War of the Mega Retailers/Wholesalers

War of the Mega Retailers/Wholesalers

How Amazon, Costco, Sam’s Club, and Walmart Adapted To A Covid-19 Economy, CDC Protocols, And Consumer Needs

Amazon made several changes to adapt to a Covid-19 economy. One of the changes was dismissing some employees to reduce operating costs. The company also reduced leave benefits by reducing the leave days from ten to five. Workers who tested positive for COVID-19 were allowed to take a maximum of 40 hours off instead of the two weeks that were initially allowed. The company also made some operational adjustments to meet CDC protocols. For instance, cleaning intensity and frequency were emphasized in the warehouses, and employees were required to regularly sanitize their hands and places frequently touched to prevent contamination and infection. The company also issued all employees personal protective clothing, such as masks and gloves, to protect them from infection. Another measure that was taken to comply with CDC protocols was the vaccination of employees. The company sponsored more than 1500 immunization sessions for front-line employees within the premises and offered rewards to encourage employees to get vaccinated. According to Du et al. (2022), the company offered a $40 per dose incentive to motivate employees in the United States to get vaccinated. The company also considered customer needs when making adjustments. For instance, it prioritized selling emergency goods by changing the rules on the Amazon platform to avoid many non-essential goods that could cause delays in delivering essential goods such as food products. The company also used same-day delivery to ensure that the products got to the customers on time.

Costco survived the pandemic by launching the CostoGrocery segment, which delivered non-perishable commodities to customers at their selected delivery points. The company also partnered with Instacraft facilities to guarantee same-day deliveries of groceries to customers in different locations. One of the operational changes made to adhere to CDC protocols was eliminating samples to reduce customer contact with surfaces that could be infected. The second change was limiting the number of shoppers in the store by bringing in one customer at a time. Costco also required every employee to wear a mask or cover their face. Special shopping hours were added to the company’s operating hours for vulnerable communities. The company also considered customer needs to sustain a competitive advantage during the pandemic. The main consideration was selling products at a discounted process to increase affordability. According to Zack (2020), discounted prices made Costco the preferred shopping place for customers during the pandemic because essential and non-essential goods were available at a discounted price. The company also ensured that all deliveries were handled within the customer’s specified time because most customers were confined in their homes due to movement restrictions.

Sam’s Club focused on improving its online operations to adapt to the Covid-19 economy. The company created an online application that allowed customers to create a personalized shopping list before visiting the company’s stores so that they could spend less time at the stores. The company also adapted to CDC protocols by limiting operating hours, deeper cleaning, and installing a sneeze guard at the checkout (Roche, 2020). It also observed social distancing rules by regulating the number of customers in the store and putting up signs to indicate where customers should stand to maintain social distancing. The company used its online application to meet customers’ needs by ensuring that the stores were not crowded. Customers’ needs were also met through the company’s ship-from-store program that enabled customers to purchase products from the store and wait for the store to deliver to their destination.

Walmart emerged as one of the retail giants that remained successful even after the Covid-19 pandemic. The company adapted to the pandemic by adjusting its operating hours and creating shopping times for the elderly. The main change made to adapt to CDC protocols was removing the 20% capacity limit in its stores and monitoring customer traffic during peak periods such as holiday weekends. The company also complied with CDC protocols by requiring all customers and employees to wear masks. Employees within the stores also sanitized shopping carts to protect customers from being exposed to the pandemic. Walmart also installed sneeze guards at all registers and placed social distancing labels on the floors. The company adapted to meet customer needs by offering same-day delivery services and stocking restrooms with supplies. The company also placed sanitizers at its stores’ entrances so that customers entering the store could sanitize.

The Most Competitive Company In The Retail Segment

Walmart is the most competitive company in the retail segment and has managed to retain a high competitive advantage over the years. The company enhances its competitiveness by setting low prices, competitively bidding for contracts, and collaborating with vendors to maintain low inventories through the Just-in-Time or Vendor-Managed Inventory management method (Mazouni, 2018). The company’s use of Electronic Data Interchange with its suppliers has enabled it to reduce the cost of paying bills and ordering products by giving vendors direct information about each product’s inventory levels at every Walmart store. Therefore, the company can control the schedule of product reception, leading to an accurate flow of products across all its stores. Walmart also derives its competitive advantage through its transportation system that helps ship goods from its warehouses to stores in different locations. Therefore, the company can deliver goods to customers on time and restock its stores quickly. The company also has a developed data program that enables it to have instant reports of the items demanded in its stores, thus creating customer loyalty by ensuring that the products on demand are always available. Kotler & Keller (2016) argue that customer loyalty can be generated from the perceived product value. Therefore, Walmart creates high perceived value by offering high-quality products and services to attract and retain customers.

Walmart Gains In The E-Commerce Segment And How They Can Continue To Expand Their E-Commerce Operations To Compete Against Amazon

Walmart has made significant gains in the e-commerce segment in the Covid-19 economy based on its revenue and profits. According to Rivas (2021), the company gained 21.3% during the first wave of the pandemic in 2020 by leveraging opportunities such as bulk shopping. The company also increased its market share throughout the pandemic by offering discounted essential products. Although it is currently considered one of the retailers that continue to thrive in the COVID-19 economy, various considerations can create a strong competitive advantage over Amazon. One of them is creating flash sales regularly to attract more customers and create awareness of the company’s discounted prices. The company can partner with major consumer goods brands to create flash sales for products that are in high demand. The second thing is offering different payment options for online customers, including Bitcoin.

References

Du, J., Xu, J., Zeng, X., & Zhu, L. (2022). Amazon’s strategic shift in the face of the COVID-19. Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022). https://doi.org/10.2991/aebmr.k.220603.166.

Kotler, P., & Keller, K. L. (2016). Marketing Management. Pearson.

Mazouni, M. (2018). The effect of global investment decisions and financial risk on multinational corporations: Walmart Corporation Case Study. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3257136.

Rivas, T. (2021). Walmart was a pandemic winner. How can it keep the momentum going in 2021? Walmart Was a Pandemic Winner. How It Can Keep the Momentum in 2021. | Barron’s. Retrieved November 25, 2022, from https://www.barrons.com/articles/walmart-was-a-pandemic-winner-how-it-can-keep-the-momentum-in-2021-51609493401.

Roche, J. L. (2020). How the coronavirus outbreak has changed life for Sam’s Club and its shoppers. Yahoo Finance – Stock Market Live, Quotes, Business & Finance News. https://finance.yahoo.com/news/sams-club-ceo-kath-mclay-on-retail-trends-during-covid-19-131939427.html.

Zack. (2020). Costco (cost) adapts to the New Normal as Shoppers Go Online. Yahoo! Finance. Retrieved November 25, 2022, from https://finance.yahoo.com/news/costco-cost-adapts-normal-shoppers-145302096.html.

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Research on Amazon, Costco, Sam’s Club, and Walmart.

Familiarize yourself with how each company started their business model, and compare their retail/wholesale operations (pre-COVID-19 and during COVID-19).

War of the Mega Retailers&Wholesalers

* How have all four retailers/wholesalers adapted to a COVID-19 economy, CDC protocols, and consumer needs?

* Before COVID-19, under normal market conditions and a booming economy, except for Amazon, which of the other three would be the most competitive in its segment? Why?

* In a Covid-19 economy, Amazon’s 100% e-commerce model has dominated the consumer goods market. Has Walmart made any gains in the e-commerce segment? How can they continue expanding their e-commerce operations to compete against Amazon?