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Comment by lotsofpulp | Hacker News Reader

Walmart and Target have tons of warehouse expertise. Amazon’s moat is their software, where they have a far longer head start and they can afford to pay their employees due to AWS and other services’ high margins, as well as executing well on growth resulting in being able to compensate with equity.

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.

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Walmart and Target already had warehouses, but the end-to-end system you need for 2-day, 1-day, same day shipping, which includes warehouses/trucks/drivers, is not something they had

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 and Target can get truckloads of items to a relatively few stores. Amazon can get items to people’s houses

Right, which Amazon originally accomplished with huge assistance from expensive contracts with UPS, but they used software (and new hardware) and mobile internet technology to figure out how to reduce their delivery costs by being able to figure out how to incentivize cheaper independent contractors to deliver their packages, rather than expensive UPS union employees.

They also built warehouses closer to the customers and bought Kiva to automate their warehouses.

Walmart has been a tech company since the 80s. The way Walmart got so big is that the created a literal network between stores so they could do logistics at scale. They had the largest database at the time.

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.

Just to emphasize this point: Walmart was to the IT revolution what Amazon is to the Internet revolution. They were among the first in the sector to move beyond paper and industrialize IT for operations, which allowed them to scale way faster and way more efficiently than their competition. Walmart's most powerful executives were IT executives, and many of them went on to have very decorated careers, e.g., Kevin Turner was the CIO immediately prior to becoming COO at Microsoft.

Walmart is not an Internet company. It is definitely a tech company. It's just that its tech is no longer super cool.

Good point that Walmart got its edge against incumbents by incorporating advanced technology into their operations.

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.

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