Walmart and Amazon are the two largest retailers in the world, with revenues of $559 billion and $386 billion respectively in 20231. They are also fierce competitors in the ecommerce space, offering millions of products, fast delivery, and various services to their customers. But how do they compare in terms of their history, size, customers, fulfillment, marketing, subscription, challenges, and growth? Let’s find out in this blog post.
History
Walmart is much older than Amazon, founded in 1962 by Sam Walton as a discount store. The company went public in 1970 and expanded rapidly across the US and internationally. Walmart launched its online store in 2000, five years after Amazon, and its third-party seller marketplace in 2009, ten years after Amazon. Walmart acquired Jet.com in 2016, which helped it improve its ecommerce capabilities and learnings. Walmart also started online grocery pickup in 2015, beating Amazon to the game.
Amazon was founded in 1994 by Jeff Bezos as an online bookstore. The company went public in 1997 and diversified into music, DVDs, and other products. Amazon launched its third-party seller marketplace in 1999, allowing millions of sellers to sell alongside Amazon on its platform. Amazon also introduced Amazon Web Services (AWS) in 2003, which provides cloud computing and other services to businesses. Amazon Prime, the subscription service that offers free shipping and other benefits, was launched in 2005. Since then, Amazon has ventured into many industries, such as mobile phones, robotics, media, groceries, healthcare, and more.
Size
Walmart is bigger than Amazon in terms of total revenue, physical stores, and employees. Walmart operates over 11,000 stores in 27 countries, employing over 2.2 million people. Walmart also has a larger product selection than Amazon, offering over 100 million products online3. Walmart’s online sales accounted for 12% of its total revenue in 2023, up from 8% in 20221.
Amazon is smaller than Walmart in terms of total revenue, but larger in terms of online revenue, market capitalization, and customers. Amazon operates over 600 physical stores, mostly under the Whole Foods and Amazon Go brands, employing over 1.3 million people4. Amazon offers over 350 million products online, including those sold by third-party sellers. Amazon’s online sales accounted for 86% of its total revenue in 2023, up from 83% in 20221. Amazon also has a higher market value than Walmart, reaching $1.7 trillion in 2024, compared to Walmart’s $416 billion6. Amazon has over 300 million active customers worldwide, while Walmart has over 265 million7 .
Customers
Walmart and Amazon have different customer profiles and preferences. Walmart’s customers tend to be older, lower-income, and more rural than Amazon’s customers. Walmart’s customers also value low prices and wide product selection more than convenience and fast delivery. Walmart’s customers are more likely to shop in-store or use online pickup options than delivery. Walmart’s customers are less loyal than Amazon’s customers, as they are more likely to shop around for the best deals.
Amazon’s customers tend to be younger, higher-income, and more urban than Walmart’s customers. Amazon’s customers also value convenience and fast delivery more than low prices and wide product selection. Amazon’s customers are more likely to shop online and use delivery options than pickup. Amazon’s customers are more loyal than Walmart’s customers, as they are more likely to stick with Amazon for their shopping needs, especially if they are Prime members.
Fulfillment
Walmart and Amazon have different fulfillment strategies and capabilities. Walmart leverages its physical store network and distribution centers to fulfill its online orders. Walmart offers various fulfillment options, such as free two-day shipping, free next-day shipping, free same-day delivery, and free in-store pickup. Walmart also launched Walmart Fulfillment Services (WFS) in 2020, which allows third-party sellers to use Walmart’s fulfillment network and offer free two-day shipping to their customers. Walmart’s fulfillment costs accounted for 9.5% of its online sales in 2023.
Amazon relies on its fulfillment centers and delivery partners to fulfill its online orders. Amazon offers various fulfillment options, such as free two-day shipping, free one-day shipping, free same-day delivery, and free two-hour delivery. Amazon also offers Fulfillment by Amazon (FBA), which allows third-party sellers to use Amazon’s fulfillment network and offer Prime shipping to their customers. Amazon’s fulfillment costs accounted for 15.3% of its online sales in 2023.
Marketing
Walmart and Amazon have different marketing strategies and services. Walmart focuses on low prices and everyday value as its main marketing message. Walmart also uses traditional media, such as TV, radio, and print, as well as digital media, such as social media, email, and online ads, to reach its customers. Walmart offers various marketing services to its third-party sellers, such as sponsored products, sponsored brands, and display ads. Walmart’s marketing costs accounted for 3.2% of its online sales in 2023.
Amazon focuses on convenience and customer experience as its main marketing message. Amazon also uses digital media, such as online ads, email, and social media, as well as word-of-mouth and customer reviews, to reach its customers. Amazon offers various marketing services to its third-party sellers, such as sponsored products, sponsored brands, sponsored display, video ads, and Amazon DSP. Amazon’s marketing costs accounted for 5.1% of its online sales in 2023.
Subscription
Walmart and Amazon have different subscription services and benefits. Walmart launched Walmart Plus in 2020, which is a membership program that costs $98 per year or $12.95 per month. Walmart Plus offers free unlimited delivery, free next-day and two-day shipping, fuel discounts, and mobile scan and go. Walmart Plus had over 32 million members in 2023, up from 15 million in 2022.
Amazon launched Amazon Prime in 2005, which is a membership program that costs $119 per year or $12.99 per month. Amazon Prime offers free two-day, one-day, and same-day shipping, free two-hour delivery, free access to Prime Video, Prime Music, Prime Reading, Prime Gaming, and more. Amazon Prime had over 200 million members in 2023, up from 150 million in 2020.
Challenges
Walmart and Amazon face different challenges and opportunities in the ecommerce space. Walmart’s main challenges are to increase its online market share, improve its customer loyalty, and enhance its profitability. Walmart’s main opportunities are to leverage its physical store network, expand its online grocery business, and grow its third-party seller marketplace.
Amazon’s main challenges are to maintain its ecommerce dominance, diversify its revenue streams, and deal with regulatory and legal issues. Amazon’s main opportunities are to grow its AWS and advertising businesses, innovate its physical retail and grocery presence, and enter new markets and industries.
Growth
Walmart and Amazon have different growth rates and indicators in the ecommerce space. Walmart’s online sales grew by 37% in 2023, down from 69% in 20221. Walmart’s online sales reached $67 billion in 2023, up from $49 billion in 20221. Walmart’s online sales represented 12% of its total sales in 2023, up from 8% in 20221. Walmart’s online market share was 7.6% in 2023, up from 6.4% in 2022.
Amazon’s online sales grew by 21% in 2023, down from 38% in 20221. Amazon’s online sales reached $332 billion in 2023, up from $274 billion in 20221. Amazon’s online sales represented 86% of its total sales in 2023, up from 83% in 20221. Amazon’s online market share was 37.7% in 2023, down from 39.8% in 2022.
Conclusion
Walmart and Amazon are both ecommerce giants, but they have different strengths and weaknesses. Walmart has the advantage of low prices, wide product selection, and physical store network, while Amazon has the advantage of convenience, fast delivery, and customer loyalty. Walmart is catching up with Amazon in terms of online sales growth, fulfillment capabilities, and subscription services, while Amazon is diversifying its revenue sources, innovating its physical retail and grocery presence, and entering new markets and industries. Both companies face challenges and opportunities in the ecommerce space, and the competition between them is likely to intensify in the future.
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I hope you enjoyed this blog post and learned something new.
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