Being in the food industry circa 2017 means getting to watch two giants battling for global consumers’ wallets in a fight for their lives: Amazon and Walmart.
We can talk about the differences in the two companies’ strategies all day. We could compare their market cap (AMZN $483 billion vs WMT $256 billion), stock price ($1,006 vs $86), or number of employees (341,000 vs 1,400,000).
But none of it matters.
Sure its fascinating to see it all unfold, like a real time case study on business strategy. But should the meat industry care whether Amazon or Walmart wins?
Because the same technology trends will be amplified no matter who wins the faceoff between Amazon vs Walmart.
More specifically, because the same technology trends are sneaking into the entire food industry whether you’re a beef packer in Omaha, a QSR based in Chicago, a global distributor based in Houston, or a retailer based in Boise.
Google “Amazon vs Walmart” though and you’ll find a lot of noise about brick and mortar vs online.
True - in the last 18 months, Amazon spent $14 billion to acquire Whole Foods which expands their brick and mortar footprint.
Also true - in the last 18 months, Walmart spent $3 billion acquiring Jet.com to expand their digital footprint.
But the Amazon vs Walmart competition isn’t a battle of bricks and mortar vs digital - ultimately all consumer experiences will be digital to some degree.
The fusion of digital to live shopping, and/or the reverse, is driving consumer behavior and giving retailers (read: and their supply chains) more visibility into consumers than ever before. Increased visibility will soon drive competitor behavior….and supplier behavior.
For example, Amazon started using retail bookstores as a showroom for online inventory as shoppers use their phones to see prices. Could these hybrid experiences soon appear at a grocery store near you? Seems reasonable.
Regardless of each company’s current position, they’ll likely end up with similar capabilities as technology trends enable two distinct outcomes:
1) Ability to reduce cost via improved planning, aka better long term market visibility
2) Ability to optimize revenue via better price execution, aka shorter reaction time to changes in individual price elasticity
Regardless of whether Amazon or Walmart wins, meat companies will be operating in an environment with new customer capabilities, behaviors and expectations across the value chain.
This will drive other technology-enabled trends further into the meat industry, such as:
1) Highly integrated supply chains from packer to retailer - perhaps facilitated by retailer ownership of processing assets (i.e. the new Costco chicken plant model) but perhaps facilitated through shared data along the value chain.
2) Increasingly blurred lines between wholesale and retail.
3) Increased consumer expectations for high quality customer experience AND low price.
Whether Amazon or Walmart wins, meat companies along the value chain must prepare to operate differently. How prepared are you?
This article was originally published on Meatingplace.