Strategic Acquisitions: Amazon vs Walmart

Acquisitions by Amazon and Walmart 2017-2018 face-to-faceM&A is one of the main strategic options for companies that want to ensure their success in a very competitive and globalized market. Even more, in a hyper-connected society and customer centric economy. The retail industry is not any more about increasing the number of macrostores in order to have more efficient economies of scale, better negotiation power, more traffic, higher sales…Having a real estate expansion strategy supported with excellent operations is not the ABC on how to succeed in the online era.

The United States has been the place where more retail dinosaurs expanded thanks to a huge market (Population >300 Million), no borders or custom duties, same language and currency, high level of car owners that can fill up parking lots in department stores or Malls…and an extreme consumerist society based on the middle-class. Today, we are seeing the retail apocalypse in US, but it´s also an interesting place to analyse how traditional companies are evolving . It´s a Darwinist fight where companies are already adapting or dying.

The first consequence is that stores are closing. In US, more than 5,000 stores closed in 2017: Macy´s (68), Sears&KMart (358), JCPenney (138), Michael Kors (>100), GAP (200), Abercrombie&Fitch (60). Even Nike and Under Armour have been struggling. At the same time, we see many niche companies appearing mostly in NYC and California , offering new business models like Bonobos (showrooming), Rent The Runway (Fashion As a Service), The Trunk Club (subscription-based customized selection of clothing), Everlane (Radical Transparency), and so on. Those companies are part of the long tail and offer new ways to approach Millennials and gen Z consumers.

What is Walmart, the biggest global retailer, doing to adapt to this change of era?

Do you remember Walmart´s expansion? From its first store in Arkansas (1962), Walmart expanded with a larger format of stores than its competitors, wide assortments and low prices. Today, Walmart employs more than 1.5 million U.S. associates at more than 5,000 stores and clubs nationwide. One of the growth success factors is that stores were located in rural areas and small towns (having a store there, permitted its population to shop nearby and not waste their time driving to the nearest city). Walmart grew from inside out, starting in the rural south and Midwest (Arkansas, Missouri, Oklahoma), then spread like wildfire to the West and East (see the video below).

Walmart Store growth history MapWalmart store growth in US

Walmart is not KO (see its stock value above). It´s just adapting to new business economics where omnichannel is a must. Its innovative DNA make us think they would compete to Amazon and their latest acquisitions confirm this guess. Some examples of continuous innovations were the EDI System (Direct to Customers suppliers), store-based pricing (EDLP), Big Data management (scanning, system to track refunds, best-in-class forecasting and assortment optimization), among others.

Walmart Store No 8 Digital Incubator

Moreover, Walmart launched a Tech Incubator, Store No 8, in March 2017. Store No 8 is headed by Seth Beal, previous senior vice president for global marketplace and digital store operations at Walmart. One of its objectives is creating businesses that will transform the future of retail.

At Store No 8 we are hyperfocused on discovering the ideas, people and technologies that won’t just transform the future of retail, but will also change the world.

Walmart stock evolution

Retailers only option to compete in the retail indsutry is to adapt to the Internet, not only creating an e-commerce site that delivers in 1-2 hours but creating a true customer journey total experience for their loyal customers.

Walmart already started to face the retail transformation but we will see how it is capable to hold its offline stores with the risk of “See in store, buy online” (or try/fit offline, purchase online). Amazon is taking profit of thousands of offline competitors that are used as showrooming (customer can touch, feel, test the product, fit the clothing, adjust the size) while the final purchase is driven thru Amazon or other online players because of the price. If managing prices across channels was difficult, online bring it to the next level. In 2017, 80% of shoppers compare prices online before shopping in stores according to Market Track. But retailers can still compete offering a differentiate customer service and in-store experience.

Walmart and Amazon´s Acquisitions by Area during 2017

Amazon and Walmart Acquisitions in 2017

Walmart and Amazon acquisitions

Retail Titans are clearly betting for acquisitions in order to accelerate their digital transformation. Some of the pros of acquiring companies are speed, meeting stakeholders expectations or new resources (e.g. people, technology). “Mergers and acquisitions (M&As) are increasingly being seen as an antidote to low or no organic growth,in a commercial world where established retail and consumer goods companies find themselves struggling for survival in the face of radical consumer change and a series of continuous, devastating attacks on their markets and historic value propositions” (Bob Haas and Bahige El-Rayes, A.T. Kearney. 2017. Retail Touchpoints).

Walmart. Acquisitions is part of their transformation strategy and since 2016, Walmart acquired (e-commerce), Bonobos (online retailer/showrooming), Moosejaw (online retailer) and Parcel (last-mile delivery). The retail giant from Bentonville is clearly betting for Digital. Walmart Online sales skyrocket during the first quarter of 2017 (+63% like for like) showing the return on digital operations investments.

Amazon. The spread of Amazon sales, in every geography, year after year, make us predict that Amazon will be the first “global leading retailer” very soon. Amazon is the master of Long Tail business model and it´s the platform that is pooling many different actors across the customer journey to respond to specific customer needs. This is why Amazon is an online retailer, an IT company, a personal shopper, a logistic provider,and so on. Amazon is still not having profits in their e-commerce site but is growing rapidly thru acquisitions in order to enlarge its ecosystem thanks to its excellent performance with Amazon Web Services (AWS). In fact, some of AWS clients are Netflix, Spotify or Salesforce.

