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Why Apple Is Checking Out Wal-Mart

Stocks in this article: AAPL WMT SBUX MCD GOOG AMZN TGT ODP EBAY

That's all well and good if we are discussing Target (TGT) or Office Depot (ODP). However, when Amazon (AMZN) is brought into it the conversation changes. Amazon has been more successful at chipping away at Walmart in terms of cost from the standpoint of tax savings as well as improved shipping times.

Walmart will now be able to overcome this somewhat. First, it understands that paying $12 million per second in the checkout process needs to be improved. One of the ways it sought to do this was to add self-checkout lanes.

However, the savings would pale in comparison to fully changing the entire transaction process. With the help of Apple, it seems prepared to take it a step further. The only question is, where will it lead?

It seems plausible that customers will be able to complete the entire transaction with the iPhone using the credit card attached to the account in the same manner that consumers pay for apps, music games etc. In addition to Starbucks, companies including McDonald's (MCD), which has just partnered with eBay's (EBAY) PayPal unit, have also started looking at the advantages of mobile payments.

It seems these companies have no choice but to embrace the idea if they wish to stay competitive and minimize loss revenue due to excessively long lines.

What's more, I think eventually shoppers will be able to use their iPhones to shop and pay for items and then get them at the local store, taking away some of the advantage Amazon currently enjoys.

Regardless of how you feel about Walmart, the company deserves quite a bit of credit for considering this idea. As embattled as it has been over the years for a myriad of reasons, the company remains firm on moving forward and executing its mission.

This time it has looked upon Apple and technology to help it maintain its reputation for saving customers more money as well as now save them time.

Well, I suppose at a cost of $12 million per second, I would want customers out of the store as fast as possible, too.



At the time of publication, the author was long AAPL and held no position in any of the other stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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