The Washington Post reports inflation hit 9.2% in March, a 40-year high for the nation. While this has caused online prices to increase, it has also contributed to growth in the market as more consumers look online for savings, according to Barron’s.
Amazon is still by far the leader in e-commerce, but Walmart and other historically brick-and-mortar companies are vying for market share.
How they stack up
As of October 2021, Amazon has 40.4% of the e-commerce market share, while Walmart owns 7.1%, as shown in a recent JungleScout report. Amazon ships to more third-party sites worldwide, Prime memberships dwarf Walmart+ subscribers (112 million vs 8.2 million) and Amazon ships to more than four times the countries.
However, the gap between Amazon and Walmart’s online revenue shrinks every year. According to Forbes, “in the three years from 2019 to 2021, Walmart.com’s revenue tripled, while Amazon’s grew approximately 35%.”
Walmart’s approach to online retail has been evolving for years, but new corporate changes and a focus on innovative technology are expected to carry that momentum forward.
Corporate changes
- In November 2021, Walmart announced Brett Briggs, its chief financial officer, would transition from the company. The transition will be complete by the beginning of 2023.
- According to Reuters, Briggs “helped oversee a period of rapid change at Walmart” beginning in 2015.
- E-commerce chief Casey Carl departed and was replaced by Tom Ward in January, per The Wall Street Journal. Ward had been leading the push to use stores as fulfillment hubs.
Drones
- Amazon’s drone program, nearly a decade old, has faced mounting challenges including a brush fire caused by a drone crash, according to Bloomberg.
- Bloomberg also reported that Amazon Prime Air Division hopes to complete 12,000 test flights by end of 2022.
- DroneUp announced its was partnering with Walmart in 2021 to provide commercial deliveries as a trial of its technology.
- Walmart is hoping to expand consumer trials to 4 million potential households by the end of the year.
- Packages will need to weigh less than 10 pounds, and the drones will service sites in Arizona, Arkansas, Florida, Texas, Utah and Virginia.
Fulfillment centers
- CNBC reports Walmart will be using retail stores as “shoppable fulfillment centers” in the future.
- In an interesting reversal, Amazon opened its first physical retail location selling apparel, according to Business Insider.
Autonomous vehicles
- Walmart is partnering with Cruise, a subsidiary of GM, to pilot autonomous vehicle deliveries in Arizona this year, according to TechCrunch.
- Amazon’s Scout, an autonomous delivery robot, has been piloting deliveries for over a year, per The Washington Post.
What’s next?
E-commerce sales are projected to grow by 50% in the next three years, according to Statista. In 2025, sales could reach $7.4 trillion. As the market grows and competitors clamor for share, consumers may win with same-day shipping and lower costs, though they might need to invest in more subscription services.