Goliath vs. Goliath: Walmart Takes Inspiration From Amazon To Go After Amazon – The Average Joe
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    Goliath vs. Goliath: Walmart Takes Inspiration From Amazon To Go After Amazon

    victorlei

    August 1, 2023

    This company is beefing up its membership service, pushing further into e-commerce while expanding its fulfillment centers — and if you thought we were talking about Amazon, you’re mistaken. It’s Walmart.

    Over the years, Walmart has taken some inspiration from Amazon:

    1/ E-commerce: With Amazon’s market share expected to rise to 47.9%, it’s crushing the e-commerce market. But Walmart has turned itself into its own e-commerce juggernaut with $82B in annual digital sales — however, its 6.7% market share is still far from Amazon’s.

    2/ Subscriptions: Prime has become one of Amazon’s most successful products at the center of its business. So in 2020, Walmart launched its own subscription service, Walmart+ — which offers free shipping, travel rewards and other discounts. Last year, Walmart also partnered with Paramount+ to give members access to the streaming service. Sound familiar?

    3/ Ads: Amazon is also becoming an advertising behemoth — bringing in over $37.7B in ad revenue last year with 7.3% of the digital ads market share — putting it right behind Meta and Alphabet. While Walmart only made $2.7B from ads last year, it’s strategically pushing ads where it has an advantage over Amazon.

    Ads coming to an aisle near you

    Walmart won’t beat Amazon in online sales (not yet, at least), but it’s using its 4.7K+ locations to serve up more ads on digital screens, sampling stations (Costco vibes), self-checkout lanes and shopping aisles.

    • Earlier this year, Walmart’s CEO said he expects earnings to grow faster than sales — driven by more profitable segments like advertising.
    • Last year, Walmart’s ads business grew ~30% while total sales rose ~7% — but still makes up less than 1% of Walmart’s total sales.

    Later this year, US shoppers can expect to see 170K digital screens and 30-second radio ad broadcasts across its stores. Eventually, all roads lead back to ads.

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