One might assume that brisk and mortar retailers like Wal-Mart Stores Inc (NYSE:WMT) would face risk in driving traffic and sales when compared to e-commerce giants like Amazon.com, Inc (NASDAQ:AMZN). Wal-Mart Stores Inc (NYSE:WMT) has been taking significant step in ramping up its e-commerce operations resulting in a rise of 63% in its online sales. Amazon.com, Inc (NASDAQ:AMZN) recent move to lower its shipping charge was direct result of Walmart offering free shipping for order above $35.
Wal-Mart Stores Inc (NYSE:WMT) aims to spend as much as $250 billion in buying locally U.S. manufactured goods and products by 2023. Currently Walmart source 2/3 of its products and goods from within U.S. Walmart has also stepped up its efforts to partner with third-party merchants directly affecting Amazons merchant network. Though Amazon.com, Inc (NASDAQ:AMZN) recent acquire of Whole Food directly impacted Walmart, whose stock price tanked on the news, however the impact was short leaved. Compared to Whole Foods 400 grocery stores across the United States, Wal-Mart Stores Inc (NYSE:WMT) has more than 5000 U.S. stores.
Though Amazon.com, Inc (NASDAQ:AMZN) does not have the huge burden of maintaining physical store presence, it come with huge shipping and advertisement costs. In 2016 Amazon spent nearly $7.2 billion on shipping and another $7.2 billion on advertising and marketing. Amazon has ended up spending nearly 5.2% of its revenue on advertisement and marketing efforts compared to Wal-Mart which spent less than 1% of its revenue advertisements.
Wal-Mart Stores Inc (NYSE:WMT) has also improved its mobile app to allow customer to place order online and get it delivered and pick up at a store nearby and plans to roll out this to more than 1 million items.