Amazon vs. Walmart: Who Will Capture Consumer Engagement in the Next Digital Decade?

According to Mary Meeker’s latest internet trends report, unveiled earlier this month, global internet growth is slowing. (This is true even in China –India is the great exception.) This spells trouble for everyone from device manufacturers (smartphone growth is already nearing saturation) to app publishers (which already struggle with user acquisition and retention).

“Easy growth is behind us,” declared one of Meeker’s less optimistic slides, and her numbers are not encouraging – everything to internet connectivity to GDP growth is on the decline. So, what does this mean for the rest of us?

First of all, both internet darlings as well as legacy businesses (even ones that embraced the shift from brick-and-mortar operations), are facing two new challenges:  1) gaining users and 2) consumer engagement. And consumers do not really care (subscription required). In fact, they expect businesses to keep up with the ways they conduct their business and personal lives online and offline. Consumers don’t want to wait.

According to our App Report, published in February 2016, more than 10 billion hours are spent per month on just mobile apps in the U.S., from shopping, to streaming, to social media. Who are these users, and do we really understand what drives their usage day after day? Accurate and actionable data on user adoption, loyalty, and consumer engagement levels has become a business imperative.

Amazon versus Walmart

Let’s look at e-commerce. As Mary Meeker noted, e-commerce continues to impact revenue growth for traditional retailers, and this space has seen an exceptional amount of change over the past decade. Amazon’s market cap and revenue has now surged far ahead of its brick-and-mortar competitor, Walmart. Our own data reveals this is indeed an upward trend.

But we need to remember that incumbents can also innovate and put themselves back in the running. And many of them have lots of cash, existing infrastructure, brand capital, and other values that they can leverage in the battle.

First, let’s take a look at Amazon, which we recently blogged about; this company is the top e-commerce platform in the U.S., and also holds a reigning position in m-commerce (mobile commerce). Naturally, it will be interesting to follow how Amazon Music and Amazon Video will grow and compete for consumer engagement with companies like Spotify and Netflix.

Amazon by the Numbers

  • Amazon’s net reach (of the online universe) is 86% (213.8 million monthly users), with a stickiness rating of 34%*(the Verto Stickiness rating reflects the average stickiness with the property, and is calculated as the share of the monthly users who also use the particular property daily).
  • Amazon’s mobile reach (among mobile users) is 85% (150.5 million users).
  • 2.7% of all digital time spent is on one of Amazon’s apps or websites in the U.S., including Amazon’s flagship shopping app, which has a mobile reach of 39% (69.5 million mobile users) followed by the Kindle at 20% (34.9 million mobile users), Prime Music 10% (17.1 million mobile users), and Appstore at 8% (13.7 million mobile users).

Next, let’s consider Walmart. According to some of our recent data, Walmart is actually doing very well in the new digital e-commerce world today, and it is not far away from Amazon in terms of digital presence.

Walmart by the Numbers

  • 162.6 million users have accessed Walmart’s services at least once during March 2016 in the U.S., giving Walmart a 65.6% net reach in the U.S.
  • On average, 27.4 million users have accessed Walmart’s services on a daily basis in March 2016, yielding a 16.9% stickiness rating*.
  • An average Walmart user spends less than an hour per month on Walmart’s services, with an average session duration of 3.5 minutes.
  • Among primary online devices, 107.9 million users have accessed Walmart’s services on a PC, 72.5 million on a smartphone, and 25.1 million on a tablet. Walmart’s digital user base consists of 25% Millennials, 25% Gen X, 34% Baby Boomers, and 15% Silents.

Walmart is naturally best known for its brick-and-mortar stores, although the retail giant has suffered a recent bout of branch closures (more than 150 locations in the U.S. alone). What’s interesting to note, however, is its reach across PCs, smartphones and tablets –with 163 million monthly, active users, Walmart trails only slightly after #2 contender eBay (164M) in monthly, active, unique cross-device users. Walmart’s mobile audience has been growing steadily, to 73 million monthly smartphone and 25 million tablet users.

Walmart is certainly the most notable legacy player that has been able to quickly build an online user base. People check offers on Walmart sites, use their apps to make the shopping experience more comfortable, and, in many ways, pose a challenge to both incumbent e-commerce giants like eBay and Amazon, as well as new-generation mobile shopping apps like Shopkick.

The billion-dollar question is whether Amazon will destroy and take money from incumbent retailers, or whether incumbent retailers will up their game against their online-only competitors over the next couple of years? And in this mix, let’s not forget the mobile native players, which are mixing their own competitive interests  into the ongoing battle.

The generation of mobile-native or mobile-only publishers, like Shopkick, have the potential to reinvent the way people shop. Airbnb has already changed the way people book accommodations, and Uber and Lyft have forever shifted our transportation options. These app-centric, m-commerce players are playing a key a role in consumers’ lives.

But even this new generation of mobile-native publishers, which are mobile-first or mobile-only, are facing engagement and retention challenges alongside their incumbent competitors, which often have websites with strong desktop audiences, not to mention brick-and-mortar operations.

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