Member Exclusive   //   May 23, 2024

Amazon Briefing: Amazon still dominates online commerce, but Walmart shoppers are spending more on average

This is the latest installment of the Amazon Briefing, a weekly Modern Retail+ column about the ever-changing Amazon ecosystem. More from the series →

Walmart’s e-commerce customers are outspending shoppers of rival Amazon, rusting the e-commerce behemoth’s crown as the king of online shopping, according to a new report. 

On average, customers spend about twice as much per year at Walmart’s web store than Amazon customers, according to a Tuesday report from Consumer Intelligence Research Partners, which has tracked and analyzed U.S. Amazon Prime memberships over the past decade. 

In an analysis of average annual spending for U.S. members of each retailer’s subscription program, CIRP found that Walmart+ subscribers spend an average of $2,200 per year, whereas Amazon Prime members spend $1,100 per year. Both services offer customers benefits such as free and fast shipping in exchange for an annual fee. 

Meanwhile, Walmart customers without a membership spend $1,000 a year, and Amazon shoppers without a Prime membership spend $600 a year. The analysis does not include in-store spending of Walmart’s brick-and-mortar stores.

“As Amazon’s total corporate revenue (which includes Amazon Web Services, advertising and other non-retail sources) approaches Walmart’s total corporate revenue, this greater average annual individual customer spend at must frustrate Amazon,” analysts Michael Levin and Josh Lowitz wrote. “After all, Amazon offers a much broader range of products and a much more targeted online shopping process compared to Walmart.”

It sheds light on a competitive edge Walmart has over Amazon.

Of course, Amazon is still the obvious leader when it comes to online shopping. Amazon’s estimated 180 million Prime members eclipse Walmart+’s estimated 59 million subscribers. Walmart’s global e-commerce sales surpassed $100 billion in 2023, a first for the superstore. While that shows Walmart is gaining on Amazon, the e-commerce giant still saw net sales from its online business that exceeded $231 billion last year.

But the more Walmart borrows from Amazon’s corporate playbook, the more the superstore takes market share away from its biggest competitor. From Walmart’s members-only subscription offering to the retailer’s push into streaming and advertising, it’s clear that the chain store has made a concerted effort to compete with Amazon. If Walmart continues to double down on its investments in Walmart+, and its shoppers maintain a higher spending average, that may be bad news for Amazon.

These days, Walmart and Amazon’s growth strategies seem very similar. Both companies are beefing up their subscription services to attract new members with various perks. Amazon, for example, wants consumers to know its Prime membership is more than just free shipping. It’s also an entertainment hub, which grants users access to movies, television shows and music, as well as shopping. Meanwhile, Walmart is likewise looking to expand beyond retail. Walmart+ members get access to Paramount+’s streaming service at no extra cost. Walmart also recently acquired TV maker Vizio, which will likely help scale Walmart’s fast-growing advertising business, Walmart Connect.

Walmart rolled out its third-party marketplace in 2009, which now has about 100,000 sellers — doubling in size in 18 months — according to a September report from Marketplace Pulse. Another Marketplace Pulse report found that more than 50% of Walmart sellers also sell on Amazon. (That said, the number is undercounted, and therefore the overlap is likely higher – between 80% and 90% – the report noted, as sellers tend to start on Amazon and then expand to Walmart.)

Recently, Walmart and Amazon have touted their super-fast delivery capabilities. Last month, Amazon said more than two billion items arrived the same or the next day to Prime members around the world in the first three months of 2024. Amazon delivered more than four billion items same day or next day in the U.S. In 2023, the company had previously said in January. Meanwhile, Walmart said in its latest earnings that it delivered 4.4 billion items the same day or the next day in the U.S. in 2023, beating Amazon.

Now, as both try to bring in more customers — especially to their paid subscription services — they are increasingly targeting affluent shoppers. Walmart, which is known for its low prices, has been renovating or constructing 800 retail locations in the U.S. that offer better lighting and higher-end products. In April, Walmart rolled out a private-label grocery brand called Bettergoods, featuring premium and specialty ingredients. As for Amazon, the company launched its foray into luxury fashion in the U.S. in 2020 with its Luxury Stores, where shoppers can buy high-end fashion and beauty brands. The venture was expanded to Europe two years later.

The difference between and customer spend signals the Bentonville, Arkansas-based chain store’s supremacy when it comes to grocery sales — an area where Amazon has long struggled to gain market share. 

“Perhaps with a little boost from pandemic-driven changes in shopping behavior, successfully translated that grocery success to online grocery shopping,” wrote CIPR’s Levin and Lowitz. “In contrast, Amazon continues to search for a successful plan to drive more grocery sales to their huge customer base.” The data also reflects Walmart’s ability to drive online sales through its robust curbside pick-up program, the analysts wrote. It’s a convenient shopping option for a huge chunk of the U.S. population that live near one of the superstore’s more than 4,600 retail locations. 

“This is not an Amazon versus Walmart battle, but rather an online grocery versus general merchandise shopping spending comparison,” Juozas Kaziukėnas, founder of Marketplace Pulses, said in an email. “Given that people tend to regularly spend on grocery while general shopping is split between different retailers, it’s not surprising that a Walmart+ member might do most of their grocery shopping on Walmart.”

CIPR’s Levin and Lowitz previously wrote in a separate report that Amazon Prime members spend nearly double than that of customers without an Amazon Prime subscription.

“The figures for Walmart+ member and non-member shopping provide further validation that these membership programs either attract or cultivate the biggest spenders,” wrote Levin and Lowitz. “It’s not clear whether membership drives customers to spend more, or whether big spenders are more inclined to buy a membership and take advantage of its benefits. It is likely some of both.”

Amazon news to know

  • At Amazon’s annual shareholder meeting this week, CEO Andy Jassy spoke about a number of issues, including the FTC’s recent lawsuit and warehouse worker safety.
  • Amazon is reportedly about to roll out an update to Alexa featuring new generative AI features, but will charge a monthly fee for it.
  • After a pullback a few years ago, Amazon is once again investing in and expanding its logistics and distribution networks.

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