Amazon and Walmart are locked in an epic battle for the future of retail. As the former moves into the physical world with bookstores and its purchase of Whole Foods, the latter builds a sprawling omnichannel ecosystem. Essential Retail brings you five ways in which the old timer is taking the fight to the online behemoth.

1) One online shopping mall to rule them all

“Walmart is constantly evolving and innovating, but there’s this pesky business called Amazon,” said Ed Child, head of data science at Asda, speaking at a KX event in Leeds. “It's number one competitor is Amazon, it’s not interested in anyone else.”

And Walmart is right to be concerned because more than half of Americans begin their online shopping searches on Amazon.com. Walmart is tackling this by transforming Walmart.com into an online mall, gaining access to higher-end brands which have traditionally avoided the retailer due to its discounter reputation. It is, for instance, nearing an agreement to add Lord & Taylor, with further deals believed to be in the pipeline. By the end of the second quarter, Walmart had over 67 million items available for sale on Walmart.com, up from 15 million at the same time last year, following a rise in third party merchants. 

The retailer’s online sales increased 63% in the first quarter, and then 60% in the second. And it expects the good times to continue into next year. In a press release announcing its new $20 billion share buyback authorisation, it touched on its 2018 outlook, including a 40% increase in online sales. 

Walmart president and CEO, Doug McMillon, said: “We have good momentum in the business, we’re executing our strategy and moving with speed to win with the customer, who is more connected than ever and embracing tools that will save them both time and money. We’re combining the accessibility of our stores with eCommerce to provide new and exciting ways for customers to shop.”

Come back to Essential Retail later this week to read parts two, three, four and five:

2.) Walmart acquisitions

3.) Creating an ecosystem of value for customers

4.) Mobile payments

5.) Leveraging its store network