Walmart’s strength may lie in its numbers, as its purchase rate far beats its closest competition.
In-person shopping beats online in how often consumers shop at the world’s largest two retailers, as consumers turn to Walmart for groceries and Amazon for less frequent but more expensive purchases.
Customers currently choose Arkansas-based Walmart by a ratio of nearly one-third more in terms of frequency, as evidenced in proprietary research for the PYMNTS and Cybersource collaboration, “The 2023 Global Digital Shopping Index: U.S. Edition.”
Data from last fall, part of a more extensive PYMNTS examination of global shopping habits, shows that consumers purchase more often at Walmart than on Amazon. Walmart’s robust physical presence may influence this choice, which affords convenience over eCommerce in everyday transactions. When shoppers run out of everyday staples, they may not want to wait for a replacement via delivery. Additional proprietary research for the index reflects this behavior, noting a similar pattern in how consumers completed their last purchases.
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Just 25% of consumers completed their last purchases online and had the items delivered to their homes. The remaining 75% of transactions involved interaction with a physical store location. These purchases may range from curbside pickup and buy online, pick up in-store, to a purely brick-and-mortar transaction. The instant satisfaction felt from purchasing in-person could drive consumers’ preference and partially explain why consumers purchase more frequently from Walmart. Amazon is still working out its brick-and-mortar strategy.
Part of Walmart’s brick-and-mortar go-to appeal is its strong grocery sales, representing 19% of the retailer’s total transactions. These sales are vital to the megaretailer’s 7.4% slice of overall U.S. consumer retail spend. Walmart maintains its share by reportedly absorbing inflation-influenced price hikes instead of passing increases onto customers to maintain loyalty.
However, while Walmart may have earned more frequent consumer purchases and has more physical locations, it has slipped in total consumer retail spend, as seen in previous proprietary research by PYMNTS.
As the above chart illustrates, Amazon’s share of total consumer retail spending caught up to and eclipsed Walmart’s after a significant rise in 2019. Also, there is evidence it may soon make a play for Walmart’s grocery margins. With its third-party selling model, Amazon has expanded its dry goods reach through its merchant fulfillment services, leveraging the growing consumer demand for eGrocery options, particularly shelf-stable products. Research from PYMNTS’ “Changes in Grocery Shopping Habits and Perception” report found that more shoppers purchase packaged grocery items online than in stores, with 1 in 3 buying these goods exclusively online.
Purchases of health and beauty items, once also purely the purview of in-store shopping, may also move online. As 39% of shoppers are very or extremely likely to increase online purchases of health and beauty products in the future, Amazon could also easily gain market share here and once again surpass Walmart.
Walmart is currently winning the battle of purchase frequency. This victory may not last long as Amazon makes headway in the everyday essentials market. If Amazon does gain a major foothold into this key segment, Walmart may find itself scrambling to catch up to Amazon’s consumer-facing metrics — and next year’s look at global shopping habits may well see Amazon surpassing Walmart in purchase frequency.