The world at the feet of Amazon

The health crisis is giving the lace to a declining market model, that of physical sales. Walmart, an iconic company for two decades, succumbs day after day to the Amazon empire. In Spain, El Corte Ingles cannot fight against the internet giant and transforms its business model. Meanwhile, the bags fold to the new king, increasing its value day after day, making it worth $ 1.5 trillion, something unthinkable not long ago, especially since the company did not even exist.

ByBy Miguel ÁngelTemprano

July 16, 2020 Reading time. 3:05 min

Yesterday I had the opportunity to watch an interview on television with the current CEO of Walmart. If it were not because he must be a millionaire, I would say that I was sad. The Walmart CEO was, literally, a soul in pain. He was from his home in Arkansas telling us about the problems that the pandemic was causing his company.

For those who do not know it, Walmart would be like an Inditex, but disgraced. Like Inditex, because its origins are similar, for nothing else. Well saving the jokes, Walmart is the father of the concept of Mall, or shopping center, as we call it in these parts. It is difficult to move around the US, and not bump into one of them. In fact, El Corte Ingles is nothing more than a copy of the Walmart concept.

Perhaps a purist will tell me that I am wrong and that a Mall is somewhat broader, that includes more stores, and will be correct, but the concept of a large surface area is created by them. They create the concept of establishing a very large area, but outside the large urban centers. A place where everything is sold and surrounded in the same space as other satellite businesses, more or less large. In a phrase, it is the original concept of centralized mass consumption.

«Walmart is the father of the Mall model that floods the market and has been the center of expertise for mass face-to-face selling techniques.»

They have experimented and developed the techniques of mass sales, such as the smell in the store to stimulate sales or the volume of background music to encourage movement.

In them, the position on the product shelves has been studied and implemented as a sales incentive. And they have studied human physiological issues related to purchasing, such as the segregation of dopamine in response to the satisfaction produced by purchasing.

Walmart has been so important that it has occupied a prominent position in the Champions League of the world’s largest companies for more than two decades, being one of the five largest companies in the world by market capitalization. But one day someone came with the intention of selling books on the internet, but in a short time they discovered that they could sell not only books but EVERYTHING online and they took the cake.

Amazon has not only expelled Walmart from the market, and therefore and before it, many other smaller ones, but has managed to make the market decide in a tacit way that it will keep not only the cake but also the cake. would read whole.

«The world already discovers that Amazon will not be the king of the online market, but will control consumption.»

All Spaniards will remember the El Corte Ingles announcements. Intensive campaigns in advertising investment, which always used international

models. But no one will remember a single ad from Amazon’s online sales business, simply because they don’t exist, and they don’t exist because they don’t need them.

There is a Spanish saying that money calls money, and there should be another saying that luck calls luck, even if it is only valid for some, and in this case for Amazon.

Amazon’s business is divided between cloud services and online sales. Precisely the two businesses that have shown that the pandemic far from hurting them has been as if they were playing the lottery. All videoconference systems, so implemented these months ago, or teleworking through SaaS systems must be housed on trusted servers, which provide stability and reliability. And here the best are those of Amazon. And in this everyone agrees that it is here to stay.

«The health crisis has made the majority feel very bad, Amazon has not only not felt badly, but has made it bigger»

Against fewer trips, short to the office or long to other places that need to use a car, train or plane, either because of the health crisis or because teleworking has become more Internet consumption will be made and therefore there will be more need for servers. And here the winner is Amazon. Every time we ask that travel be shortened to improve the environment, we are doing the advertising work for Amazon.

And what about the online business? E-commerce was not an incipient business, it was an imperative modality of sale in any business that claimed to survive.

I remember not many years ago saying that if you wanted something the place where you should go to look for it was at El Corte Ingles. There the service was exquisite. They carried to the end the expression of the customer is always right. I went to El Corte Ingles at least once a week, because when I didn’t want to think about where to find something, I went there, because if I didn’t find what I was looking for, I found her first cousin. All that has become obsolete. And Amazon has made it obsolete.

Now I can find what I’m looking for, but exactly what I’m looking for, even if I don’t even know what it’s called. But not in El Corte Ingles but in Amazon.

Scarcely three years ago, I was at the El Corte Ingles cashier paying for some glasses, when an elderly woman asked the seller about a bag for a vacuum cleaner. This told him that he was sorry, that they no longer had that model because it was a little obsolete, but that, surely, he found it in Amazon, because everything was there. Regardless of how inaccurately, commercially speaking, of the attitude of the seller, he was right. Amazon has condemned El Corte Ingles to be a space rental, rather than a multiproduct sales center.

And going back to the beginning, no or almost no Walmart customer goes out in search of a product to any of the 11,000 stores distributed in 28 countries, connects to the Internet.

This is why the fight is no longer about having a large store or where it is close to the consumer. The fight is in a more difficult place. It is just a click away on the mobile.

But in the meantime, Walmart has to keep a huge workforce in thousands of stores with all kinds of problems. Amazon can use all of its resources to improve its online sales process.

«An explanation for its constant stock market revaluation must be found in that day after day without competitors they disappear, while she is stronger.»

I do not know how much it will directly help Amazon that the pandemic does not improve, but I can assure that each day that passes clarifies more the forest, because small and large trees fall, and it is here where we can find a reasonable explanation for why the stock goes up and up despite the fact that health data is getting worse every day, and also in the market that accounts for 68% of their business, the US Amazon is already worth five times more than Walmart, despite having symbolic assets compared to this.