How Wal-Mart Can Beat Amazon: Copy What Amazon Does Best

Ron Johnson, the former CEO of J C Penney Company Inc JCP and now CEO of Enjoy, a company that delivers premium tech products to buyers' homes, spoke with Recode's Kara Swisher during the latest "Recode Decode" podcast and offered his take on what Wal-Mart needs to do to beat Amazon.

Play The Same Game

Johnson suggested that Amazon's Prime membership program is so powerful because it "locks people in," especially as the company continues to add new services. Prime members are known to spend much more than regular customers; so, why doesn't Wal-Mart create its own equivalent to Prime?

Johnson continued that a "Wal-Mart Prime" loyalty program could entice consumers to shop online and offline. Some of the benefits it could offer include free food and discounts on purchases. The retail executive emphasized the fact that Amazon's philosophy needs to be duplicated by retailers and in Wal-Mart's case, its physical footprint and vast resources and cash gives it all of the tools to beat Amazon.

But Wal-Mart needs to focus on the right things and Wal-Mart most certainly isn't doing that. Specifically, Wal-Mart is focusing too much on its own internal business and not looking at its biggest and most dominant competitor.

"That's like the Warriors going to play Cleveland in the NBA finals and not caring about LeBron James, but saying, ‘Let's improve our zone defense,'" Johnson said. "At some point, you gotta say, ‘LeBron's the challenge! We gotta defend LeBron!'"

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