Abstract

Mid-2016, Jeff Bezos initiated a major shift from an all-online to an offline-online mix business model. Since its creation in 1994, Amazon has remained a pure player, offering online a variety of services and products. But the online segment is still only accounting for 10% of the retail industry. Staying online could make it difficult for Bezos to achieve its goal of winning the industry leadership over Wal-Mart. Moreover, the retail market is fast-changing and omnichannel business model fast adoption seems to become a necessary condition to survive in retail on long term. To answer these changes, Bezos decided to enter the offline grocery retailing industry in America in December by launching the first Amazon Go store in Seattle and enter the grocery manufacturing industry through Amazon Elements in June of the same year. These launches were followed in 2017 by a fierce competition with Wal-Mart and an intensification of new products and services launches targeting both the online and offline segments, ultimately announcing the acquisition of Whole Foods for US$13.4 billion – which would be Amazon’s largest acquisition by far. This new business model could be the key for Amazon future growth and to win the retail leadership battle against Wal-Mart. But it seems difficult for Amazon to acquire by itself the sufficient market and supply chain knowledge and network to compete with Wal-Mart and its decades of offline retail business experience. But it can play on its data analysis capacities to improve the offline customer experience. Could Amazon become the new Wal-Mart? This case introduces Amazon history and old business model, situation in 2017, competitive advantages, new offline offer, the offline retail market and Wal-Mart in 2017 and finally the intensifying competition between Amazon and Wal-Mart since 2017.

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