The competitive war between Amazon and Walmart for attracting American consumers continues to intensify. The company led by Jeff Bezos has already completed the purchase of Whole Foods, a deal for which it paid $13.7 billion and whose first discounts have increased the traffic of this supermarket chain by 25%. On the other hand, Walmart responded with the acquisition of Bonobos, for $310 million. Now the question arises which will be the next target of both titans.
While Walmart is well aware of Amazon’s online advantage, so it has partnered with Google offering its products to users who buy on Google Express. In addition, Amazon invests in brands that are usually smaller and more exclusive than those of its competitors.
Foursquare released a number of possible targets based on demographics and traffic to certain retailers. Among them, Nordstrom stands out, the company with a market value of 7.53 billion dollars and that precisely seeks to disrupt its strategy with the launch of stores, where the retailer will not have apparel as their only products.
Instead, you will be offered consultations with your stylists, as well as manicure or hairdressing services as well as a coffee, juice or a glass of wine. After the consultation, the stylists will ask for the clothes. The new stores will have eight changing rooms. In addition it will also have tailoring services and other alterations in addition to online purchases on the same day of purchase.
Foursquare data show that owning a clothing chain like Nordstrom would deepen Amazon’s relationships with its user base. For its part, Walmart could get this retailer to access new customers, especially young people, much more accustomed to buying at Nordstrom and Nordstrom Rack than at Walmart.
Another possible takeover target is the Warby Parker optics. With a model similar to that of Bonobos, with 46 physical boutiques but with its operations mainly based online, this company has a customer base in which 55% are Millennials, a level that equates this brand to others like Lululemon or Williams Sonoma.
If purchased by Amazon, Warby Parker could improve its distribution and shipping costs. Amazon, in return, would have access to a clientele with an 80% chance of buying at Whole Foods and entering the Amazon ecosystem. In the case of Walmart, Warby Parker would give access to a good number of young consumers. The latest round of financing placed the company’s price at about $1.2 billion.
Also included are the DIY and home improvement company Lowe’s, whose market value is 65.3 billion dollars. Although this acquisition would be more difficult to finance, Lowe’s is one of the favorite stores by US consumers despite its competitor, Home Depot, has more traffic.
If Amazon lowered prices, as it has already done at Whole Foods, and sacrificed part of the margin, it could gain market share from Home Depot. Lowe’s would make less sense for Walmart, which has other options, such as Illinois-based Ulta Beauty, with nearly 1,000 locations offering low-, mid- and high-end cosmetics as well as hair care items.
