Trends 2021: Walmart vs. Amazon

Walmart has made several recent changes that have the potential to affect brand sales at the retailer. Nearly half (45%) of our Trends survey respondents identified “combining buying teams for the stores and e-commerce businesses into one team” as the most impactful of the changes. Most of those respondents view the integration as a positive move, crediting it with driving alignment of strategies across physical and digital channels. And brands whose products sell well online but currently have limited in-store penetration believe it will help expand total distribution and increase the number of consumers they reach. “Our products have great online success at Walmart and we believe this will help sell-in for [the] in-store shelf,” one respondent said. Walmart’s more holistic view provides the ability to correlate overall business management and link more directly to performance, respondents said. “We will now get credit for the money we spend with Walmart Media Group – and hopefully more impactful in-store opportunities,” one respondent specified. Not having to sell through multiple teams also makes it more likely that 360-degree plans will be executed, respondents believe, allowing brands to develop one unified plan for bigger lifts across physical and digital channels. Whitney Cooper, Walmart’s director of omnichannel advertising transformation and acceleration, says merging the buying teams, along with combining store and online supply chain and finance groups, laid the groundwork for the retailer’s new omnichannel advertising strategy. “Over the next year, you’re going to see that we’re really focused on streamlining and making it really easy for our supplier partners to build out plans across all of our teams,” Cooper says. “We’ll be able to move faster, and you’ll have more options in terms of what you can do as far as advertising in the store and across all of our channels.”Another one-third (33%) of respondents identified the merger of Walmart’s online grocery experience with the retailer’s main e-commerce platform – the more shopper-facing result of the same “One Walmart” philosophy that drove the merger of the merchandising organization – as their best bet for business impact. The primary reason cited here was an improved, seamless shopper experience.Although in the minority in terms of overall impact (selected by only 1% of survey respondents), Walmart’s focus on sustainability is proving favorable for players in the natural space as they continue to gain new placements. Examples from the field of products recently earning broader distribution include Health-Ade kombucha, Hello Products oral care items, Soylent meal replacement shakes and Eco Lips organic lip balms.Although Walmart+ has earned a lot of attention (thanks partly to its massive ad campaign), no respondents believe the fledgling Walmart+ loyalty program has what it takes to completely overtake key competitor Amazon Prime. Skeptics cited lack of capabilities and less breadth of products and services. “Amazon [Prime offers a] fully integrated experience where shopping and entertainment is combined. Walmart, by contrast, is asking the same annual fee from consumers for less than half the service,” one respondent said. Amazon’s first-mover advantage and well-entrenched member base are mentioned by the 42% of respondents who said Walmart+ will never be on par with Prime. However, those who think Walmart+ can be competitive with Prime (another 42%) identify Walmart’s pricing and brick-and-mortar footprint as advantages. “Amazon’s established base and wide range of products give them a huge advantage. But, Walmart’s location base allows for much faster delivery/pickup, which appears to be valuable for some categories,” one respondent said.With the accelerated spike of e-commerce spending brought on by the COVID-19 pandemic, brands have had to invest more in their online presence. Almost one-third (32%) of survey respondents said they have become more dependent on Amazon sales due to the pandemic, though half (51%) saw no change in their degree of dependence. For a deeper dive into the survey and its results, see the "Summary of Findings."

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