Why Walmart is beating Amazon in the e-commerce wars Fer House

Five years ago.

Amazon was the undisputed market leader in the US online grocery market. However, now Walmart has taken over the lead, and and continues to gain market share. Whathappened?

The Turning Point

It's a striking finding:

In 2016, Amazon still accounted for a U.S. 24% share of the online grocery market (food purchases). Walmart, on the other hand being the largest brick-and-mortar supermarket chain in the U.S. held only 16.3% of the market. However, by 2019 Walmart had closed the gap with its online competitors and surpassed Amazon. Since then, Amazon has only seen the gap with the new market leaders with a widening gap between them.

According to calculations by Insider Intelligence. By the end of 2024, Walmart's online food sales will reach $58.92 billion (nearly €54 billion), the This is $40.5 billion (€37 billion) more than Amazon's $40.5 billion (€37 billion) which is $18 billion more than Amazon's $40.5 billion (€37 billion). This gives Walmart a market share of 26.9%, the while Amazon's market share fell further to 18.5%. Kroger, Target Kroger, Target and Albertsons are still far behind.

Expensive technology Despite Amazon's significant food market has made significant efforts to including the acquisition of Whole Foods in the brick-and-mortar world and the launch of cashless payment Amazon Go and Fresh stores, the and online delivery services. But that hasn't stopped Walmart from overtaking it. However, the online giant faces many obstacles.

For example, the organic supermarket chain Whole Foods is positioned too high end to attract mass consumers. Expanding its own stores has also become difficult: Amazon is struggling with cashless shopping expensive technology. and has suspended further implementation of its Amazon Fresh and Go stores in order to allow time to refine the strategy first. For example, in some stores, the retailers are testing the ability to shop without an app and paying at traditional cash registers.

Store Network

The economic climate hasn't helped either. Due to high inflation U.S. consumers have also begun to "downscale their spending," i.e., they're shopping at cheaper chain stores and replacing brands with private labels. Wal-Mart has benefited from its sharper Wal-Mart has benefited from its sharper price positioning. In addition, the chain has made its presence felt in 90 percent of U.S. households less than 10 miles away with a brick-and-mortar store. and has pickup points in parking lots or in-store.

Amazon Fresh also has a number of pickup points that but still relies heavily on delivery services. The online giant is now looking to lower the barriers by unifying shopping experience across its brands to lower the barriers. Delivery options are gradually opening up to consumers who don't have a Prime subscription. It's worth noting that Amazon has a highly developed logistics network.

Capital-intensive model As in Europe, during the epidemic, the U.S. online grocery experienced strong growth. in 2020, with a 56% increase in market share. However, by 2021, the online market share for all retailers fell again. Consumers then increasingly turned to Instacart, delivery services such as DoorDash or Uber Eats. which typically pick up from smaller food retailers. This has led to large players (and therefore Walmart) to lower sales. This year, Walmart will be the only major food retailer to increase its market share.

Insider Intelligence analyst Brian Lau said: "The rapid rise of delivery apps in 2021 is capitalizing on the sudden digitization due to the epidemic in the grocery market." "Many companies, such as Doordash, are are promising super-fast deliveries in 30 minutes or less and offer deep discounts to attract new customers."

However, the boom was short-lived: U.S. consumers still prefer to buy in bulk. Amid rising inflation and macroeconomic conditions have worsened. The capital-intensive model of 15-minute delivery became too expensive. People are starting to look more for bargain deals that

This worked in Wal-Mart's favor.

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