David Rosenthal: prediction

Transcript context

…I started preparing for this episode trying to understand, how is the digital experience of Walmart these days versus Amazon's experience? Obviously, I'm well versed and Amazon packages arriving in my house every day. I started buying some stuff on Walmart. I bought some garden lamps because I needed to install some lights. I will say the consumer perspective so far for me has been pretty identical to Amazon. I don't think the selection is as large, but I'm not convinced that I take advantage of Amazon's sort of infinite selection. I think I look for Amazon's choice, or the wire cutter pick, or if that's something that has five stars in over 1000 reviews and just buy that thing. That methodology is very available on Walmart. I was trying to dig in and study from a technology perspective what are examples of things that Amazon is more advanced on. Actually, this was a great use of [...]. Good friends of the show over there. I read a transcript from a call with a former Amazon director. It's an interesting quote. It's just a little microcosm. It says, "I can tell you at Walmart, it is almost exclusively just the title and the product description used for search. As far as I can tell, there's no metadata that's put into their search algorithm today. Amazon absolutely has the additional metadata that they've built into their algorithms. It's a constantly changing and ongoing process. They're very sophisticated in what they do for search. There's tons of stuff hitting keywords, user-generated content. All that seller input is totally baked into the search algorithm." That sort of makes sense that on Walmart, it would be sort of like a focus on a crude implementation first and make sure it works well enough. But they also just have less historical data than Amazon does on all the shopper behavior and all that stuff to incorporate into the functionality of the website. I suspect we will talk a lot more about this dynamic throughout the season. Amazon is both a first-party seller and a marketplace. Because of that marketplace dynamic, there are just exponentially more SKUs on Amazon than on walmart.com. Amazon had to do this. Walmart does have third-party sellers online. They do actually lease space in stores to vendors. That's another part of the modern Walmart business model. You can just basically lease square footage, stock it, you have your own people who work there on your own payroll, and they're the ones who put all that merchandise in there. Of course, they can check out conveniently at the Walmart checkout, but the revenue goes to you and you just pay Walmart for that space.…

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