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Walmart Builds on Its Biggest Edge Over Amazon

Retailing giant Walmart wants to ensure its customers can get what they're looking for, however they want to buy it.

Walmart has deep roots in brick-and-mortar retailing, but Chief Executive Doug McMillion has long understood that the company needs to invest heavily in technology. 

That effort has not always been smooth sailing. The retail giant bought in 2016 for $3.3 billion largely to acquire its management team, led by Marc Lore, and its technology. That deal was either a giant failure or a huge success depending upon how you look at it. 

The retailer shut down after a few years, having done very little with the brand. Lore, however, ran Walmart's digital operations and forced the store (over the objections of many of its longtime leaders) to invest in its supply chain and online operations.

Lore, supported by McMillon, understood that Walmart had to directly take on Amazon's key advantage -- free two-day delivery. He pushed the chain to make the same offer (admittedly on a much smaller set of products) and forced Walmart to spend billions to keep up.

That turned the chain from a brick-and-mortar leader into a true omnichannel operation. Walmart can use its vast network of stores to support online orders, buy-online-pickup-in-store, or buy-online-return-in-store, as well as curbside pickup and grocery delivery.

Walmart may not have Amazon's (AMZN) pure digital-first DNA, but it has pushed its way into being a viable competitor online as well as in its stores. 

Now, the retail giant has made a purchase designed to support its continued supply chain and logistics battle with its key rival.

Walmart Digital Redesign Lead

Walmart Makes a Key Purchase 

The pandemic has made consumers acutely aware of supply-chain issues. Nobody really thought twice about a favored item occasionally being out of stock before stores started running out of toilet paper.

When that happened, followed by all sort of other pandemic-related shortages, what was available and what wasn't became part of the public discourse. That consumer approach continued even as the impact of the pandemic waned, pushing retailers, including Walmart and Amazon, to invest heavily in making sure their literal and virtual shelves had the items they needed.   

Now, to help make that happen, Walmart has purchased a company that will help its suppliers have a better picture of what's happening in stores. The company reported the news in a release.

"Walmart is acquiring Volt Systems, a technology company that provides suppliers with enhanced on-demand visibility into merchandising resources," Walmart said. 

"The application delivers current store-level data, actionable analytics, and shelf intelligence for suppliers to plan, forecast, and optimize product assortment."

The goal is to give customers "a more seamless omnishopping experience, with reduced friction due to out-of-stocks."

Walmart Has One Big Advantage Over Amazon

Walmart has smartly leaned into its biggest advantage over Amazon -- its network of stores. The chain can offer services like curbside pickup and enabling customers to look at an item -- like, say, a television or a piece of exercise equipment -- then have it shipped to their home. That's something its biggest rival cannot do.

Omnichannel shopping means customers can mix and match in-store and online as they see fit. Walmart has nearly 5,000 stores across the U.S. 

"For most people in the United States, a Walmart is literally just down the road. The median distance to a Walmart in the United States is 4.2 miles," according to Thomas J. Holmes, a professor of economics at the University of Minnesota and a research department consultant at the Federal Reserve Bank of Minneapolis.

That's a huge edge for Walmart that Amazon can't match. It's also a way for the company to compete on speed and convenience without having to spend the billions its digital rival has spent building out its delivery capacities.