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Amazon has to 'figure out how to compete with Target and Walmart'

Sara Dramer
Associate Producer

Amazon’s (AMZN) push for one-day shipping may not be enough to compete with the big brick-and-mortar retailers.

“Target (TGT) and Walmart’s (WMT) online sales are growing three times Amazon’s in the U.S. Forty percent pick up at store, they’re getting it same day. Amazon can’t do that. So they’ve got to figure out how to compete with Target and Walmart.” Ron Johnson, Enjoy CEO and former CEO of JCPenney (JCP), told Yahoo Finance’s The Final Round.

An outside view of an Amazon logistics centre in Mannheim, Germany, September 17, 2019. REUTERS/Ralph Orlowski

Amazon has changed the retail landscape over the past 25 years, but now the industry it disrupted is beating the company at its own game, he said. Johnson said that the company’s lack of physical locations is putting it a disadvantage.

“Once the physical companies took advantage of online shopping, fast shipping, pick-up in store, great technology, their traffic in stores is growing and their online is growing. So Amazon is kind of left out not having a physical footprint, and so they’re trying to compete with this fast delivery which is going to be very expensive for them.”

As Walmart and Target maintain rapid e-commerce growth, it’s clear that the merging of online retailing with traditional retailing is becoming more important in the success of a company’s e-commerce business.

“Amazon disrupted for a while, that’s over now. Now the big stores have disrupted Amazon back” Johnson said.

Sara Dramer is an associate producer at Yahoo Finance. Follow her on Twitter @saradramer

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