Can Amazon Overtake Walmart as the Largest Retailer in the US?

The question of whether Amazon can overtake Walmart as the largest retailer in the US is multifaceted, depending on how one measures their dominance. Both companies operate in retail, but their business models are significantly different, which complicates any direct comparison.

Different Business Models, Different Metrics

Amazon and Walmart are not only competing in the same market but also operating under vastly different models. According to recent statistics, Amazon controls about 45% of all online sales in the US, whereas Walmart's share in this sector is only around 6%. However, when comparing their on-ground and online sales separately, the picture changes. Walmart dominates the brick-and-mortar market, whereas Amazon is the leader in the online space. Currently, Amazon's strategy and delivery models are continuously improving, and it might eventually surpass Walmart in total sales. Nonetheless, their distinct business models mean they are not direct competitors.

Consumer Perception and Regional Factors

Consumer perception plays a significant role in how these retailers are received. In the US, many view Amazon as more convenient, while others are critical of Walmart, often associating it with a reputation for dirtiness and lack of quality. In urban areas of other countries, Amazon may compete effectively against big box stores, but in rural regions, it faces challenges. For instance, in Canada, there are significant reservations about Amazon's impact on employment and the type of products it sells, with a preference for domestic and better-quality items.

The Future of Retail Expansion

Amazon has not yet entered the physical retail market, which is another key differentiator. However, if Amazon were to expand its brick-and-mortar presence, including free shipping services similar to Walmart, it could potentially dominate more of the retail sales market. Yet, this would require a substantial investment in infrastructure. Speculation suggests that within the next 20 years, Amazon’s presence in the physical retail sector could indeed rival that of Walmart, but it’s a long-term goal full of uncertainties.

Evolving Market Landscape

Despite these predictions, the market landscape continues to evolve. While Amazon still accounts for roughly 50% of all e-commerce sales in the US, Walmart is gradually gaining ground. According to eMarketer, Walmart surpassed Apple in 2018 to become the third-largest online retailer, trailing only behind Amazon and eBay. This trend indicates that Walmart is making significant strides in the e-commerce sector, enhancing its position as a formidable competitor.

Whether Amazon can overtake Walmart as the largest retailer in the US remains to be seen. Factors such as consumer preferences, technological advancements, and strategic business decisions will all play crucial roles in shaping the future of these giants in the retail industry.