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Walmart is Dominating Amazon in Grocery Sales and is Poised for Continued Growth

a person using a computer looking up products on Walmart.com
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Walmart and Amazon are formidable rivals in the retail industry. Amazon leads in eCommerce, while Walmart retains its position as the largest overall retailer in the U.S. However, Walmart is making significant strides in online sales and has notably surpassed Amazon in the crucial category of grocery sales. Walmart is no longer in the shadows. 

By the end of 2024, Walmart is projected to have $18 billion more in online grocery
sales than Amazon. That will give Walmart a growing 26.9% share of the online grocery market versus Amazon’s declining 18.5%. This marks a significant shift in the online grocery landscape, underscoring Walmart’s strategic advancements in its eCommerce capabilities.

But it’s not only about technological capabilities. The competition between Walmart and Amazon in retail is shaped by consumer behavior and brand loyalty, affected by economic conditions and changing shopping trends. Inflationary pressures are a key factor, with 75% of consumers expressing concern over rising prices, leading them to
seek out alternative brands and stores for better bargains
. This shift, beginning during the pandemic, highlights a move away from brand loyalty towards value-driven shopping, an approach Walmart has successfully embraced since the 1960s. 

How Walmart is Winning in Grocery

With the ongoing expansion of eCommerce and the normalization of same-day delivery, businesses need to adopt innovative strategies to optimize their own ecosystems for speed and control, including logistics operations.  

To prospective marketplace sellers, Walmart touts access to the company’s established reputation, 120 million monthly web visitors, and—crucially—reliable and sophisticated fulfillment services. These include built-in logistical solutions from warehousing and inventory management to shipment and returns processing. Through these and other strategic initiatives, Walmart is clearly striving to integrate its established reputation into a next-generation model for continued growth.

Click and collect—a process by which shoppers order groceries online or via the app and then pick them up at a physical location—plays a significant role in the company’s digital strategy. In fact, it may prove crucial, as projections suggest click and collect will make up more than 40% of the total market for digital grocery sales by 2025

Meanwhile, the Walmart+ program seeks to reward loyal shoppers—both online and in-store—with perks like unlimited free deliveries on store orders of at least $35, free shipping on orders from Walmart.com, and a mobile scan-and-pay feature to make in-store shopping less stressful.  

The company is also controlling its own ecosystem and bypassing delivery services like DoorDash by launching a platform of its own: Spark. Powered by gig workers, Spark already accounts for the bulk of Walmart deliveries. It is joined by a more specialized service, GoLocal, which makes deliveries to partnering retailers.

Last mile delivery presents a multifaceted challenge demanding innovative and effective solutions. Walmart GoLocal offers compelling and dependable delivery solutions that have revolutionized the industry, reshaping how businesses address last mile logistics. By harnessing Walmart GoLocal’s adaptable delivery options, advanced technology, and customer-focused approach, businesses can transform their last mile delivery services, establishing new standards of convenience and efficiency for their customers.

Though detailed results are scarce, we know that Walmart Fulfillment Services (WFS)
grew by an exponential 500% in 2021
. That year, WFS fulfilled about a quarter of sales on the marketplace. More recently, the company opened four fulfillment centers, boasting the latest in robotics and the capacity to reach three-fourths of the U.S. population with one- or two-day shipping.  

Selling on Walmart.com

It also seems that the company is going out of its way to make selling on Walmart Marketplace as easy as possible. There are no setup fees, only commissions (ranging between 6% and 15%) deducted from completed sales. Sellers can quickly set up accounts by providing a few supporting documents, telling the company where to send payments, and configuring shipping methods.

Once products are listed, sellers can get them in front of more eyeballs through pay-per-click (PPC) advertising, known as Sponsored Search, that is available through an integrated service called Walmart Connect. There is also a variety of on- and off-Walmart advertising solutions to power your sales efforts. With Walmart Connect, you can increase conversions by reaching ready-to-buy customers. Then, with Search Engine Marketing, you can drive new traffic to your listings, protecting your market share across the web.

The Compass perspective

Walmart’s power as an eCommerce platform is growing too fast to ignore and it’s critical you pay attention. But it’s daunting work, especially if you’re already on numerous other channels since each has its own unique data needs that are constantly evolving. However, there are solutions available to syndicate your content, so you have a cohesive brand story as consumers travel from one retailer to another. Combine this with advertising efforts and you’ll be setting yourself up for success. 

We’ve implemented these tactics on Walmart for a premier coffee brand and have seen a 76% increase in sales in Q1 2024 compared to the same time frame in 2023. We started with updating the already optimized images to align visually with the enhanced images on Amazon for a cohesive brand story. Then we used Sponsored Product campaigns and leaned into more upper funnel placements such as Sponsored Brand banners and Sponsored Brand Video that drove a large portion of the impressions and clicks. Our advertising efforts and additional product page and creative updates led to an increased conversion rate, aiding overall ad performance. 

As Walmart’s grocery sales increase, sales in other categories are likely to follow. If you have a brand with products to sell, you must get in on the growth of Walmart Marketplace now.

WE ARE HERE TO HELP

Compass Marketing can help you discover opportunities for your brand. Our account managers and eCommerce experts use a holistic approach based on data and insights to help guide brands to success. If you would like to learn more, please reach out to info@compassmarketinginc.net! We are always happy to help and would love to learn more about you and your brand.

ABOUT COMPASS MARKETING

We are dedicated to making brands more valuable by combining the very best in insights and experiences with unmatched human interaction. Our team of sales, marketing, and digital experts is dedicated to growing our clients’ market share and building brand equity. We combine art and science—pairing the personal expertise of our team with proprietary technology—to help brands grow quickly and efficiently. As an Amazon Ads partner, we can help brands realize significant growth on one of the world’s largest eCommerce retailers.

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