Why Amazon Is Winning The Consumer Battle Over Walmart

It had to happen. Consumer spending at Amazon
AMZN
now exceeds that at Walmart
WMT
. In my conversation with Scott Murray, SVP of data analysis at Pymnts.com, he explained how Amazon grew steadily to overtake the leading retailer.

He called it the ongoing battle for consumer spending. PYMNTS takes an in-depth look at the latest consumer spending data to discover how much more of total consumer retail spending Amazon and Walmart managed to win in the final months of 2021. Here we learn that Amazon captured nearly five times the share of U.S, household spending on electronics, appliances, sporting goods, hobbies, music and books than Walmart last year.

The report points out that in 2021 the average US household spent nearly five times as much on electronics and appliances at Amazon than they spent on the same types of products from Walmart. In 2021, twenty-five percent of consumer total electronics and appliance spending and 17% of their total sporting goods, hobbies, music and books expenditures went to Amazon. Amazon’s dominance is no surprise, since the company’s low prices have minimized the number of booksellers that can compete with the company.

The average U.S. household still spends roughly 10 times as much on food and beverages at Walmart than at Amazon. Walmart has a firm grip on its share in this sector of consumer retail expenditures. It features wanted items and especially wanted brands at low prices, while Amazon’s Whole Food stores are more expensive with their emphasis on organic food.

Apparel spending flipped in Amazon’s favor in 2021. The company’s visible effort to be the dominant seller of women’s fashion added momentum to their sales. Ever since 2017, Amazon has focused on fashion brands and athletic shoes for women. In 2021 it gained roughly 15% of consumer spending while Walmart’s share of consumer clothing spending was 6.5%, giving Amazon nearly a three-fold lead over its rival.

PYMNTS states in their new report about Amazon dethroning Walmart as the biggest winner of both consumer and retail spending in the U.S. Amazon captured 3.8% of all consumer spending. Consumers spent about $510,388 million with Amazon, amounting to 9.4% of what consumers spent on retail purchases in that year. This is more than Amazon or Walmart ever gained in any year since PYMNTS began tracking the rivalry in 2014. Walmart had a 3% of consumer spending and the report states that $472 billion went to Walmart, a sum that amounts to 8.6% of total consumer spending. Taken together, the report correctly states that $18 out of every $100 consumer spent on retail purchase in 2021 went to Amazon and Walmart.

It is estimated that consumers spend three times as much on food and beverages at Walmart than at Amazon. The report states that this is one area where Walmart has managed to hold and maintain its lead over Amazon. It currently earns nearly 10 times as much of consumer total spending on food and beverages than Amazon,

Amazon has taken the upper hand in the battle for dominance of the U.S. retail space. It is gaining ground in food and beverages where Walmart has a stronghold. The report concludes with “only time will tell if Walmart will be able to reverse this trend and recapture its share of the U.S. retail mountain.”

POSTSCRIPT: The battle between Amazon and Walmart is very complex. Amazon was quick to promote its prime membership, which assured quick delivery. Only lately Walmart has added its plus service, which is similar to prime. I have seen Walmart gain sales momentum through new promotions. It is a battleship that is hard to turn around.

Source: https://www.forbes.com/sites/walterloeb/2022/05/02/why-amazon-is-winning-the-consumer-battle-over-walmart/