Monday, May 11, 2015

E-COMMERCE, AMAZON, WAL-MART

Today’s Top Supply Chain and Logistics News From WSJ

Delivering up-to-the-minute news, analysis, interviews and explanatory journalism on logistics, supply-chain management, e-commerce and more


Americans stepped up their borrowing in March, as the WSJ’s Eric Morath reports, but the question remains whether the consumers who make figure so prominently in the global economy will start buying in big numbers after taking a break from stores in the first quarter. For planners of retail supply chains, a major part of the question is whether those consumers will come back to the stores or get back to buying by going online. Online commerce is far outpacing storefront sales around the world, creating competition for traditional retailers. It’s created new markets, of course, but as Kim Nash describes in the WSJ Logistics Report, it’s also triggering a supply chain upheaval at brick-and-mortar stores. Wal-Mart Inc.,WMT-0.55% Home Depot Inc.HD-0.51% and others are trying to figure out how to serve that online market even as their own online sales are growing.
This may be the most important supply chain question retailers face today: moving truckloads of goods on pallets to stores is far different from putting together countless small shipments and parceling them out to buyers in a day or two, and the brick-and-mortar companies have to figure out how to make the logistics work without cutting into profitability. WSJ Logistics Report’s Robbie Whelan writes Wal-Mart is even testing the use of pickup centers, such as all stores, to see if customers can solve the logistics question themselves. The stakes in the e-commerce question for retailers are stark: China’s Alibaba reported a 45% increase in revenue in the first quarter, the WSJ’s Gillian Wong reports from Beijing, reaching $2.8 billion. The company is still a fraction the size of Amazon.com,AMZN-0.19% but Alibaba’s $25 billion IPO suggests investors believe they know which way market is going.
Among U.S. retailers, Wal-mart was No. 1 in 2007 with $378 billion in sales divided, more or less, among 7,262 stores, according to the National Retail Federation. Amazon was way back in 25th place with $14.8 billion in sales among, well, no stores. Fast-forward to 2013, the last full year for which the NRF has full numbers available, and Wal-Mart was up to $474 billion in worldwide sales with 4,779 stores. Amazon’s global revenue soared to $77.6 billion, pushed the company to No. 9 on the list while adding no stores. It’s not as if Amazon lacks space. The company has about 145 distribution centers around the world and is known as a delivery behemoth. Get this, however: Wal-Mart’s online sales actually grew faster than Amazon’s sales last year, 30% for the big, lumbering store operator and 20% for nimble Amazon. Wal-Mart still only had $12 billion in e-commerce sales, but it gives the logistics planners something to work with