The wisdom (or lack thereof) of the financial markets eludes me. The largest retailer in the world, generating almost $500B in revenue, reports flat sales and says its heavily investing in new technology and it must be punished! Maybe some of the financial pundits should ask themselves why companies fail to invest in the future? Maybe its because some like Amazon are rewarded while generating no appreciable profits while others get obliterated at the slightest hint of a performance hit.
Its been rather obvious for a while now that there are a few cracks in the Walmart armor but I would not underestimate what this venerable company can do. I have wondered for years why it let Amazon grow when long ago it could have squashed it but here we are. Too late to obliterate the competition but certainly much room to set itself up for the future with the right investment strategy. Retailers must become technology companies to compete in the digital future. Not smart to bet against Walmart. More than 90% of US retail sales continue to occur in store. When it comes to the future of retailing the right mix of ecommerce and physical presence will be far superior to a pure play ecommerce presence. Walmart will do it right, surely others will. The market needs to give room for those retailers that generate revenue and profits to invest in the future retail experience that blends the physical with the digital. As Amazon is faced with this pressure it too will look for more physical presence, and will continue to see rising costs that have plagued it all along.
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