Amazon is quite the juggernaut when it comes to eCommerce in the US. For most, it has become second-hand in shaping where we buy our products from due to selection and speedy shipping times. So much so that 2-day shipping has become the norm that other eCommerce marketplaces have tried to adopt (some better than others).
Although Amazon handily dominates online marketplaces, competitors are finally starting to adapt and “borrow” from the learning’s of Amazon. Namely Walmart, who is in a good competitive position with their Walmart Fulfillment Services and a subscription service, Walmart+ (compared to Amazon Prime).
The success of these services has undergone intense stress as the coronavirus pandemic has swept across the US (and most of the world). But even amidst quarantines and wild swings in buying and shopping behavior, Walmart’s online business has performed admirably. Positioning them as a rising star and the marketplace to keep an eye on moving forward.
Given all of that, we want to focus a bit more in-depth into how the Walmart marketplace compares against the behemoth of eCommerce that is Amazon.
eCommerce Market Share & Web Traffic
Walmart has finally shot past eBay in their share of the US eCommerce sales for the first time – taking up 5.8% over eBay with 4.5%. Amazon is still number one by a wide berth at 38% of all US eCommerce sales.
In September 2020, Walmart.com had 385.5 million web visits globally and 6.4 billion combined visits from May 2019 to September 2020. Alternatively, Amazon had 2.4 billion web visits in September 2020 and 39.6 billion combined visits from May 2019 to September 2020, being the most visited eCommerce marketplace by a massive margin.
Physical Locations
As no surprise to anyone, Walmart’s physical locations vastly outnumber Amazon. Walmart has over 5,000 retail locations in the US alone where as Amazon is steadily creeping towards 600 retail locations as of July 2020.
International Coverage
Walmart has online marketplaces available in 10 countries and physical location in 27 countries. Amazon has online marketplaces available in 16 countries, but their physical locations only cover the US, Canada, and UK at the moment.
How do Walmart Shopper Demographics differ from Amazon?
For the average Walmart and Amazon shopper, they are almost identical except for one key detail – Walmart has a higher portion of lower-income shoppers. The data also showed that the generational spread of shoppers was almost identical, so retailers are essentially going after the same consumer. With Amazon trying to appeal and attract more lower-income shoppers, this has traditionally been a standard for Walmart being more competitive for consumers in this area.
Walmart Fulfillment Services (WFS) vs Fulfillment by Amazon (FBA)
Currently, both WFS and FBA share many similarities. Both services allow third-party vendors to ship their products from a fulfillment center where both can:
- Sort, pick, pack, and track their products
- Handle shipping, returns, and refunds
- Provide some sort of fast shipping – usually 2-day
- And in select areas provide same-day shipping options
However, Walmart has one key advantage here in that they allow for pickup of items at any of their stores while Amazon only has a few locations that provide any sort of online pickup services.
How do their Seller Services differ?
Amazon has a head start here as they have been focusing on eCommerce for decades now while Walmart has just begun. Still, Walmart has been making huge leaps withing the last five years as they are starting to put a heavy focus on eCommerce and online shopping. Over time, Walmart should catch up and match most of the same services Amazon offers.
However, online sellers will potentially see greater returns from marketing spend when invested into Amazon Seller services compered to Walmart. The services offered by Amazon offer more control over audience targeting and deeper data insights that when used properly, can yield higher profitability.
How Does Walmart Plus compare to Amazon Prime?
It was not until recently that Walmart announced Walmart+, its paid premium subscription to rival Amazon Prime. Both subscriptions are very similar when it comes to perks and benefits offering free 2-day shipping, early access to deals, and express delivery for groceries and select products. They do differ in a few ways offering their own unique benefits:
Walmart+ Benefits
- Cheaper at $98 for a yearly subscription vs $119 for Amazon Prime
- Fuel discounts at Walmart gas stations
- Mobile scan & Go service available in-store
- They dropped their minimum $35 purchase requirement for 2-day shipping on select goods
- Free delivery from your store for groceries and other items
- They are planning to launch a Walmart Plus credit card
- They are also planning to launch a Walmart Plus entertainment package
Amazon Prime Benefits
- Prime Video
- Prime Gaming
- Amazon Pharmacy
- Amazon Reading & Amazon First Reads
- Ad-free Amazon Music
- Amazon Photos
- Membership Sharing
- And many other supplemental benefits (some paid)
Challenges for Both Marketplaces
Counterfeit Products
Third-party sellers make up an increasing share of products on Amazon. With that, comes a host issues including, fakes, counterfeits, and unsafe products to consumers. Amazon is also struggling to stop it all. The pandemic shed light into how bad this can get when Amazon was trying to stamp out rampant price gouging and fakes for face masks and hand sanitizer.
Antitrust Matters
While not alone in this, Amazon has faced a House-led investigation for engaging in anti-competitive monopoly tactics to become the juggernaut that it is. After a 16-month investigation, Amazon was accused of setting rules for years that put smaller, competing sellers at a disadvantage amongst other accusations.
Walmart Playing Catch Up
Naturally, the Walmart Marketplace has a lot of big strides to cover in the shadow Amazon has cast for almost three decades in eCommerce. However, they do have the infrastructure, capital, and foresight to learn from the successes and failures from Amazon. So, while they are behind, they have been making admirable progress indicated with the launch of Walmart Fulfillment Services and Walmart Plus.
eCommerce Growth
Amazon may be a juggernaut across eCommerce, but Walmart (and others) have seen tremendous growth in 2020:
Walmart Quarterly eCommerce Net Sales Growth
- Q1 2020: 74% year-over-year
- Q2 2020: 97% year-over-year
- Q3 2020: 79% year-over-year
Amazon Quarterly Net Sales Growth
- Q1 2020: 26% year-over-year
- Q2 2020: 40% year-over-year
- Q3 2020: 37% year-over-year
Both companies offer huge opportunities for sellers in the online shopping space. The sales potential on Amazon is clearly, massive. However, Walmart is experiencing rapid growth and success with the means to take even more market share away from Amazon. With Walmart.com now moving into the #2 spot for eCommerce marketplaces, it would be wise to get on Walmart now than later so you can grow with it.
Need help getting setup and learning more about the ins-and-outs of Walmart.com? Partner with the expert teams here at HINGE COMMERCE. We have the experience and know-how to get your products in front of the millions of Walmart shoppers on one of the largest multi-channel retailers. We make it easy for you to get verified and begin selling your products online. We will always be by your side through it all and make sure of you see continued growth and reach.
Reach out to us today and see how we can help your business on some of the top eCommerce marketplaces.
