The Amazon-Walmart Showdown That Explains the Modern Economy
By Neil Irwin
Jun 16 2017
With Amazon buying the high-end grocery chain Whole Foods, something retail analysts have known for years is now apparent to everyone: The online retailer is on a collision course with Walmart to try to be the predominant seller of pretty much everything you buy.
Each one is trying to become more like the other — Walmart by investing heavily in its technology, Amazon by opening physical bookstores and now buying physical supermarkets. But this is more than a battle between two business titans. Their rivalry sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages that accrue to the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.
That in turn has been a boon for consumers but also has more worrying implications for jobs, wages and inequality.
To understand this epic shift, you can look not just to the grocery business, but to my closet, and to another retail acquisition announced Friday morning.
Men’s dress clothing, mine included, can be a little boring. Like many male office workers, I lean toward clothes that are sharp but not at all showy. Nearly every weekday, I wear a dress shirt that is either light blue, white or has some subtle check pattern, usually paired with slacks and a blazer. The description alone could make a person doze.
I used to buy my dress shirts from a Hong Kong tailor. They fit perfectly, but ordering required an awkward meeting with a visiting salesman in a hotel suite. They took six weeks to arrive, and they cost around $120 each, which adds up fast when you need to buy eight or 10 a year to keep up with wear and tear.
Then several years ago I realized that a company called Bonobos was making shirts that fit me nearly as well, that were often sold three for $220, or $73 each, and that would arrive in two days.
Bonobos became my main shirt provider, at least until recently, when I learned that Amazon was trying to get into the upper-end men’s shirt game. The firm’s “Buttoned Down” line, offered to Amazon Prime customers, uses high-quality fabric and is a good value at $40 for basic shirts. I bought a few; they don’t fit me quite as well as the Bonobos, but I do prefer the stitching.
I’m on the fence as to which company will provide my next shirt order, and a new deal this week makes it a doubly interesting quandary: Walmart is buying Bonobos.