This is Bloomberg BusinessWeek with Carol Messer and Tim Steneveek on Bloomberg Radio.
Two companies easily two of the biggest when it comes to selling us stuff. We're talking about Amazon and Walmart. Both have been Bloomberg Business We cover stories for different reasons and the subject of many, many more stories inside the magazine and also on the Bloomberg and at Bloomberg dot Com every single day. Matt, there's so many stories about Amazon and Walmart on a regular basis.
Yeah.
Absolutely, I mean, why wouldn't there be Walmart has what five hundred thousand employees or something, and you know that Paul Sweeney wants to be a Walmart reader when he's done with this career.
I had no idea.
Oh my god, I look for the Amazon. You know, we were just talking about FedEx and UPS and I almost wonder if Amazon has a real competitor in their own delivery network, right like other possible companies could use Amazon shipping instead of FedEx or UPS because they're that ubiquitous.
Absolutely, we've had to pair back a little bit because we got a little obsessed with Amazon. Anyway, let's get to it, because the two are also the subject of a new book, Winner sells All, Amazon, Walmart, and the Battle for our Wallets. The author, Jason del Ray, is with us. He's a business journalist for fifteen years, covering e commerce for the last decade. He's here in our interactive broker's studio. Nice to have you here.
Welcome, welcome, Thanks so much.
Tell us a little bit about why you wrote this book, and why you wrote it now, or how long you've been working on it.
So I've been working on about three years and long thought that while there have been some great books about Amazon, Bradstone's chief among them. He writes on your book that he did blurb a bit for me. Can I just say what? He wrote?
A revelatory account of the bloody rivalry between two ruthless retail juggernauts that are not accustomed to losing anyway.
Go ahead. Brad's been coming to me over the years and so written great books about Amazon. There's been some interesting books about Walmart, although not many in the last fifteen years. I thought to look at each in a vacuum, sometimes misses how much each other has influenced strategies and really hasn't been a deep dive into the innovator's dilemma that Walmart specifically has faced over the last twenty years.
And for those reasons and a few others which we may get into, I thought, you know, looking at inflection points and their rivalry over time and where and how they've influenced each other would be interesting for retail and e commerce folks who work in the industry, but also just smart people who care about what motivates these two companies well, and just the competition.
I mean, you know, households see that themselves in real time. Everybody I think has an Amazon app, right, and more and more people are getting a Walmart app. Is we've come to know it more online than just a gigantic big box store. Is Walmart starting to take away serious
significant market share from Amazon online? Not yet, but I think they've finally, for a couple of different reasons, connected the dots between their stores and their you know, and their fulfillment centers and their website in a meaningful way that Amazon is. You know, they worried about Walmart a long time ago, then stopped worrying when Walmart seemed just not to be active at all in the.
Space irrelevant right when it came to online.
I mean for a very long time. Amazon executives have told me for a long time we were waiting ten fifteen years for Walmart to take advantage of well their key advantage, which was a store within ten miles of ninety percent of the population, and to use that either as pickup hubs or delivery many warehouses. And they are finally doing that, but it has taken a very long time.
And so are they stealing market share? Not quite yet, but I think they are finally sort of competitive in the space, which sounds shocking to just have that be the minimum, but that's where we're at.
I want to get into the acquisition of Walmart of diapers dot Com because that was really pivotal, and I think even as we did a cover story, but I want to ask you from your reporting, these guys are massive, and I think about when I go shopping, I shop and then I look at Amazon, and I like, kind of it's kind of always my check. Are they getting too big? Both of them?
You know? I say at the end of the book that I hope that the continued competition and the fact that Walmart is finally really competitive online leads to things you know, better convenience for consumers, but also maybe better wages for employees as they compete for talent. They're both getting into healthcare.
Which is something Walmart has gotten a lot of criticism for over the years.
Correct, both getting into healthcare, and perhaps you know that is the industry that's ripe for better consumer you know, attention and and so maybe, but that's sort of an idealistic, you know, way to think about these two companies that have not always inspired you know, the you know, the greatest feelings among you know, I mean labor groups, consumer groups, small businesses and so are they too big? I mean I'll leave that to you know, regulators to figure out.
I think Walmart's days in this in the line in sorry scrutinized spotlight fire, Yeah, has sort of passed, which has been you know, I report in the book Andy Jasse has been angered by that over the years, like white like they're the biggest retailer revenue, Like what's up? And they've had to explain like it's our turn now, right, it's our turn. And so we'll be interested to see what happens with the FTC. Will that lawsuit eventually happened? And sorry, I think, guy, Well, I.
