Amazon’s size, speed and tech savvy made it almost unassailable in U.S. retail for years — the company didn’t just play the e-commerce game well, it defined the terms of engagement with the consumer.
But Amazon isn’t the only one with some weight to throw around.
Walmart, the brick-and-mortar retail leader, has been asserting itself aggressively and plans to continue growing its market share in 2025 by expanding its consumer base, building out its online marketplace and more.
According to Morgan Stanley, Amazon took 24 cents out of every dollar of growth in the U.S. retail sector during the third quarter. While Walmart can’t quite match that, taking 12.2 cents out of every dollar of growth, the retailer is working hard to catch up.
Doug McMillon, president and chief executive officer, told investors at a Morgan Stanley conference last month that “the inside of the company has changed.”
“We say these days, we’re a people-led, tech-powered omnichannel retailer dedicated to helping people save money and live better,” McMillon said.
It’s a simple vision but one that’s taken years of change — from getting out of international markets where Walmart struggled to really embracing an e-commerce mindset to standardizing the approach globally.
“One of the things that’s happened over the last few years is that our businesses across the world have started to look more the same from a strategic point of view,” McMillon said. “That to-do list, if I can describe it that way, includes running great brick-and-mortar stores, building a first-party e-commerce business, building a third-party marketplace, building fulfillment services membership in a sophisticated way, data monetization. So the to-do list is the same now” at Walmart divisions around the world.
The changes have all taken money — and a little trust.
“I’m really grateful to our board and to the Walton family for letting us invest,” McMillon said. “And they let us do a lot at once, which took some faith. We invested billions in price. We invested billions in wages. We invest a lot of money in e-commerce and technology. It was a bet on the future that this big team of associates could figure out how to get the company positioned for the next generation of retail. And they let us have enough time to figure it out. And now you can see a business model that looks like it’s going to work, and we’ve got to fuel it.”
The third-party online marketplace is a space to watch in 2025 as it has drawn higher-end fashion brands to Walmart.
The company might just be getting the kinks out.
“If you look at the marketplace, it’s still subscale to what it should be,” McMillon said. “There’s a reason for it. It’s understandable in that, our seller experience wasn’t that good. We started inviting sellers to come together once a year and we’ve now done this a couple of different times and they tell us very directly, ‘You need to make it easier to become a seller. You need to make it easier for us to onboard items. You need to make it easier for us to get data related to our advertising. If you build these tech products, we’ll bring more volume, we’ll bring more products, we’ll get more aggressive on pricing to drive growth.’”
McMillon said the marketplace experience “has just got to keep getting better.”
The CEO said it’s still “super early” for the marketplace business, around the “second inning.”
And that’s just part of the puzzle at Walmart, which is also remodeling stores, sprucing up its apparel offering and more.
“Lee Scott — Lee was our CEO for a number of years — he and I used to laugh about the fact that the company could seemingly do one thing really well,” McMillon said. “But you ask us to do two things and we struggle. And forget doing three things at once.
“But now we’re scaling an ad business, building membership,” he said. “We’re doing multiple things at a time because of the talent that we’ve been able to attract and promote and that’s very exciting.”
A multitasking Walmart could become an even more potent force in the year ahead.
