The Year in Amazon vs Walmart, and a Look Into 2025

As 2024 comes to a close, the retail sector remains defined by the intense rivalry between Amazon and Walmart. Over the course of the year, these industry titans fiercely competed for consumer loyalty, market dominance and innovation leadership. Here’s a recap of the major moments in this ongoing battle, as covered by PYMNTS.

Market Share and Consumer Spending

The year kicked off with Amazon strengthening its lead over Walmart in consumer spending. By the end of 2023, Amazon accounted for 10% of all U.S. retail sales and 4.4% of total consumer spending, while Walmart captured 7.3% of U.S. consumer retail spending. This momentum carried into 2024, with Amazon securing 3.5% of consumer spending in the second quarter, compared to Walmart’s 2.9%.

Digital Advertising and Retail Media

Both companies ramped up their investments in digital advertising. Walmart expanded its retail media network, Walmart Connect, by adding display ads to Sam’s Club’s Scan & Go feature and exploring new opportunities for non-endemic brands to advertise on in-store screens. Meanwhile, Amazon enhanced the appeal of its advertising services, including offering lower prices for Prime Video ad placements compared to Netflix.

Loyalty Programs and Membership Perks

The battle for paid memberships continued to heat up in 2024. By midyear, Amazon Prime led with a 67% penetration rate among U.S. consumers, while Walmart+ had grown to capture 30% of the market. To fuel further growth and deepen engagement, both companies introduced new benefits. Walmart teamed up with Burger King to offer dining perks for Walmart+ members, while Amazon expanded its Grubhub partnership, offering Prime members added food delivery advantages.

Sales Events and Consumer Participation

Prime Day and Walmart+ Week remained key battlegrounds in the retail rivalry. Amazon’s Prime Day set new records, with sales jumping 11% to surpass $14 billion. Although Walmart+ Week had lower overall participation, it experienced a massive 71% increase from the previous year. Interestingly, Walmart+ Week shoppers outspent their Amazon counterparts, averaging $473 per person compared to $326 for Prime Day shoppers.

Innovation in Physical Retail

Both companies advanced their efforts to digitize the in-store experience. Walmart revealed plans to implement digital shelf labels in 2,300 stores by 2026, enhancing operational efficiency and customer experience. Meanwhile, Amazon refined its Just Walk Out technology and smart shopping carts, while also licensing these innovations to other retailers.

Expansion Into New Categories

The rivalry between Amazon and Walmart also extended into new markets. Amazon ventured into the auto sales sector with its Amazon Autos platform, while Walmart forged third-party partnerships to strengthen its position in the same space.

Both companies also ramped up their quick commerce initiatives, with Amazon testing 15-minute grocery deliveries in India to compete directly with Walmart-backed Flipkart. Additionally, Amazon’s push into rapid delivery services reflects its broader strategy to challenge Walmart’s dominance in the eCommerce and delivery sectors.

Discounting Strategies

Price wars between Amazon and Walmart gathered steam as both retailers intensified their discounting strategies to appeal to budget-conscious consumers. Amazon was reportedly set to introduce a new section showcasing low-cost items shipped from China, while Walmart unveiled its “largest savings event ever” in July, aiming to capture more price-sensitive shoppers.

Looking Ahead

As 2025 approaches, the Amazon-Walmart rivalry shows no signs of slowing down. Both companies remain at the forefront of innovation, expanding their offerings with new technologies like Amazon’s MK30 delivery drone and Walmart’s gamified marketplace, Walmart Realm. These initiatives highlight their drive to redefine the retail experience and stay ahead of the competition.

Neil Saunders, managing director, retail, at research firm GlobalData, told PYMNTS Walmart and Amazon were both “retail winners” this year.

“They are two of the main powerhouses of U.S. retail and are driving good growth,” he explained. “The mainstay of Walmart’s success is in grocery which, interestingly, is an area where Amazon continues to struggle. Amazon’s success is mostly in general merchandise and making their delivery speed faster and more convenient. Both retailers are seeing growth among more price-sensitive consumers who are seeking value. Walmart and Amazon are well positioned for further success in 2025.”

Meanwhile, Greg Zakowicz, senior eCommerce expert at Omnisend, agreed Walmart and Amazon were both winners in 2024.

“Walmart took a long-term approach to building up its business to appeal to higher-income shoppers without alienating its core base, and the combination of economic challenges and improved offerings made 2024 a pivotal and successful year for the retailer,” Zakowicz explained to PYMNTS. “It managed to increase its share of higher-income households and reshape its brand perception through its product offerings and logistics infrastructure — something Amazon is best known for.”

Memberships are key to customer loyalty, he added, and “Prime has been the dominant membership and I don’t see that changing in 2025, but Walmart has made substantial progress. Its perks, such as a Paramount+ subscription and same-day grocery delivery, make it an attractive offering that effectively counters what Amazon offers, especially as consumers look for value. I think Walmart has done a good job of creating perks useful and appealing for customers. This is their Trojan horse into becoming a first-choice retailer for goods once commonly associated with Amazon.”

Walmart has an advantage over Amazon in groceries, particularly with membership services, Zakowicz added. Same-day, free delivery and expanded product lines, like organics, make Walmart appealing to all income levels.

“I’m most curious to see how Walmart’s renewal rates are in 2025, especially for those who joined during their $49 promotion,” he noted. “This will be Walmart’s indication of how well they are creating value for their members and can impact their product strategy moving forward. Poor renewal rates could lead to choosing to reduce certain product lines, such as organics, which could lead to further defections.”

In 2025, Zakowicz said key areas to watch include:

Walmart’s membership renewal rates.

Amazon’s increased ads in Prime Video, and whether they impact renewals or drive paid ad-free upgrades.

The speed at which both companies adapt to new trends, like Amazon’s fast-follow of Chinese sellers with Amazon Haul versus Walmart’s more calculated approach.

The impact of tariffs on each company, and which one is better insulated, will be crucial to monitor.