Amazon and Walmart seen as fraternal twins in retail

Walmart and Amazon are constant competitors, much like siblings in a race for dominance in the world of global e-commerce. Researchers at Jungle Scout report Walmart and Amazon can each claim victories, but like fraternal twins there are some key differences.

Amazon’s streaming services and Walmart’s longstanding brick-and-mortar presence give each an edge among different audiences, according to the report. Amazon is expected to end this year with more than $468 billion in global e-commerce sales revenue, roughly six times Walmart’s expected $75 billion of global online revenue. Amazon Web Services and advertising revenue account for more than half of the company’s total sales. When adding in Walmart’s store sales, revenue will again be more than half trillion dollars this year and that also included growing service sales from advertising.

The different makeup of the two competitors’ operations sometimes makes it difficult to do true comparisons. Amazon accounted for more than 40% of U.S. online retail sales last year, is turning in blockbuster profits every quarter and expanding into brick-and-mortar retail and home delivery of online orders. Walmart’s market share in the U.S. is 7.1%, according to Jungle Scout. Walmart has grown its e-commerce revenue from $25.1 billion in 2019 to $75 billion this year amid the pandemic. The analysis also finds that Walmart’s e-commerce sales could increase by as much as 89% year-over-year in 2021, more than five times the 16% online sales growth it predicts for Amazon.

Jungle Scout reports there is enough business on the planet for Amazon and Walmart to continue growing, but it’s Walmart with the biggest growth potential. Part of that strategy includes adding more marketplace (online third-party) sellers. Amazon has a reported 6.3 million third-party sellers worldwide that ship goods to 100 plus countries. Walmart has added 114,700 third-party suppliers that sell goods in 24 countries around the world. The report found the third-party opportunity to be much greater on Walmart.com that averages 1,918 customers per 1 seller, compared to 48 customers per 1 seller on Amazon.

“Walmart’s installed customer base will be a major temptation for e-commerce sellers who like the fact that Walmart.com market place is less crowded than Amazon at least for now,” said Mike Scheschuk, chief marketing officer at Jungle Scout.

Jungle Scout also reports 39% of Amazon third-party sellers are considering selling on Walmart Marketplace in 2021, with 95% of them operating in the U.S. Amazon marketplace. In addition, one-third of Amazon third-party sellers believe Walmart’s online presence will compete strongly with Amazon’s online presence in 2021 and beyond, and more than one in five (22%) of Amazon sellers are worried about competition from Walmart.

Walmart has benefited from its grocery pickup which is an online sale and is continuing to grow its membership base for Walmart+, which offers perks like free prescriptions for common drugs, 5-cent-per-gallon discount of gasoline prices at Walmart fuel stations, Scan & Go option when shopping in stores. Walmart+ members will also receive early and exclusive shopping opportunities for holiday sales.

Jungle Scout found 57% of Amazon-exclusive online shoppers also shop in Walmart stores. The study also found during 2021 that 65% of consumers shopped on Amazon and 37% shopped on Walmart.com. The study found 35% of Amazon shoppers do not shop at Walmart.com, compared with 9% of Walmart.com shoppers who do not shop on Amazon.

For clothing 35% were exclusive to Amazon and 33% exclusive to Walmart.com, beauty/personal care 25% Amazon and 22% Walmart, home and kitchen 17% Amazon to 16% Walmart. Amazon-exclusive shoppers were more apt to buy electronics, while Walmart.com-exclusive shoppers were buying groceries (41% at Walmart to 20% for Amazon) and cleaning supplies (30% Walmart, 17% Amazon), as well as over-the-counter medicines (29% Walmart, 10% Amazon).

The Jungle Scout report also uncovered several other interesting shopping behaviors associated with the two retail rivals.
• 73% of Walmart-exclusive shoppers earn household income below $50,000/year, versus 54% of Amazon-exclusive shoppers.
• 41% of Walmart-exclusive shoppers are aged 18-34, versus 32% of Amazon-exclusive shoppers.
• 54% of Amazon-exclusive shoppers are making purchases on Amazon weekly or more.
• 57% of Walmart.com-exclusive shoppers are making purchases on Walmart.com weekly or more.
• 76% of Amazon-exclusive shoppers and 67% of Walmart.com-exclusive shoppers are looking for products with the lowest price when shopping online.
• 76% of Amazon-exclusive shoppers and 56% of Walmart.com-exclusive shoppers are looking for products with the fastest shipping when shopping online.