent and easy experience” for consumers shopping its site — even its marketplace.

Vivaldi Partner Pete Killian speaks to Sourcing Journal about Walmart’s intentions: “This new policy helps the Walmart brand by putting it at the center of a positive experience, a smooth return process.” He also mentions that the move is clearly meant to position the big box chain to scoop up more small to medium-size sellers, a group Amazon has been abandoning in favor of bigger opportunities. Walmart’s focus on third-party returns shows the retailer is looking to expand its online offering by stepping into what had been Amazon’s territory.

Until now, Pete says, Amazon had been the home of fledgling and smaller sellers. Today, the company is no longer catering to that group. Instead, Amazon is modeling the Pareto principle by reaching deeper into the pockets of a smaller field of players: “E-commerce is maturing beyond small, long-tail, mom & pop marketplace sellers and brands—and big brands ‘want in’ on the exponential growth potential. To tap into that growth potential, they need Amazon’s platform—few brands are big enough to go direct.”

While Amazon offers scale, what it’s really after, Pete says, is the big money it can make through its advertising platform. And as Amazon focuses on the larger players, it leaves the door open for Walmart. “Walmart realizes that in an age of exponential growth, small frictions have big negative impacts down the road. So they’re removing as many frictions as possible to court small sellers and improve buyers’ experience, to smooth the way to their exponential platform growth,” he says, adding that it’s an about face for the retailer that had been focused on “mighty” brands.

Read the full article on Sourcing Journal (subscription required).