Amazon and Walmart are locked in an epic battle for the future of retail. As the former moves into the physical world with bookstores and its purchase of Whole Foods, the latter builds a sprawling omnichannel ecosystem. Essential Retail brings you five ways in which the old timer is taking the fight to the online behemoth.

5.) Leveraging its store network

“Walmart is innovating through technology,” says Stewart Samuel, programme director IGD services Canada, IGD. “Convenience is being elevated as a driver for customer behaviour, as lifestyle changes and digital organisations set new standards and expectations around fast delivery. Against this backdrop, Walmart is focusing its efforts on better meeting the needs of busy families, including investing in new technologies and adjusting its marketing approach.”

Walmart is testing several different eCommerce fulfilment solutions. It now offers grocery pickup from 1,100 locations with plans to add a further 1,000 next year. It has also been testing a 24-hour automated pod in Oklahoma for convenient pickup. The 20x80ft pod can hold up to 30,000 products, including frozen and refrigerated items. To order from the pod, called ‘24-Hour Pickup’, customers choose the ‘self-service’ option when placing an online order with the nearby store. The shopper then receives a confirmation code that they enter at the pod, and within 60 seconds the order is received. One of the key benefits of this model is that the service is available when the store is closed.

The retailer is also set to roll-out 100 Pickup Towers in the US as part of its focus on improving the in-store eCommerce experience. It started testing the Pickup Tower concept last year. The 16ft high automated unit works in a similar way to a vending machine. A customer collecting an eCommerce order uses the machine to scan a code on their phone, which then sets about retrieving the package. The system is also similar to pick-up lockers, which the retailer has also been testing, but these can hold significantly more items. Around 15 units have been deployed to date.

Last but not least is a new eCommerce fulfilment model. Through this programme Walmart store associates make deliveries to customers’ homes at the end of their working shifts, delivering general merchandise products which are ordered online from Walmart.com and Jet.com. “The pilot has been up and running for one month, with tests in place at two stores in New Jersey and one in Arkansas. The programme has been developed quickly, moving from conception to pilot in only a few months. Participation is voluntarily and enables associates to be compensated above their regular wage,” says Samuel.

In conclusion - who will win the race?

Amazon’s market capitalisation is approximately $535 billion, which is around $235 billion more than the top eight retailers in the US, including Walmart. So, they have a lot of cash to play with and to invest. Walmart has done more than most, but can it really hope to keep up with the Jeff Bezos driven juggernaut?

“When I was young my dad told me, ‘if you ever get attacked by a gang of kids go for the big one first’. I guess that is Walmart’s, albeit slow, response to the ever-increasing behemoth that is Amazon,” says Huw Thomas, MD at Paul Mason Consulting (PMC). “Psychologically, I don’t like Amazon, it has too much power and way too much information about me. However, there is barely a day goes by that at least one of their parcels arrives at my house. No matter how much I would prefer to shop elsewhere, the ease and value of shopping with Amazon is entirely compelling. My deliveries are free and I sometimes get deliveries in the afternoon for items I ordered in the morning, even at weekends. When I do get problems, they are always resolved with ease. Added to that I can now watch and listen to an endless stream of visual and audio entertainment available in the blink of an eye.”

Bhavesh Unadkat, principal consultant of retail customer engagement at Capgemini Consulting, takes a different tack. “I don’t think Walmart’s omnichannel strategy is that different to what many multi-channel retailers are trying to achieve but given their store network, the prices they can demand given their volumes and their investments into digital native brands, they have a great chance of keeping up with Amazon. Both brands have challenges ensuring they stay relevant and true to their offer, integrate their acquisitions at speed and deliver on their promise of allowing customers to shop seamlessly with ease and pace of delivery. For Walmart it is key they focus on what they do best and not become a reactor to everything Amazon does. There is space in the market for both to succeed and without doubt we will see them both innovate and be creative on how they serve their customer and manage their operations.”

Read the rest in the series - Five ways Walmart is taking on Amazon:

1) One online shopping mall to rule them all

2.) Walmart acquisitions

3.) Creating an ecosystem of value for customers

4.) Mobile payments