Analysis: Click-And-Order Vs. Brick-And-Mortar Retail Strategies

Each week, Jefferies issues a report highlighting any key developments from digitally native retailers and any new trends in e-commerce. This week's note focuses on: 

  • Wal-Mart Stores Inc WMT's personal shopper service.
  •, Inc. AMZN's free shipping promotion.
  • Nike Inc NKE's focus on online sales.

The Analyst

Jefferies' Randal Konik.


Walmart started testing a new personal shopper service in New York City meant to attract "busy NYC moms" who boast high income. The service recommends products — initially health/beauty, household products and apparel/accessories — to the customer that can be ordered via text message based on machine learning technologies and personalized algorithms.

Walmart's new initiative is consistent with strategies retailers are using to capture a larger piece of the e-commerce market, Konik said. (See the analyst's track record here.) 

Companies such as Walmart are likely to continue leveraging their data around customers and seek out ways of improving consumer convenience, such as through alternative methods like shopping with texts, the analyst said. 


Amazon said in a holiday update that 4 million new people used a Prime trial or started a paid membership to take advantage of a free two-day, one-day or same-day shipping initiative. Amazon's willingness to hold free shipping trials emphasizes its two biggest advantages over traditional retailers, Konik said: creating a customer base that remains loyal and a focus on quick and free shipping options.

Traditional retailers are trying to catch up to Amazon by matching free (or cheaper) shipping options, according to Jefferies. A retailers' physical network could actually serve as a competitive advantage against Amazon, the analyst said. In fact, a buy-online, in-store pickup initiative could prove to be cheaper to fulfill versus Amazon's online-only model. And retailers are improving their own loyalty programs, which drives greater stickiness and shows they are willing to take on Amazon on these two fronts, the analyst said. 


Nike said during its fiscal second quarter conference call that it is seeking to expand its relationship with Amazon and also partner with the subscription box retailer Stitch Fix Inc SFIX.

Nike's online initiatives remain "relatively small" and do not pose a threat to companies like Foot Locker, Inc. FL, as Nike also committed to strengthening its relationship with the athletic shoe retailer, Konik said.

Nike's partnership with Stitch Fix isn't a surprise given the growing popularity of subscription box services, especially among the important millennial demographic group, the analyst said. 

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