Was just gonna ask about the employees, because of course the two of them competing is good for consumers in the sense that it lowers prices.
But I can't.
Imagine how they would how that would benefit their employees. And I know they each try and put a positive spin on things like paying a fifteen dollars minimum wage or you know.
They have college college education program. Yeah, they both sort of match each other with over the years.
But they do, I mean, make a bigger margin on the backs of these employees, right, I mean, the whole point of a business like this is to kind of squeeze costs in places like labor to make more money for the shareholders.
Yeah, and they both drive drive people really hard. I have a chapter in the book that's all about how in the last five years Walmart has recruited a lot of warehouse leaders and other logistics leaders from Amazon and how they sort of imported the Amazon way and culture, which not surprisingly did not always go well. And I think as they add automation, the companies will say we've taken away some of the most menial work, some of the toughest work. But what often happens at the same time,
is the work speeds up. So we see all these states investigating Amazon. It's not because it's not because the you know, one one act in the work is really difficult. It's because of the repetition and the speed, and so I think it's a big issue. And they say they're you know, they're constantly improving safety and the like. But there's a lot of investigations and evidence that proves otherwise.
There's a lot of stuff things and I kind of mix them together. But yeah, Jet dot com, Yeah, and Walmart. Ye, talk to us about some of the kind of interesting developments. We've got about two minutes and then we'll come back and talk some more. But were these pivotal experiences.
Yeah, So, so Amazon bought diapers dot com the parent company was Quizzy way back around twenty ten, stole it from Walmart. Mark Laurie, that entrepreneur spent a few years at Amazon, starts Jet dot Com. Maybe started working on it while he was at Amazon. Not totally clear. Wasn't really working out, but a lot of attention and Walmart was needed a big you know, influx of talent make the biggest act of in e commerce at the time.
Three point three billion mark LORI comes in. You know, some successes, some failures, but the metabolism of the online sales at Walmart picks up and then they both compete. Recently in healthcare on an acquisition called pill Pack, Walmart thought it had it. I have a great anecdote in the book. CEO of Walmart, Actually here's the Amazon deal, announced that they bought pill Pack instead, tries to convince the entrepreneur that he should back out of the Amazon deal,
even though I mean it's kind of crazy. The deal is public to the world, and it just shows like in some key areas where they're trying to get first mover advantage, they've gone head to head, and more often than not it seems Amazon has one.
We want to get back to our our guest, excuse me, business journalist Jason Delray his new book out Winter Sells All Amazon, Walmart, and the Battle for Our Wallets. He is still with us here in our Bloomberg Interactive Broker studio. Tell us about meeting because you did for this book. The CEO of Walmart, mister McMillan.
Yeah, So I went down to Bentonville, Walmart's hometown, met Doug McMillan in the what they call the home office. I guess they have a new one being built. So this is the original. And it's been about ninety minutes with him. We had a sixty minute interview planned went a little over which I was I was happy about, although they did not My original pitch was to trail him for a week. That did not really work out, and that's not something that Walmart really does much of.
And so Doug, you know, I was really interested in getting to know him a little bit. He's been at that he's a Walmart wifer, but they saw him as a CEO kind of bridge generations, like, you know, they talked.
He talks about how he you know, he had an early Palm pilot and like was into tech and tech forward and they made him CEO about nine years ago, and so his challenge has been just massive and so it was interesting getting his thoughts on it to both you know, help reinvigorate the store business, which when he first came on board was struggling, while also trying to just you know, get internal buy in that Amazon could be an existential threat, which is how he called what
he called it to his executives and also board members in those first couple of years as CEO, and you know, he sees a lot of progress there, but he told me he's still dissatisfied with the speed of transformation, the
speed of change in some parts of the organization. I thought he might have one more year in him, maybe at ten years he would step aside, But there was some good reporting recently that he's going to stay on board a couple more years as they try to really make sure that this new digital DNAs is infused throughout the organization, which you know, let's be real, it's one of the biggest companies in the world. Not an easy thing to turn that ship.
I wonder what I wonder what happens if the US further d keuples from China, because both of these stores. I have to be fair, I haven't spent a lot of time in a Walmart, but I do spend a lot of time on the Walmart app and on the Amazon app, and I often try and look for products that are made in America or I just noticed that all of my choices are made in China, like everything.
And the brand name is it's something you can't exactly.
