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Target, Costco, Walmart and Amazon: Dealing with a Tough Retail Landscape

It’s no secret that the competitive landscape for retailers is a tough one. As e-commerce has emerged as a war zone of retail competition in recent years, the struggle has been real. And online retail leaders like Amazon have made it increasingly difficult demanding many companies to change. Understanding this, it is worth noting that this retail competition has driven prominent retailers to adopt new programs and strategies. Thus, exploring how the four top retailers plan on handling this retail landscape moving forward is certainly worthwhile and likewise intriguing.

With this in mind, Target, Costco, Walmart, and Amazon have each invested significant monies and efforts toward change. The fierce retail competition present has required these companies to explore new ways of reaching consumers. Though all 4 companies are pursuing major changes, different approaches have been considered. Naturally, the strategy embraced reflects its current state in the marketplace. But likewise, strategy decisions also pertain to how each interprets their retail challenges ahead. The following offers a snapshot of how each is handling the pressure of the current grocery store wars.

Target – Realizing Past Investments Today

Over the past several years, Target has been making sizable investments into some dynamic changes. Seeing a need to increase e-commerce sales, the company has developed several new strategies. These include new offerings like same-day delivery through Script as well as in-store online order pickups. Likewise, Target now offers Drive-Up, where employees load customer orders into their cars. These new offerings in addition to same-day order fulfillment have led to an 80 percent economic growth for Target. And Target plans to address ongoing retail competition by opening smaller format stores near colleges and underserved neighborhoods. Ultimately, Target hopes this will allow them to overcome many of the retail challenges being faced today.

“Members trust that they are going to get a good deal on whatever they buy [at Costco]. I think the fact that it has been doing that for decades has enabled it to withstand the online onslaught.” – Timothy Campbell, Director at Kantar Consulting

Costco – An Enviable Retail Competition Model

While many companies facing retail competition struggled, Costco has enjoyed a membership model that seems ideal. Despite having a lower gross margin on sales, Costco makes up the difference in membership fees. This not only makes for more predictable revenues, but it also creates customer loyalty. In fact, Costco enjoys a 90 percent membership renewal rate. This combined with the company’s bulk product sales pricing has enabled it to withstand Amazon’s market dominance as of late. At the same time, Costco has also adopted same-day and 2-day delivery options for its customers. It’s not surprising these strategies have placed Costco in a very attractive position. In part, this explains why its stock has increased by nearly 95 percent in the last year.

“Walmart remains in a good place. Although Walmart’s growth rate softened in the final quarter [of 2019], the results are nonetheless respectable.” – Neil Saunders, Managing Director of GlobalData Retail

Walmart – Innovations to Take on Amazon

As the largest brick-and-mortar retailer in the world, Walmart is well accustomed to weathering retail competition. For many years, Walmart has faced challenges from Target in this category. But today, both have settled into their own niche. While Target is excelling in apparel, Walmart dominates in home goods. But both companies must now manage the retail challenges that Amazon poses. For Walmart, this has meant major investments in innovative e-commerce pursuits, which will likely be realized in the near future. And this year, Walmart is expected to launch its Walmart +, a $98/year membership plan similar to Amazon Prime. In addition to unlimited same-day deliveries for groceries, this will also allow members discounts on gas and pharmacy prescriptions. As is evident, Costco and Amazon are not the only retailers seeing the advantages of a membership model.

“Amazon’s primary mission is to get you to say ‘Amazon’ every day of your life. … [It] is the only one who can afford to make the entire grocery category as a loss leader.” – Brendan Witcher, a Principal Retail Analyst with Forrester Research

Amazon – The Pervasive Retail Behemoth

Amazon started its Prime membership program in 2005. Today, it now boasts more than 150 million members and controls 40 percent of the online e-commerce retail sales. However, despite these advantages and its influence on the retail industry, Amazon also faces retail challenges. With Target and Walmart enhancing their digital and delivery offerings, Amazon likely feels some pressure. As a result, Amazon is opening cashier-less, full-size grocery stores call Go Grocery. Though margins in this retail sector are lower, Amazon can tolerate low profits with difficulty. Earning larger revenues from its cloud services, Amazon is able to compete with other retailers on price and services both. And this is a major reason Amazon continues to be king.

“The best retailers have innovated so that the physical store has the upper hand again. I think the next decade is tough for Amazon, they are on their heels.” – Ron Johnson, former CEO of Apple Store chief and former CEO of J.C. Penney

A Decade of Intense Retail Competition Ahead

There is little doubt that the coming decade will see many retail challenges for the retail industry. Consumers are becoming increasingly accustomed to rapid delivery and the conveniences of e-commerce online. Thus, innovations that further enhance these customer benefits will likely offer retailers huge advantages. But at the same time, conveniences that enhance in-store experiences also appeal to retail consumers. This is why all major companies facing retail competition are investing in these areas. And of course, the predictability and loyalty incentives of membership models look to be attractive as well. These are the strategies that all major companies are considering in dealing with retail competition. And each has its own version of how to adopt these strategies to deal with the retail challenges ahead. Presently, it’s hard to predict which major retailer will come out on top. But the approaches each is pursuing all appear to have the notable potential for continued success.

