I just started buying shares of Walmart, and will continue to do so, because I think they'll end up doing better than Amazon. Here's some of my reasoning, and I'd like to here what other have to say.
Here's the important question I ask: which is more feasible? Building an online presence (Walmart's challenge)? Or building the physical and logistical infrastructure that can deliver household goods quickly and at a low cost (Amazon's challenge)? I think these are the 2 biggest challenges that each business has. And I think the obvious answer is that building the online presence is going to be much more feasible.
Walmart is already the 2nd most popular online retailer. And after purchasing Jet.com, Moosejaw.com, and a few others, they are poised to build an even more incredible internet presence. It is very easy to buy internet presence. And Walmart has the capital to do it. It is not easy to buy and build an infrastructure (Amazon's challenge).
Also, I don't know why everyone thinks Amazon is the cheapest. Walmart has much better prices to attract the price-conscious consumers: http://ift.tt/2nkhXtg
And in case you're shopping for junk on Amazon, Walmart made a nifty "Savings Catcher" that you install in your web browser. And if you're looking at something on Amazon, it'll pop up and let you know you can get it cheaper at Walmart. http://ift.tt/1dZy3wN I don't think savings catcher is going to boost their stock. But I do think it shows that Walmart is making strides to inform the public that they can offer a better ecommerce experience than Amazon. And it also shows me that they're willing to invest money in creating tech products (although it's a minor tech product). But I do see it as them trying to get innovative.
And Walmart just offered free 2 day shipping, without having to sign up for a Prime membership. And the minimum cost for your online order is only $35. And as a response, Amazon just secretly lowered their online minimum for free shipping from $50 to $35: http://ift.tt/2nkl4Bd
But here's the biggest advantage: Walmart has the physical infrastructure in place. Walmart has over 5333 brick and mortar buildings, that are more than stores: they're essentially warehouses that people can walk through, that also have a grocery store. And although Amazon doesn't publish how many fulfillment centers they have, this site estimates that as of March 2017, they have about 363 centers world wide: http://ift.tt/1hiYHCZ
So for every 1 Amazon location, Walmart has nearly 15, which is a pretty incredible advantage when trying to get products to cosnumers quickly. And if Amazon thinks they're going to be ground breaking by coughing up check-out free grocery stores, Walmart's way ahead because they already have the grocery stores in place. And all they need is some tech to complete the "check-out free" aspect, which they already made: http://ift.tt/2nkctOY
And there are more reasons why I like Walmart much more than Amazon. I think Doug McMillon is a great CEO, and is spending money wisely to not only increase their online presence, but to merge that online presence with the physical presence of their established storefront, which will ultimately create a new shopping experience that Amazon can't offer. He's also raising minimum wage for their employees, which he's hoping will improve customer experience by dealing with happier employees.
My only concern is that historically, their stock just doesn't perform well. It's kinda flat-lined over the past 10 years. Their PE stays humble (unlike Amazon's). And I think many investors look at them as a boring, dividend paying investment. But i think between their growing internet presence, and their established infrastructure, buying power, and logistic knowledge, they're going to create a whole new way of shopping that involves both internet and physical storefront, which may excite investors.
And if it doesn't pan out, then I'm left with a flat-lining stock that only pays out dividends.
Submitted March 09, 2017 at 05:29PM by sirloinfurr http://ift.tt/2lIPZLy
