Walmart online grocery

Tom Dougherty, CEO – Stealing Share

1 May 2019

Walmart online grocery seriously stalking Amazon’s leadership

Thank you, Walmart online grocery. Thank you for giving me one-day shipping from Amazon Prime.

I generally hate Walmart. I don’t hate it as a business or as a brand. In fact, its defensive position of lowest price dominates the retail landscape. (It’s the stupidity of its competitors that keeps Walmart on top.)

Walmart online groceryBut I just hate going into Walmart. I don’t like the way most of the stores are set up and checking out is a nightmare. It’s just not for me.

But it is for most folks. In grocery alone, it ranks No. 1 in the US with 26% market share. Followed by Kroger (10.1%) and Albertsons (5.3%). That’s an astounding lead for the retail giant.

What’s interesting, however, are the inroads Walmart online grocery is making into Amazon’s market share. Amazon still holds the market leadership with 38% share. But that’s a far cry from the 74% lead it held in 2017.

“Walmart online grocery, with its acquisition of Jet, is becoming the biggest threat to Amazon’s once dominant position. Its brand position of “Save Money, Live Better” works for online retail as well. Walmart online grocery, in a way, owns greater brand permission than Amazon for grocery.”

Walmart online grocery must terrify Amazon

What gives? Walmart online grocery and others are pressing Amazon to up its game. Even as Amazon makes the announcement that it is moving closer to one-day shipping, Walmart responds by basically saying, “We’re going to do that too, but without the membership fee.”

Personally, I think that the Prime membership fee is inconsequential for most people who use Amazon, especially given the other services that come with it. But Amazon’s feeling the heat.

While Amazon grocery’s market share is dropping, Walmart online grocery is rising from 5% to 15% market share in the last year. Amazon’s got to be terrified as its lead has dwindled from a 69-point lead to 23. This comes as experts are expecting the category to be a $36.2 billion business when 2019 is all said and done, up $10 billion from last year.

Walmart, with its acquisition of Jet, is becoming the biggest threat to Amazon’s once dominant position. Its brand position of “Save Money, Live Better” works for online retail as well. Walmart, in a way, owns greater brand permission than Amazon for grocery. In fact, that’s one reason why some Amazon stores, such as Whole Foods, are struggling.

History shows us that there are few companies that can compete with Amazon. I talk all the time about the demise of retail. More times than not, Amazon headlines the story. Walmart is doing better than competing with Amazon. It is forcing Amazon to be better. You’ve seen the ads. So thanks, Walmart.

See more posts in the following related categories: Grocery

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