The Battle for the Future of Tech
Checking your feedback from the weekend, a brief note catches our eye:
“You are a complete idiot.”
It’s possible. But what did we say to make you think this? Another…
“Your problem is you want to keep people from being able to take care of themselves.”
Again, not sure what we wrote to get this response, but what we want is the opposite of what you suggest, dear reader.
Looking for good news in the mailbox… nope.
“You have just lost me as a reader. Trump is the only one who is trying to save our independence. Socialism doesn’t work.”
We agree socialism doesn’t work. As to Trump being the “only one” trying to save our independence, surely you mean that to read as hyperbole.
Tough crowd over the weekend.
Today’s question: Which is a bigger worry for you – unexpected healthcare expenses or a drop in the stock market? If you had to pick one that keeps you awake, which one and why?
Your Rundown for Monday, May 20, 2019:
Amazon vs. Walmart – A Tech Battle to Watch
MarketWatch reports this morning that Walmart’s (NYSE: WMT) online sales grew 37% in the first quarter of this year.
The company also recently announced next-day delivery for most orders.
This is significant because it comes on the heels of Amazon’s (NASDAQ: AMZN) decision to give Prime members free one-day delivery.
We’ve covered this story several times over the years at The Rundown, and now the battle lines are drawn.
Amazon and Walmart will fight to the death over three things:
- Who you buy from online
- How fast (and cheaply) you can receive what you buy
- Who wins the grocery delivery game
Both Amazon and Walmart can do well if points 1 and 2 above end in virtual ties.
Both companies are great and getting better at e-commerce. Both companies can live with razor thin margins. Both companies also have rock solid logistics systems.
The winner of the decade ahead is who sends groceries to your door in a fast, cheap, efficient way.
Grocery delivery is a huge future tech trend. Don’t laugh.
Grocery delivery is whole-house integration – think “smart refrigerators.” It’s AI, it’s Internet of Things, it’s every tech buzzword you’ve seen thrown around over the last five years.
A device in your house, or your house itself “knowing” what you need and when you need it, then those products simply showing up at your door…
… is the future.
Those purchases, once you start them, are recurring. The company that captures your loyalty has a customer for the long term.
In this view, Amazon has the current advantage. But don’t sleep on Walmart.
Walmart stock over the last year:
What Walmart lacks in current customers receiving deliveries it more than makes up for in physical footprint. There’s a Walmart in every town off every highway in every state.
Sure, you can pick up Amazon packages at Whole Foods stores, but the average visitor who does so spends less than 5 minutes there.
But… Alexa. That device, the start of the in-home AI revolution, is already on mantles nationwide. Amazon has that fight won already.
Amazon over the last year:
The takeaway: Short term, both Amazon and Walmart are smart holds.
A year from now, one is likely to be leading the other in this race.
Five years from now, the other could be in the lead.
Ten years from now, the winner could be the biggest company on earth.
A one-year bet right now… Walmart stock has more upside.
A five year or ten year bet? It’s anyone’s guess. But it’s a battle worth watching. Because the future of commerce is at stake.
Taking a look at the markets today…
Market Rundown for Mon. May 20, 2019
S&P 500 futures are off 18.50 at 2,843.
Oil is up $0.21 at $62.97.
Gold is up $0.50 at $1,276.
Bitcoin is down $346 to $7,847 in fiat terms.
Have a great Monday.
For the Rundown,