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Forbes
a day ago
- Business
- Forbes
Why Amazon's Move Into Rural America Can't Cut Walmart's Retail Lead
SANTA FE, NEW MEXICO - APRIL 5, 2020: An Amazon Prime package delivered to a mailbox by a U.S. ... More Postal Service mailman in Santa Fe, New Mexico. (Photo by) Amazon just announced that it is expanding same-day and next-day deliveries to customers in more than 4,000 smaller cities, towns and rural communities by the end of 2025. This comes on the heels of a 30% increase in same or next-day delivery so far this year compared with same period last year. Touting speedier delivery to customers in North Padre Island, TX, Asbury, IA, Lewes, DE, Sharpton, MD, Fort Seneca, OH and other locations further afield, Amazon will invest over $4 billion to triple the size of its delivery network by the end of next year. It will transform existing rural delivery stations into hybrid hubs that will store location-specific inventory. This move will also create an average of 170 local jobs per hub, plus additional driving opportunities for independent contractors. In an unexpected twist, Amazon is copying Walmart, instead of the other way around. One of Walmart's competitive strengths is its foothold in rural America. With over 90% of Americans living within ten miles of a Walmart store, the company is now able to deliver food, general merchandise, and prescriptions to 93% of the U.S. in less than three hours. This reach has powered its e-commerce business to over 20% growth annually for the past two years. Battle For Market Share While Amazon is the undisputed leader in e-commerce, with an estimated 42% market share compared to Walmart's 9.4% in 2024, Walmart's share grew by 1.2% over the previous year, outpacing Amazon's 0.8% gain, according to BofA Global Research. And with growth in e-commerce slowing – advancing over 10% in 2021 and 2022, then subsiding to 8.1% in 2024 and 6.4% through May this year – the competition between the two giants is intensifying. Walmart has been moving aggressively to play catch-up online, but with over 4,600 stores in the U.S., it has an advantage that Amazon can't begin to match. Thanks to its physical connection with customers, it has much more room to maneuver. In effect, Walmart is playing chess and Amazon is playing checkers. Building Omnichannel Bridges Walmart's omnichannel customers shop three-times more often and spend 13% more per order. And the new Walton Goggins 'Walmart. Who Knew?' ad campaign is sure to attract more customers to engage online. Its latest iteration features Goggins in cowboy gear talking to his horse in a barn right out of Yellowstone, and it takes a not-so-subtle jab at Amazon. 'They don't know the first thing about you or Walmart Plus.' Walmart+ is its answer to Amazon Prime. For $98 per year, Walmart+ members get free shipping on all Walmart orders, as well as free direct delivery from the local store on orders of $35 or more, with deliveries scheduled to meet the customer's timeline. However, there is no minimum on delivery for pharmacy orders. Walmart+ stands behind members with free online pet services through Pawp and free flat tire repair and road hazard warranty for customers who purchase and install a set of tires at Walmart. Members also get Walmart cash rebates on travel services. Other benefits include gasoline discounts at over 13,000 stations nationwide, including Exxon, Mobil and Walmart, and a 25% discount at Burger King and a free Whopper with any purchase every three months. While Walmart+ can't match Amazon Prime's entertainment offerings, it does provide streaming services from Paramount+ and ad-free content with Pluto TV. Membership Shortfall Amazon Prime is way out in front when it comes to memberships, with an estimated 85.7 members and according to Capital One, memberships grew from 76.6 million in 2022 even after Prime memberships went up to $139 per year. Walmart+ has a long way to go to catch up. Morgan Stanley estimates its membership between 17.2 million to 24.6 million based on results of a consumer survey. The company does not release membership figures, though the company has commented that memberships are growing at high double-digit rates. However, Amazon has been pushing Prime far longer. It launched in 2005 and Walmart+ a mere five years ago. Best Of Both World's Increasingly, consumers are opting for both membership plans. Pyments found nearly 25% of consumers have memberships in both plans as of April 2025 with dual memberships highest among Millennials at 37%. Overall, about 30% of U.S. consumers have yet to sign on to either service, based upon a survey same of 2,000 adults. The highest non-participation rate is among Baby Boomers at 42%. These nones are the prime battleground – pun intended – for both competitors. Interestingly, Pyments found brand loyalty strongest among Walmart+ members. Some 11% of Amazon Prime-only members made their last retail purchase from Walmart, while no Walmart+ members returned the favor. While Amazon takes the lead in general merchandise purchases, accounting for some 73% of gross merchandise value, Walmart is catching up. Speaking at a recent