Walmart (WMT) is demonstrating again how it plans to leverage its locations in the battle against online giant Amazon (AMZN) . The world's biggest retailer is proving again that bricks-and-mortar has its advantages.
For Walmart customers who wish to return a product, that in-store experience is about to be dramatically shortened, via a new program called Express Mobile Returns. Customers will begin the return process on Walmart's app, obtain a bar code, then bring the item to one of the retailer's 4,700 U.S. stores. In all, the return should take about 35 seconds.
In order to participate, customers will have to do two things that are very likely to benefit Walmart -- make an in-store appearance, which will result in additional sales, and download the company's app.
Meanwhile, Amazon is attempting to use Kohl's (KSS) locations to accept returns. Amazon recently announced that starting this month, 82 Kohl's locations near Chicago and Los Angeles will begin accepting returns on behalf of Amazon. Some Whole Foods Market (WFM) stores are accepting returns as well.
Amazon sales could see a tiny boost, as Kohl's stores in those cities also plan to carry some Amazon devices, such as the Echo. However, since it lacks physical locations, Amazon has put itself in the positon of driving traffic to Kohl's, a competitor.
Meanwhile, Walmart will be driving traffic to its mammoth, ubiquitous stores. According to a UPS survey, 70% of shoppers who return items to stores make additional purchases.
Technically, Walmart is in an uptrend (green line) and has performed well, gaining 17.4% year to date. The stock has spent the past three months consolidating its gains into a symmetrical triangle pattern (converging black lines).
Yesterday, this pattern resolved with a breakout on above-average volume. That breakout was accompanied by a buy signal from Walmart's MACD (moving average convergence divergence) indicator (shaded yellow). Both signals indicate that Walmart is about to continue its trend higher.
How can Amazon close the in-store product return advantage that Walmart is about to open? In the short run, it can't. Amazon has fewer than 500 Whole Foods Market locations, and traveling to one is simply not an option for many customers.
One solution would be to purchase a retail rival, such as Target (TGT) . A Target takeover would provide Amazon with more than 1,800 locations. Combined with the Whole Foods stores, this would give Amazon about 2,300 U.S. locations. That would provide a substantial physical presence to go with Amazon's online dominance.
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This commentary originally appeared on Real Money Pro. Click here to learn about this dynamic market information service for active traders.
