Updated: Clash of the Titans: Walmart and Amazon Battle for Dominance Intensifies

Update 09/12/2024: Amazon and Walmart have once again raised the stakes in their ongoing ecommerce rivalry, introducing new initiatives aimed at capturing an even larger slice of the retail market.

Amazon has launched its new “Saver” private-label grocery brand, while Walmart is expanding its multichannel logistics and cross-border fulfillment services. These strategies are part of a broader push to dominate the retail sector, both in-store and online.

According to Forrester’s 2024-2029 US Online Retail Forecast, Amazon and Walmart have significantly increased their share of total and online retail sales in the US over the past six (6) years.

If current trends persist, the two giants are projected to control one-fourth of total US retail sales and two-thirds of online retail sales by 2029, with combined retail sales reaching $1.5 trillion and online retail sales surging to $1.1 trillion.

These aggressive moves signal substantial implications for sellers on both platforms. With Amazon and Walmart continuing to grow their market dominance, sellers will need to adapt to changing business models and leverage the opportunities presented by these initiatives, or risk being outpaced in an increasingly competitive ecommerce landscape.

Amazon’s ‘Saver’ Brand: A Bold Move in the Price War

Amazon has revealed its newest weapon in the grocery price war—Amazon Saver. This private-label grocery brand offers no-frills items, mostly priced under $5, and targets budget-conscious consumers.

Prime members can save an additional 10%, further enhancing the brand’s appeal. The launch of Amazon Saver comes on the heels of price cuts by competitors Walmart and Target, with Amazon aiming to undercut them on a wide range of essential grocery items.

These discounts are not limited to Saver. Prime members can also enjoy up to 50% off rotating grocery favorites each week, as well as special deals on Amazon Fresh and Whole Foods items. The strategy is clear: Amazon wants to make groceries more affordable, particularly in the face of rising concerns over inflation and food prices. 

For sellers, this price war could have mixed effects. On one hand, it creates pressure to compete on price, potentially eroding profit margins. On the other, Amazon’s aggressive pricing could drive more traffic to its marketplace, benefiting third-party sellers who can tap into that increased demand.

Sellers need to closely monitor their pricing strategies and look for ways to differentiate through niche products, premium offerings, or unique value-added services to avoid being caught in a race to the bottom.

Related: Repricing Strategy for Selling on Walmart vs Amazon

Walmart’s Multichannel Logistics and Cross-Border Fulfillment Solutions

Walmart is not sitting still.

At the 2024 Walmart Marketplace Seller Summit, the company introduced multichannel logistics and cross-border fulfillment services, positioning itself as a key player in the third-party logistics (3PL) space. These services allow Walmart sellers to use Walmart’s supply chain to fulfill orders from any ecommerce platform, not just Walmart.com.

The multichannel solution offers fast, reliable shipping with unbranded packaging and lower fulfillment costs, averaging 15% lower than competitors. Additionally, Walmart’s new cross-border fulfillment service for Full Container Load (FCL) shipments will allow sellers to move products from Asia directly to Walmart Fulfillment Services (WFS) facilities in the US, streamlining their operations and potentially lowering shipping costs.

Related: Battle for Last-Mile Logistics Heats Up as Amazon Expands Same-Day Delivery Network

For ecommerce sellers, Walmart’s expanded logistics offering presents a golden opportunity. 

Walmart’s competitive pricing and growing fulfillment network could help sellers cut costs and reach a broader audience, particularly as holiday demand peaks. Moreover, Walmart’s carrier network gives sellers more flexibility in shipping options, opening the door for small and midsize businesses (SMBs) to compete more effectively in global markets.

Related: Maximize Your Online Sales: The Benefits of Choosing Walmart for Your Ecommerce Business

Navigating the New Terrain

The price wars and expanded logistics services from Amazon and Walmart are reshaping the competitive landscape for sellers. Both retail giants are pulling out all the stops to lure consumers with lower prices and entice sellers with better fulfillment options.

• Price Pressure: Amazon’s aggressive price cuts, particularly in the grocery space, are likely to drive competition across a wide range of products. Sellers should focus on strategies like bundling, offering exclusive products, or tapping into niche markets to avoid getting caught in a low-margin trap.
• Logistics Innovation: Walmart’s multichannel and cross-border services offer sellers a chance to improve their logistics game. By leveraging Walmart’s supply chain and fulfillment capabilities, sellers can reduce costs, streamline operations, and improve shipping times—crucial advantages as the holiday season approaches. Sellers operating across multiple platforms can use these services to ensure faster deliveries and manage returns more efficiently.
• Diversification: With Walmart’s logistics services expanding and Amazon’s marketplace bustling with new offerings, sellers should consider diversifying their product lines and sales channels. By not being overly reliant on one platform, sellers can take advantage of both marketplaces’ strengths and mitigate risks related to price wars or platform-specific changes.
• Tech and Automation: Sellers can further enhance their operations by using automation tools to manage inventory, optimize listings, and track performance. For example, integrating AI-driven tools to monitor demand and sales trends can help sellers stay competitive without having to constantly adjust manually.

The Battle Rages On

The rivalry between Amazon and Walmart is pushing both companies to innovate, ultimately benefiting consumers with lower prices and better services. However, for sellers, this competition can be both an opportunity and a challenge.

The key to thriving in this fast-changing ecommerce environment will be adaptability, as sellers need to stay nimble, adjust pricing strategies, and optimize fulfillment processes.

As Amazon continues to expand its private-label offerings and Walmart ramps up its logistics capabilities, the battle for ecomm dominance will only intensify. Sellers who can effectively leverage these new tools and services while maintaining their unique value propositions will be the ones to come out on top in this increasingly competitive arena.

Related: Selling on Walmart vs Amazon: Everything Sellers Need to Know

Update 06/21/2023: Following in on Amazon’s footsteps, Walmart just launched an inventory distribution program called Inventory Transfer Services (ITS). 

“Our new solution allows for the seamless and efficient transfer of inventory to Walmart fulfillment centers, optimizing supply chain logistics and enabling faster delivery to customers,” said Jaré Buckley-Cox, VP of Walmart Fulfillment Services, in a LinkedIn post.

According to Buckley-Cox, ITS aims to enhance the availability of sellers’ inventory across Walmart fulfillment centers, cut down on inbound shipping costs by consolidating goods at a central hub, and provide faster shipping options.

The launch comes after the retailer announced they’re building small warehouses within their existing supercenters and four next-gen fulfillment centers (FCs) over the next few years. These high-tech FCs will be equipped with “a powerful combination of people, robotics, and machine learning,” allowing Walmart to take their 12-step fulfillment process down to just five.

With improved fulfillment speed and capacity, these next-gen FCs “could provide 75% of the US population with next- or two-day shipping on millions of items, including Marketplace items shipped by Walmart Fulfillment Services.”

When combined with traditional Walmart FCs and store locations, the retailer can reach 95% of US shoppers with 1 to 2-day shipping and 80% of the population with same-day shipping.

By contrast, Amazon has FCs within one hour of 77% of the US population. And given how both of these retail giants have many products with similar prices, customers will likely prefer the one with the fastest delivery.

No wonder Walmart is making huge strides in setting their stores and FCs up to fulfill online orders. Not only will these upgrades allow them to keep up with increasing demand for same-day shipping but also potentially to outdeliver Amazon.