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Amazon: 80/20 Rule Critical For Retailers Claims Former Woolworths Boss & Walmart Director

Amazon: 80/20 Rule Critical For Retailers Claims Former Woolworths Boss & Walmart Director

Unseating Amazon in the Australian market can be achieved according to Roger Corbett the former CEO of Woolworths and a director of US retailer Walmart who is now taking it right up to the online retailer who is set to launch in Australia soon.

In an exclusive discussion with ChannelNews Corbett said that what retailers need to do in taking on Amazon is concentrate on the 20% of products and categories that deliver 80% of the sales.

Still a consultant to the Chairman of Walmart, Corbett who was highly successful in growing Woolworths in Australia said that Walmart is currently concentrating on the fundamentals.

He said that freight was set to be a problem for the big US online retailer along with the vast range of products that they sell”.

He believes that the model now being adopted by Walmart online, who last night delivered a record result despite a head on fight with Amazon is a strategy that will work.

Walmart reported a 50% increase in U.S. online sales during the three-month period that ended Oct. 31. The strong financial performance drove up the company’s stock price by 9% to $97.99 in overnight trading.

US analysts believed that taking on that the biggest player in e-commerce was a tall task, maybe even impossible task. But Walmart is now giving the online titan a run for its money.

“It won’t become Amazon, but it doesn’t have to,” Clement Thibault, an analyst with Investing.com, said last night after Walmart reported its latest earnings. “It has to make sure it remains a viable alternative to Amazon,” he added. “The pie is big enough to sustain multiple players.”

Walmart. which has been challenging Amazon by adding products, partners and perks, saw online sales soar in its most recent quarter.

Walmart also continued to outpace many of its peers with increased revenue and traffic.

“We have momentum, and it’s encouraging to see customers responding to our store and e-commerce initiatives,” Doug McMillon, Walmart’s president and CEO, said in a statement.

The company’s moves to revamp its stores and hone its customer service appear to be paying off as sales at U.S. stores open at least a year — a key industry measure of financial performance — rose 2.7%. Traffic, which has been dipping at many retailers as more consumers shop online, climbed 1.5%.

The retailer has been shaping up as one of the key competitors to Amazon, buying online marketplace Jet and niche sites like menswear retailer Bonobos, to attract a more affluent, fashion-conscious shopper.

Walmart tripled to more than 70 million the number of items available on its website. Earlier this week, it announced that it will partner with upscale retailer Lord & Taylor to feature a branded shop on Walmart.com starting next year.

In the meantime, Walmart has been making the most of its more than 4,700 U.S. stores. It offers discounts to customers who pick up purchases they’ve made online, and will roll out the ability to retrieve online grocery orders to an additional 1,000 location next year.

Other moves include the launch of a speedier returns process that starts with a few clicks of the Walmart app, and ends with a designated line at a local store. And Walmart is paying some employees extra if they drop off orders on their way home, a service that may eventually be expand.

Shoppers can also head to stores because some items are cheaper there than online, a difference that Walmart.com displays by putting the duelling prices side by side.

“There are lots of cases where it’s just cheaper to sell products out of a store,’’ Marc Lore, president and CEO of Walmart eCommerce U.S., said. Showing the two prices is a way to be “transparent” he said, and that “there are different ways to get products and there are different costs associated with that.’’

Neil Saunders, managing director for retail consultancy Global Data, highlighted Walmart’s success with its brick-and-mortar locations at a time when more people are shopping using mobile phones and laptops.

“Although online has been a success story for Walmart, the second reason for its U.S. growth is the performance of stores,” Saunders said in a note. “For a retailer of its size and scale, we believe that Walmart’s ability to keep its stores growing is impressive.”

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