Amazon is an example of ecosystem that understands a business in correlation with many different industries, trying to connect and optimize synergies. It´s about products and services such as Amazon Fresh, Amazon Studio, Kindle, Prime, Web Services, Alexa, private label fashion brands, Music… Wikipedia define it simply as a cloud service provider and online retailer. But Amazon is going beyond what´s tangible and invest on industry 4.0 enablers. Its latest acquisition, Whole Foods, by $13,7Billion, made a big impact in the market, the industry and was a serious threat to traditional retailers. The objective is managing every contact point with its potential customer´s journey. Going into bricks means that the next battle has already started: the Omnichannel one, where Walmart and Amazon are competing face to face in the Grocery industry.

Amazon stock evolution

Who are the latest acquisitions of Walmart and Amazon (details from

WALMART´s acquisitions 2016-2017 by area

Online Retailers

  • is an online retailer that sells household items, electronics, pet products, furniture, sporting goods, clothing and other related items (acquireed in 2016).
  • Bonobos is an e-commerce-driven apparel marketplace that designs and sells men’s clothing.
  • Moosejaw is an online retailer of jackets, clothing, footwear, tents, backpacks and travel products for men, women, kids and babies.

Last-Mile Delivery

  • Parcel is a provider of last mile delivery services for online retailers.

WALMART´s acquisition in 2018

  • Spatialand is a small VR platform and content studio.
  • Flipkart is an eCommerce portal that offers apparels, footwear, mobile phones, furniture and computer accessories.
  • Cornershop is an on-demand delivery platform that enables users to order and buy groceries from local supermarkets.
  • Bare Necessities operates as an online specialty retailer of branded and designer intimate apparel and underwear for women and men.
  • Eloquii is a designer, manufacturer and online retailer of apparels, shoes and accessories for women.

According to CNBC, Walmart has a big year of e-commerce investments planned (read more). The upcoming initiatives include a revamped website with a focus on fashion and home goods. According to CNBC report, the site will also feature’s “smart cart” technology, which provides shoppers cheaper prices if they pack more items together in one box, use a debit card when paying for purchases or opt out of returns (Feb 2018. Walmart has big online plans for 2018 – Feb 2018 – CSA).

AMAZON acquisitions 2017 by area

Artificial Intelligence

  • Body Labs is an AI platform that utilizes computer vision to generate three-dimensional human motion and shapes for gaming and shopping applications.
  • Graphiq is an Artificial Intelligence firm that provides data visualization solutions for researchers, journalists and enterprises.

Internet Software

  • GameSparks is a cloud-based backend development platform for game developers to build the server-side features of their games.
  • Do provides a meeting management tool for organizations to manage tasks, meetings, contacts, notes and projects at one place.
  • is a data loss prevention platform that allows organizations to identify and stop data breaches from targeted cyber attacks.

IT Services

  • Thinkbox is a developer and provider of render management and geometry caching tools for gaming, media design and marketing industries.

Foods Retailer

Whole Foods

Whole Foods store in San Diego, California (image: DLEnglish Design)

  • Whole Foods Market operates a chain of natural and organic food supermarkets that offers snacks, beverages and body care products.

Online Retailer

  • is an online retailer that offers clothings, bags, electronics, footwears, accessories and more related products for men, women and children.


  • Blink develops a wireless home security camera that allows users to monitor their children, pets and home via smartphone.

AMAZON´s acquisitions in 2018

  • Sqrrl Data, Inc. is an online cyber security platform that provides behavior analytics, threat hunting and incident investigation services.
  • Ring is a smart home security firm that develops and offers video doorbell and connected security devices for homes and community spaces.
  • PillPack delivers pre-sorted daily medications that helps patients to manage and take prescribed medicines regularly.
  • Tapzo is a mobile application that allows users to order foods, book cabs, check live scores, pay postpaid mobile and electricity bills.

In the short-term, during M&A, the target tends to win, while the bidder loses but this wasn´t the case. After the acquisition of Whole Foods was announced, Amazon’s shares jumped by 2.4%, adding another $11 billion to its market valuation, thus making the whole acquisition nearly free…Since listing its stock publicly in 1997, Amazon has acquired nearly 80 other companies, including movie-and-TV information provider IMDB, the video game streaming site Twitch, and the audiobook service Audible, among others (2017 – Howard Yu – Why M&A Strategy (And Your Retail Experience) Just Changed Forever – Forbes).

Walmart and Amazon Acquisitions from 2013 to 2017

Acquisitions from 2013 to 2017

Whole Foods will bring to Amazon the possibility to test its online data analytics while having brick-and-mortar customer´s buying insight habits (shopping missions, key value items, segmentation…). Amazon will be able to transform brick-and-mortar to a digital store offering the right assortment, in the right place, at the right time. The acquisition also means more data from categories that are more difficult to manage due to its perishability, like Fresh Food.

Another key value input from the acquisition is the possibility to offer a “made to measure” shopping experience to the individual, and not to a target segment or group. As a customer, you will receive customized push notifications according to your historical sales, online searchs and recommendations, special promotions and precise offers according to your geolocalization inside the store. Marketing enabled by industry 4.0 will linking online and offline will bring communication from a broad interest audience to a highly segmented audience. It´s again the Long Tail effect, going from hits (wide lookalike) to niches (narrow lookalike).

Amazon will understand your needs thru more contact points across the customer journey than other pure players or offline competitors. Bezos´s empire is building the omnichannel journey starting with Foods, but we will probably see how it enters into retail electronics, fashion, coffee shops, restaurants… Currently, Amazon is already testing the offline thru Kohl´s or Amazon Books. But don´t underestimate Walmart…

Walmart Grocery 24 hour pick up


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