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Walmart and Amazon Compete for E-Commerce Market Share

Don Apgar by Don Apgar
June 6, 2022
in Analysts Coverage, E-commerce
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Walmart and Amazon Compete for E-Commerce Market Share

Walmart and Amazon Compete for E-Commerce Market Share

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The battle for e-commerce market share continues to heat up, even as consumers return to shopping in stores in the wake of the fading pandemic. As e-commerce market leader Amazon has seen its sales begin to level off, rival Walmart is doubling down on their efforts to grow market share by leveraging their 4,700+ store locations. Over 90% of Americans live within 10 miles of a Walmart store, and the retailer is also the largest grocery chain in the US measured by sales dollars. Today, Walmart captures 25% of sales fulfilled as Buy Online, Pick-up In-Store (BOPIS), also known as “click and collect”. 

“The store is becoming a shoppable fulfillment center,” Tom Ward, chief e-commerce officer for Walmart U.S., said in his first interview since stepping into the role. “And if the store acts like the fulfillment center, we can send those items the shortest distance in the fastest time.” 

Walmart recently rolled out Walmart+, a membership program that provides free shipping on online orders and free home grocery delivery on orders over $35, much like the Prime program offered by Amazon. 

Amazon is not standing still, moving into physical retail with its recent acquisition of Whole Foods, the AmazonGo! convenience store pilot, and the licensing of its Just Walk Out cashierless platform to Hudson Corp. What’s becoming clear is that the battle for shoppers won’t be won in an online vs. store battle; consumers want an integrated omnichannel shopping solution that marries broad online marketplace selection with the ease and convenience of actual store locations. Digitally native retail brands like Warby Parker, Allbirds, and others helped coin the perspective that “customer acquisition cost (CAC) is the new rent,” are now themselves opening retail locations, prompting analysts to spin the phrase into “rent is the new CAC.”

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

Tags: AmazonBOPIScashierlesscustomer acquisitione-commerceEcommercemarket sharesWalmartWalmart+
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