So, but do they do they make an effort to try, and I wish Amazon would have a made in America section, but they don't.
For a while. Yeah, and I thought, and I know Amazon now has like a small a small business badge, which I think there's been some reporting that's proven to not always be completely accurate.
Small business from China.
And listen, Amazon made this bet back in about twenty thirteen, the twenty fifteen that they were going to go all out courting Amazon sorry Chinese suppliers and sellers, and you know, they went growth, growth, growth, and they knew there would be some trade offs, and they've just kind of lived with it. I thought Walmart had an opportunity on their website, at least when they were welcoming in new sellers trying to build that marketplace business to take a different path.
Now maybe that wasn't no Chinese sellers, but maybe that was US sellers only or something, you know, something that would be more curated and something they could market honestly.
And they just I think mostly under Marc Luri, a previous e commerce leader and entrepreneur, they really went after just growth and expanding the seller base, and they opened up to China in a big way, and you know, I hope it doesn't blow up in some way for you know, for either company, because that'll mean that something bad happened for consumers on the marketplace business. But it just,
you know, there's a reason. It just doesn't seem natural to have every product available across the world at your fingertips without knowing a ton about the person behind it. And that's sort of where we're at today.
But Jason, can we have a world where both Amazon and Walmart exist? I mean, your book is Winter sells.
All y right? Right? No, So I think there was a long period of time where some people at the top of Walmart were concerned if they didn't start making a dent and getting their act together, that yes, in some key online categories, there would be one winner, and that would be Amazon with ninety percent market share, ninety five percent market share. I think they've done enough over the last few years that that reality does not seem
you know, in the near term. And putting aside Amazon's also its own struggles in the last couple of years with cost cutting and the like.
But does Walmart have an advantage because it does have stores and I think about some store or that I shot at that. I love that I can order online pick up.
In a store.
Do like I have a lot of flexibility.
I don't like to hang out in a store. It's not as much fun to hang out online.
But I do wonder is there that an advantage potentially, especially as it builds.
It should be. It should be. And as you know, as we see labor costs up over the last couple of years, supply chain costs, logistics cost up, you know, returning items, like returning e commerce items. It should not like it. The math doesn't work to do it free by shipment, and so Amazon has failed up to date with a real physical presence. And I think they'll keep at it because it is an advantage for Walmart, even if it's just to give customers, yes, place to pick up,
but a place to return. Right. I ordered trying to get ready for this week and my book launch, ordered like forty seven different white shirts online, and like, you know, knowing I could just ship them back or in some cases return to a store, but not an Amazon store.
It's interesting in terms of the fact that no one's written a book about Amazon Walmart, and no one's really done.
Matt Brad written two books.
Well, no, Amazon, that's about Amazon. I'm talking about Walmart.
Yeah.
Are they secretive or they are? You know, is it hard to get in there? They wouldn't, yeh, hang out with the CEO for a week. I get that because that's annoying.
But yeah, and they've they've.
They're very secretive.
They are secretive, I think Listen, I think they participated in some way for a couple of reasons. I think I showed them over the years I was going to publish stuff that they didn't think would get out of the company that did, and so I would continue to And I think they wanted to tell try to tell the story that they are finally turning a corner and that they you know, they get how far they were behind,
and but that they can lead in some ways. I think also, you know, for a lot of years when they were they've seen you know, Amazon has been in the spotlight for a lot of bad reasons in the press and in DC for the last couple of years. So they have some opportunity here to tell a different story as well and sort of stand apart from Amazon.
I'm thinking of our audience just got about unfortunately, Jason about thirty seconds left here. We talked about healthcare healthcare earlier. Should our investment world and audience be watching these two in terms of what they might do to healthcare?
Absolutely? I think ten years from now we may I don't know if we're being these jobs, but if we were, and we were back here, I think we may look back and say the biggest impact these companies have had in the last ten years on everyday people have is in healthcare, whether that's physical clinics like Walmart clinics one Medical clinics which now Amazon owns, or virtual care, or
maybe upending the insurance industry in some way. You know, the biggest challenge to Walmart in the healthcare is they've just churned through leaders yea, and they say there's a commitment, but we need to see that, you know, that sort of come through in steady leadership.
This was fun.
Good luck with the book, thanks so much.
Good luck with the white shirt.
I mean I have many, I have many at home waiting to go back. Jason del Ray.
The book is Winter sells All Amazon, Walmart and the Battle for Our Wallet's