If this year’s Final Four tournament involved mass merchant retailers instead of college basketball teams, my bracket would look like this: Walmart, Kroger, Target and Amazon.
In the tournament for retail dominance, these four are battling it out in grocery, apparel, beauty and home, and in many ways with skills similar to those of promising basketball players. There’s speed, agility and dazzling plays to enthrall the crowd, but also team strategy and execution to score the most loyalty.
If Kroger, Walmart, Target and Amazon were to face off, this is how those games might just play out in four brand-defining categories.
Kroger Vs. Walmart
Here we’ve got the largest traditional grocery company, Kroger, with $121 billion in sales, against the largest overall retailer, Walmart, with $514 billion. Let’s break it down.
Online grocery delivery: Kroger offers curbside pickup, a self-checkout app and one-day delivery by cute robot cars. But Walmart edges it out on grocery delivery, according to research firm Gartner L2’s Grocery U.S. 2019 Digital IQ Index. It places Walmart in the rare “genius” category for features including websites and e-commerce, digital marketing and mobile. Walmart has, for example, separated grocery from the main offerings on its website and app and added hundreds of online order Pickup Towers. Walmart scored 140 on the Gartner L2 index, while Kroger scored 134.
Private label: Kroger has been manufacturing its own foods since soon after its founding in 1883, and today the portfolio represents 30.5% of all products sold. Walmart launched its first private label, Ol’ Roy dog food, in 1983 and has since taken a multi-pronged approach. It partners with Lord & Taylor, acquired Bonobos, Bare Necessities and other labels, launched the furnishings brand Modrn, and is now hinting at a private-label tablet. It’s a close score: Nearly equal percentages of Walmart and Kroger shoppers buy their respective private labels (84% and 83%), but Kroger’s brands are more home grown.
Stores: Walmart has 5,355 locations; Kroger has 2,764. Walmart’s portfolio includes Walmart Supercenters, discount stores, Neighborhood Markets, small format stores and Sam’s Clubs. Kroger operates supermarkets, multi-department stores, warehouse clubs and convenience stores under 30 banners. Kroger’s banner mix reflects its long history of acquiring retail chains and learning their best practices, from catering to high-end urban markets (Mariano’s) to selling in non-food categories (Fred Meyer). So while Walmart has more stores, Kroger’s store formats cover more ground.
Experiential services: In addition to prepared meals and other now-essential offerings, Kroger’s diversity — in formats and nameplates — enables it to test eateries, cocktail bars and live music. It operates its own Culinary Innovation Center and introduced a company-run restaurant, Kitchen 1883. Walmart is better known to house a McDonald’s or Subway, but recently announced plans to develop eight open-air retail centers, to be called Walmart Town Centers, that will include restaurants, food halls, recreational activities and, yes, Walmart Superstores. This game is still in play.
Amazon Vs. Target
It’s a bit of a lopsided match, but Target’s talent for partnering with designers for exclusive offerings should not be underestimated.
Online grocery delivery: In this category, Gartner L2’s index calls Amazon the clear winner, with a score of 144. Its acquisition of Whole Foods, combined with its Prime membership program, is likely the key to this ranking, having enabled Amazon to offer free grocery pickup at Whole Food stores as well as free (for Prime members) three-hour grocery delivery. Target is making a fast break for online domination, however, with its expanding Drive Up service that allocates delivery parking spots for shoppers so they never have to leave their cars. Gartner gave Target a score of 139 (even edging out Kroger).
Private label: Target long ago broke from the retail pack by forging exclusive relationships with hot designers, but since 2016 it launched 20 of its own brands in apparel, home decor, consumer products and electronics. Amazon uses purchase data from its website to develop competitive in-house brands, and to date offers nearly 135. However, research indicates only the brands with Amazon in the name resonate with shoppers: “Amazon’s private label efforts have been given too much credit,” Juozas Kaziukėnas, founder of Marketplace Pulse, wrote in a report released in March. “Outside the outliers like AmazonBasics batteries, most brands launched didn’t do well.”
Stores: Target operates more than 1,800 stores in the U.S. Amazon operates roughly 500, including its nearly 450 U.S. Whole Foods locations(but excluding Amazon pop-ups and kiosks). Other Amazon stores are Amazon Go, Amazon 4-Star and Amazon Books. Both retailers are testing new formats and concepts. Target is investing in smaller-format stores in urban areas and college campuses, or reformatting stores for easier online pickup. Amazon reportedly is planning to open dozens of grocery stores through acquisition in an effort to strengthen its supermarket brand. It’s a tight match.
Experiential services: Amazon Go redefined the in-store shopping experience by enabling customers to enter, select products and leave without so much as having to stop, let alone visit a cashier. Target’s offensive moves include delivering online orders to customer cars and ambitious remodels. It is updating nearly 1,000 locations and no two will be alike other than one distinct feature: An entryway designated for easy in-and-out trips, including grab-and-go groceries and online order pickup. The other entryway, designed for “inspiration,” will lead shoppers to boutique-like departments, such as beauty sections laid out like specialty stores. This game, as well, is still in play.
And The Winner Is …
Without a question, the winner in this or any retail playoff is the shopper. Kroger and Walmart, Amazon and Target, like the college teams in the real Final Four, will continue to compete and occasionally outplay each other in certain categories.
Where they rank will shift, but it will all be for the shopper’s benefit and, hopefully, loyalty.
Bryan Pearson a Featured Contributor to The Wise Marketer and is the President of LoyaltyOne, where he has been leveraging the knowledge of 120 million customer relationships over 20 years to create relevant communications and enhanced shopper experiences.
This article originally appeared in Forbes. Be sure to follow Bryan on Facebook and Twitter for more on retail, loyalty and the customer experience.