Leveling the Retail Playing Field with Smart Tech: Compete with Walmart and Amazon

When people think of retail, they first think of Amazon or Walmart, the world’s largest retailers.

That’s not by accident. Walmart and Amazon’s 2023 revenue was around $648 billion and $574 billion respectively. Their success isn’t solely due to smart marketing though. Their ability to provide industry-leading customer experiences that are convenient, flexible and predictable has made them a leader in the retail space.

What Makes Amazon and Walmart’s Customer Experience World Class?

In one sentence: their unmatched supply chain and logistics operations.

Take Amazon for example: it ships a mind-boggling 1.6 million packages every day. How? At the core of Amazon’s supply chain is a killer combo of high-tech hubs sprinkled right next to big cities, cutting-edge robotics, AI, and a dash of machine learning magic to ensure everything, from inventory management to delivery routing, is automated for optimal performance.

And then there’s their data game. Amazon plays it like a pro, using the latest in big data analytics to predict what will be bought and where, cutting down on any logistics lag to a high degree of accuracy.

This means there is neither the clutter that comes with overstocking, nor the panic of understocked shelves. Plus, they’re not just living in the now—futuristic tech like drones and autonomous vehicles are also in the mix, pushing boundaries to provide some of the fastest and convenient delivery timeframes.

Switching gears to Walmart, they’re all about blending old-school tactics with new-age tech. Their power lies in integrating their vast network of advanced distribution centers with their brick-and-mortar presence to create a deep network for their online store. Tech tools like routing, capacity, and returns management systems make the entire supply chain operations a walk in the park.

With both Amazon and Walmart’s eye on the last-mile prize, they’re dabbling in everything from partnerships with third-party logistics to self-driving and flying tech to move past complexities, scale to new locations and stay agile in meeting customer expectations and a lot more.

What Makes a Winning Logistics Fulfillment Stack?

Both these retail behemoths teach us that whether it’s leveraging the latest tech or rethinking customer delivery, the end game is the same: drive costs down, speed up service, and stay as many steps ahead of the competition as possible.

One might ask, every retailers’ leveraging routing and other solutions, so what’s the big difference? Well, these two have prioritized intelligence and automation across where it matters, namely

• Automated routing: Routing technology is now pivotal to all things fulfillment. That’s because static routing methods cannot match the fulfillment needs of today. Smart routing engines that have dynamic routing features built into the dispatch management platform that factors in 180+ real world constraints like traffic, roadblocks, address changes and many more to seamlessly chart economical and fast routes.
  
• Geocoding: With fast delivery comes the challenge of navigating around incorrect addresses. Countries like India, Indonesia, the UAE, and Saudi Arabia have delivery addresses that are inaccurate, incomplete, or not differentiated enough to be uniquely identifiable. With smart geocoders fuzzy customer addresses are converted to precise latitude and longitude coordinates for seamless delivery.
  
• Slot-based delivery: Customers not only want orders delivered fast, they want it to be delivered at the time of their choice. Meaning, retailers need to provide them better delivery windows to keep their loyalty intact. With a smart dispatch management platform, capacity and routing are improved to accommodate ad hoc deliveries, bypass on-ground challenges, efficiently utilize fleet and deliver on-time of customers’ preferred delivery window.
  
• Smart analytics: Amazon likely has a smart data analytics tool that provides actionable insights in the form of a dashboard to all stakeholders which contains more than insights for over 300+ operational metrics. This could include post delivery data, routing errors, CO2 emissions, cost per delivery, fuel consumption and much more.
  
• Strategically placed fulfillment centers: As real estate cliche goes, it’s all about the location. If a particular town or area has a lot of orders coming in, then setting up a fulfillment center closer that area can prompt for faster deliveries. Walmart went ahead and converted 4,000 retail stores into fulfillment centers for seamless delivery that does in-store fulfillment for online shoppers.
  
• Automated warehouse operations: Setting up a fulfillment center close to high density delivery locations isn’t enough for fast delivery. With thousands of packages to deliver, warehouse managers are burdened with manually sort based on pincode, vehicle type, type of order and many other parameters. With smart warehouse automation platforms, sorting, scanning, and loading are done via automation, cutting down idle time for drivers, decreasing burden for warehouse managers and speeding up delivery times.
  
• Returns: Every retail’s worst nightmare. According to the National Retail Federation (NRF) $761 billion worth of goods was returned in 2023. Eliminating returns completely is a pipe dream. However, mitigating cost of returns by implementing smart routing and capacity that factor in multiple parameters like real time on-ground data, shipment size (especially in case of big and bulky shipments), vehicle space, and many other can significantly bring down cost of returns.
  

What Amazon and Walmart are doing isn’t rocket science. From low prices to excellent service, they are just doubling down on fulfilling a customers’ fundamental needs a lot better. As customers want their orders delivered at a faster rate, with more options for convenience and flexibility, the strain on logistics is pushed to the breaking point.

One might think these giants have their own inhouse supply chain solution to navigate all challenges without the hassle of managing a third party platform. Amazon and Walmart definitely do have the dollars to build custom solutions. However, in an article, Senior Walmart executive mentioned they are currently working with Blue Yonder, a global leader in supply chain technology to cater to growing customer demands and that they’ve also solved the dilemma of build vs buy. Walmart is now a tech buyer.

In Amazon’s case they have their own AWS product line that has supply chain solutions so they are covered. Building an inhouse solution with hopes of cutting cost and keeping control will only lead to problems like outdated tech stacks, heavy IT resource usage and most of all, increased time to value. With Off the shelf solutions Blue Yonder or Locus, cost is minimal, support is completely the vendor’s responsibility and deployment time is 6-8 weeks and start seeing results in a couple of weeks.

Read Also: Build Vs Buy: The choice is simple