This seems like moving the goalposts a bit. I didn’t make an argument anywhere close to that.
Your first comment strongly implies that there’s either a future in online stores or a future in physical ones, so it can’t both be correct for an online store to move to physical locations and a physical store to move online.
That’s a simplistic analysis that’s just wrong. There’s no obvious conclusion to be drawn from the fact that both stores are branching out into different distribution models.
It might be a good move or it might be a bad one, but it’s not obviously incorrect for one or both of them.
Your formula for success is pretty tautological: They’ve succeeded by being the biggest and the most successful.
Neither Walmart nor Amazon succeeded because they were dominant. They became dominant because they were the best. Both started out small and outcompeted the existing dominant companies.
Are you sure those are the only possibilities? Other companies have successfully moved into different lines of business and distribution models in the past and been successful. I bet it could happen in the future, too.
Hell, Amazon has entered and dominated new markets in recent memory. They were just a bookstore not long ago.
As was already said, but you ignored, there is no reason to assume that a company is making a mistake simply because it changes its business strategy. You might be interested in reading Andy Grove’s book on the subject.
I’m not saying these are universal truths. There are obviously businesses where multiple companies exist and compete side by side on an ongoing basis. Look at fast food: McDonalds may be number one but Burger King and Wendy’s aren’t going out of business.
But that’s not the case in online sales or department stores. I’m not talking theory, I’m observing the reality. The model in these businesses is that the top company gets bigger every year and every company that isn’t the top company gets smaller until they go out of business.
So if Amazon was opening a chain of fast food outlets, I’d say they have a decent chance of succeeding. But department stores? No, that’s a business they’re going to fail in.
I’m not sure I understand the distinction you’re making.
It’s true that in the (relatively short) history of the “selling stuff online” industry, Amazon has been the only victor. It has gotten bigger every year. But it got bigger before it was the biggest, and it continued getting bigger. So it’s definitely not true that the “top company” got bigger every year, unless you define “top company” retroactively as the company that got bigger. And the history of selling stuff online is awfully short to draw major conclusions. Do you think that in another 30 years, Amazon is still going to be the biggest online retailer? I mean, they might be, but I wouldn’t take that bet.
Certainly not true in department stores. There have been department stores for ~150 years, and not only have there been many successful companies in the space, the title of “biggest” has been held by Gimbels, Woolworths, Sears, Macy’s and Walmart (I think, depending on how you measure and which companies are in the same space).
Going back to your initial point, do you still think it’s not possible for both Amazon and Walmart to be making the correct move by diversifying their retail channels?
To be fair, Sears would be failing regardless. Their products are only fair, the customer service is for shit and checking out is a nightmare given their antiquated computer POS software.
Had someone competent been managing Sears starting perhaps twenty years ago, the failure might not have been inevitable. Their catalog could have given them a leg up in the Internet/e-commerce business and their brands (Craftsman, Kenmore, DieHard, etc) could have put them in a good position in B&M retail.
It’s possible that (one of many) future uses of the Whole Foods acquisition will be for them to function as ‘pickup points’ for your online Amazon purchases.
You order online from Amazon, and their truck delivers it to your local Whole Foods store overnight, so you can pick it up there the next day – free of any delivery charges. And while you’re there, you grab some milk & bread & other groceries.
So that gives Amazon a better chance for online sales of rush needs, as well as reductions in their delivery costs (one of their bigger expenses now), and also could give a boost to the sales at Whole Foods locations. Win-win for them.
Wal-mart’s push for more online sales might be aimed at much the same market – sell online, deliver via their existing physical store network.
Not just corporations. In 2006 three individuals bought thoroughbred The Green Monkey as a two-year old for $16,000,000, a record that still stands. At the time Cigar held the record for lifetime earnings, some $10,000,000. Now, a good stallion earns far more at stud than on the track, but first you have to prove he’s any good. Commentators at the time thought they were nucking futs. They were right; in three starts before he was retired he never broke his maiden and his stud fee as of 2016 is $5,000. That would be 2,000 mares covered to recoup just the auction price, never mind ongoing expenses.