Significant steps taken by Amazon and Walmart have left a mark on the retail sector. Jason Del Rey, tech correspondent for the business magazine ‘Fortune’, points to the launch of Amazon Prime as one of the key moments. The video-on-demand service strengthened customer loyalty through unlimited deliveries and additional services, such as streaming and photo storage. Walmart, in turn, used its stores as distribution centres during the pandemic, giving the company a decisive advantage over retailers only operating online.
Paid-for memberships vs. low prices
Del Rey reveals the two companies pursue different approaches to customer loyalty: Amazon relies on paid-for memberships with value-added services, while Walmart’s main strategy has long been low prices. However, Walmart has also begun to establish its own membership model over recent years. In Del Rey’s view, which strategy will prove more successful long-term remains to be seen.
Rapid decision-making
Smaller firms can learn important lessons from the strategies of giant companies. Del Rey believes rapid decision-making gives both groups a crucial competitive advantage. He also highlights the fact that platforms, such as Shopify and TikTok, open up new opportunities for smaller companies to compete against the giants and build a loyal customer base. Shopify promotes customer loyalty through tailored solutions for small businesses, while TikTok’s shop feature enables close interaction between brands and users.