Apps for Dogs and Other Furry Friends – The Rise of PetTech

Estimates for the pet retail market has been suggested to be over $75 million. Naturally, pet ownership has been common for centuries. However, some aspects of the pet landscape are recently changing significantly. Just as we have embraced digital platforms and mobile apps, pet-centric technology–“PetTech”–is now a hot item as well. In fact, dozens of new apps for dogs and other pets now exist that pet owners may consider. But knowing which one is best and offers the services needed can be challenging.

Every year, new startup companies are entering the market selling new apps for dogs. In 2017, venture capital funding for dog technology approached nearly $300 million. In 2018, this figure exceeded $500 million. Understanding this, it is apparent that apps for dogs and other pets have the potential to be in high demand by pet owners. By dividing this industry into various sectors, it becomes easier to identify which apps for dogs might be most attractive. And it is also easier to appreciate how these dog technology services might make one’s life much easier.

“People were using connectivity to add value to a bunch of different products, and pet tech is definitely one of those. People like to see what their pets are doing in the house while they’re away.” – Rick Kowalski, Senior Manager of Industry and Business Intelligence for the Consumer Technology Association

PetTech that Tracks and Trains

Several apps for dogs now exist that involve tracking pets in various fashions. With the advent of GPS technologies, the opportunity to locate your pet has become routine. For example, the Tagg app (as part of the Tagg Tracker system) notifies you if your pet is outside a safe zone. The Whistle app does the same thing up to 3,000 feet from your home. And naturally, this also may come in useful should one’s pet be stolen. With the use of wearable technologies, this dog technology has become rather commonplace.

Other apps for dogs take tracking into a completely new realm. For example, the Spending on My Dog app allows one to track expenses on your pet. In fact, one can even import this into other digital accounting systems. Similarly, PetMinder app lets a pet owner schedule reminders and appointments. But the most novel among the apps for dogs is the Go Dogo system, which is an interactive, intelligent system for dogs while at home. Developed by engineers at Copenhagen, dogs train through audio-video technologies and an auto-treat dispenser unit. Thus, even while a pet owner is away, their dog can be both engaged and mentally stimulated.

“Millennials don’t want to be given thousands of choices for pet food, or beds, or dog groomers. They want to be steered to the best choices by someone they trust.” – Marc Atiyeh, CEO and Cofounder of Pawp

PetTech that Provides Supplies and Services

While tracking and training are popular apps for dogs, so are those facilitating supplies and service. E-commerce apps that make shopping for pet supplies easier are definitely on the rise. One of the biggest apps for dogs is Chewy, which offers same-day shipping on pet food, toys, treats and supplies. Also, Bullymake Box creates “tough toys” for those pets who love to chew. Their app guarantees any of their toys will last a minimum of 14 days. And New York-based startup Pawp is looking to provide all sorts of pet supplies through its app. It in actuality hopes to be one-stop shopping for supplies and services by using a more targeted approach.

These are just some of the major players in terms of new Pet Tech. But others that provide more selective services also exist. For example, many pet owners use Rover, which provides bios and photos of vetted and reviewed pet caretakers. Bring Fido allows pet owners to locate pet-friendly hotels, restaurants and events when traveling. And PetSnap provides 32 different sounds to help you take that perfect picture of your pet. These apps for dogs and many others are honing in on selective facets of pet care needs. And as a result, many pet owners are finding such dog technology assistance is quite valued.

“We may have thousands of SKUs but for each customer, we’re still offering the exact selection that they want when they want it, and we deliver it reliably, predictably, in a high-quality manner.” – Sumit Singh, CEO of Chewy

Pet Tech for Better Pet Health

Like human wellness, pet health is naturally important to pet owners. As a result, many apps for dogs and other pets facilitate health record-keeping and activities. For example, Pet Phone allows one the ability to manage all important pet information in one easy-to-find location. It also helps keep track of vet appointments, medications, and other vital health data for pets. PupTox, on the other hand, helps pet owners identify potential toxins for their pets in flowers, plants, and foods. And Pet First Aid is a diagnostic and resource tool that pet owners can use to identify symptom seriousness and care.

In addition to these apps for dogs, other dog technology helps pets stay healthy and active. Whistle, which was already noted for its GPS tracking system, includes a pet pedometer. Likewise, Petometer is an exercise and activity tracker that encourages pet owners to maintain pets on a regular activity schedule. And The Pet Pal provides a comprehensive health app for pets. It not only records important pet medical and health data but also collects insurance, vet, and sitter information for data-sharing. This appears to be a growing area of apps for dogs and pets currently.

Growing Consumer Trends for Dog Technology

With the number of startups entering this particular sector, it is clear that consumer demand for dog technology is increasing. A major reason for this is the number of Millennials who are choosing to have pets. In fact, this is the fastest-growing segment of pet owners in the country. And with their technological savvy, it’s not surprising they are flocking to apps for dogs. Without question, the apps available definitely make pet ownership more convenient and more comprehensive. This is why it is likely that businesses in this field will continue to excel in the years to come.