Amazon vs. Walmart: A Year of Intense Rivalry and What’s Next in 2025
As 2024 wraps up, the rivalry between Amazon and Walmart has escalated, with both giants fiercely competing for consumer attention across various segments. From market share and digital advertising to loyalty programs and consumer spending, both companies are strategically positioning themselves for dominance. However, Walmart’s approach, while deliberate, offers significant potential for the future.
Market Share and Consumer Spending
In 2024, Amazon continued to expand its share of U.S. retail sales, capturing 10% of total retail sales and 4.4% of consumer spending. Walmart, however, remains a formidable contender, holding a strong position with 2.9% of consumer spending. Despite Amazon’s growth, I believe Walmart’s potential is much greater than its current size, and it’s only a matter of time before it taps into its full market opportunity.
However, Walmart understands that a massive surge in growth could bring about challenges it may not be prepared to handle. In this sense, Walmart’s approach has been more gradual, expanding at a pace it can manage while carefully observing Amazon and other rivals to refine its strategy.
Digital Advertising and Media Investments
In 2024, both Amazon and Walmart significantly increased their investments in digital advertising. Walmart’s Walmart Connect has been expanding to reach new, non-endemic brands and enhance in-store advertising capabilities, while Amazon has been aggressively pushing its advertising services, particularly by offering lower costs for Prime Video placements compared to platforms like Netflix.
Here’s where things get interesting: the Amazon advertising platform is often seen as the gold standard, but after numerous discussions with Walmart Advertising representatives, it’s clear that Walmart is playing a different game. Despite the popular belief that Amazon has the superior ad platform, Walmart is carving its own path, potentially offering even better solutions with more flexibility for advertisers. This further highlights Walmart’s strategy to stay ahead without trying to simply chase Amazon’s every move.
Loyalty Programs and Membership Growth
In the battle for consumer loyalty, Amazon Prime remains the dominant program, boasting a 67% penetration rate in the U.S. Walmart has seen notable growth with Walmart+, now capturing 30% of the market.
What’s fascinating is how Walmart has been gradually scaling its Walmart+ (W+) program, focusing on offering the benefits Amazon Prime members love, but doing so on its own terms. Walmart is not chasing after a quick, large-scale increase in members; it’s taking a more strategic approach, ensuring that its offering is sustainable and can be refined over time. This careful, calculated pace allows Walmart to learn from its rivals while ensuring that it maintains control over how quickly and effectively it expands.
Consumer Events and Spending
The success of Prime Day and Walmart+ Week further underlined the growing importance of membership-driven retail events. In 2024, Amazon saw a 11% sales growth on Prime Day, surpassing $14 billion in sales, while Walmart experienced a 71% growth in participation during Walmart+ Week, with Walmart+ members spending more than Amazon shoppers on average.
While Amazon continues to lead in overall sales during these events, Walmart’s growth trajectory is strong, and its more targeted approach to membership growth shows that it is not simply aiming to compete but instead is focusing on creating a loyalty program that works for its specific market.
Innovations in Retail and Logistics
In 2024, both companies invested heavily in retail innovations. Walmart introduced digital shelf labels and various improvements to the customer experience across its stores, while Amazon refined its Just Walk Out technology and continued expanding its delivery capabilities. Amazon has also been experimenting with 15-minute grocery deliveries in India, which directly competes with Walmart-backed Flipkart.
However, the gradual growth approach that Walmart is taking with its logistics and innovations may give it an edge in the long run. By focusing on improvements that are aligned with its current strengths, Walmart can offer a more sustainable and scalable model rather than rushing into every new tech trend.
What’s Next in 2025?
Looking ahead to 2025, the rivalry between Amazon and Walmart is expected to intensify. Walmart’s careful approach to e-commerce means it can expand its Walmart+ program quickly, especially given the increasing interest in grocery and omnichannel retail. The growth of Walmart Connect and its advertising strategy further suggests that Walmart will continue to challenge Amazon in new ways—potentially even surpassing Amazon’s ad offerings in the future.
Amazon will continue to lead in areas like fast delivery, general merchandise, and global reach, but Walmart’s strategy—gradually scaling while maintaining control over its growth—may prove to be a sustainable model that leaves it poised for long-term success.
Conclusion: Walmart’s Calculated Approach May Be Its Secret Weapon
While Amazon continues to push the boundaries in e-commerce, Walmart’s approach is centered on deliberate, gradual growth, focusing on sustainable strategies rather than quick wins. Walmart’s success lies not in trying to replicate Amazon’s strategy, but in doing things its own way, offering benefits that Amazon Prime members love, while avoiding the pitfalls of rapid expansion.
As the rivalry between the two continues to evolve, Walmart’s steady approach in areas like Walmart+, advertising, and supply chain innovation positions it as a formidable competitor to Amazon in 2025. It’s clear that Walmart’s true potential has yet to be fully realized, and it will be fascinating to watch as it continues to refine its path forward.
Latest Post
Leave a Reply
Want to join the discussion?Feel free to contribute!