Retail margins are razor thin, so the pennies of efficiency add up to a moat
Walmart and Target were far better than Amazon at logistics at the beginning, but they couldn’t execute (or didn’t focus on) software development as well as Amazon.
Meanwhile, Amazon figured out how to execute logistics just as good or better than the incumbents, giving them the edge to overtake them.
They were built for people to come to their store, and the website was a second class citizen for a long time.
But that was Amazon's bread and butter. They built that fast-shipping moat as a pretty established company, and the big retailers were caught off guard
Walmart is still the largest company in the world by revenue, with Amazon at its heels, with Amazon's profit beating out Walmart's.
A lot of this thread, I think, is just fantasy land that Amazon is somehow:
1. Destroying Walmart and Target in a way they can't compete.
2. Is more tech savvy than Walmart and Target.
C'mon, read the history of Walmart, it's who put technology into retail.
Walmart is not an Internet company. It is definitely a tech company. It's just that its tech is no longer super cool.
But for whatever reason, they took their foot off the pedal, and allowed Amazon to use the next step (networking technology and internet) to gain an edge over the now incumbent Walmart.
> 2. Is more tech savvy than Walmart and Target.
The market (via market cap) clearly thinks Amazon has lots more potential than its competitors, and I assume it is because investors think Amazon will be more successful using technology to advance.