Oppenheimer investor conference, CFO John David Rainey shared that about half of its GMV growth in general merchandise has been from its marketplace business. Overall Walmart's marketplace revenues grew 34% in the last fiscal year and Marketplace Pulse estimates there are 150,000 sellers on the platform. Dominating Grocery Walmart's dominance is most pronounced in grocery. Overall 60% of its e-commerce gross merchandise value is credited to grocery, whereas grocery accounts for only about 5% of Amazon's GMV. In Pyment's survey, only 1% of consumers surveyed who purchased groceries within the last 30 days, made their last purchase with Amazon, compared to 30% who bought from Walmart. And the rate of most recent grocery purchases among Walmart+ members reached nearly 60% and among nones, some 24% purchased groceries from Walmart. Amazon has yet to crack the code in grocery, not for lack of trying with its new grocery subscription offering and acquisition of Whole Foods. It's an advantage that Walmart will continue to capitalize on. 'If you can attract a customer to come into your website or your store to buy groceries, it's so much easier to sell them other things, whether a T-shirt, furniture, whatever it is,' shared CFRA investment analyst Arun Sundaram with Investor's Business Daily. That's why Walmart is going to stay in the lead against Amazon. Even while Amazon dominates in e-commerce, that channel accounts for only about 30% of retail sales and online sales growth is slowing. Walmart operates where consumers still overwhelmingly shop – in physical stores. And it offers digital experiences that are catching up to Amazon's and are even better for online grocery customers far and wide. Walmart is truly an omnichannel retailer and Amazon can hardly say the same.
Daily Mail
2 days ago
- Business
- Daily Mail
Amazon announces major prime membership change
Amazon is planning to expand its same-day and next-day delivery to over 4,000 small cities, towns, and rural communities in the US. Thousands of its 200+ million Prime members will have the pleasure of having this benefit by the end of the year. 'The money saving is important, but for many rural customers, the more critical dynamic is the time saved by using Amazon. The expanded choice that Amazon offers is also very appealing to shoppers who are miles away from big malls and stores,' GlobalData retail expert Neil Saunders told 'For Amazon, rural gains are an important part of driving Prime penetration. And the business is confident it can service this profitably by adapting existing rural delivery stations into hybrid hubs which store inventory Amazon's algorithms know will be popular in the area.' Shoppers interested in trying out the platform can do so for $14.99 a month or $139 a year. The project announcement comes after Amazon made the decision to expand its Prime Day sales event to four days from two. The company had already been the topic of conversation during the rise of inflation and fears of recession after CEO Andy Jassy warned shoppers tariffs potentially rising prices. While Amazon's net sales skyrocketed to $155.7 billion this quarter, the company has been slammed by its employees and Prime members. Shoppers claimed they would cancel their memberships last year after finding out the company was axing its Amazon Today service. Prior to its removal, it was a popular perk that provided same-day delivery from select stores in the customers' neighborhoods. Members also canceled accounts after finding out its streaming service started rolling out more advertisements across its TV shows and films. The company didn't stop there with its prime perk change-ups and infuriated customers even more by raising the price of its Amazon Music Unlimited ad-free subscription program. Besides its member benefit terminations, fans have begun turning their backs on Amazon after Jassy issued a warning of brutal workforce cuts. It is unclear when the layoffs will begin and how many jobs will be axed, but Jassy revealed the cuts were the result of the company's increase in artificial intelligence. The company is keeping itself busy by preparing for Prime Day, recently warning its members about increases in cyber scams It's also exploring the idea of creating its own currency, an idea that could save the company and retailers like Walmart and Target billions of dollars. Amazon is expecting to make between $159 billion and $164 billion during its second quarter, along with a $13 billion to $17.5 billion operating income. The company will release its second quarter results on July 31 after the market closes.
Daily Mail
2 days ago
- Business
- Daily Mail
Amazon making major change to Prime that will affect the whole of the US
Amazon is planning to expand its same-day and next-day delivery to over 4,000 small cities, towns, and rural communities in the US. Thousands of its 200+ million Prime members will have the pleasure of having this benefit by the end of the year. The plan comes after the company invested over $4 billion to triple the size of its delivery network by 2026. Amazon is expanding the network to help customers who 'live farther from brick-and-mortar retailers, have fewer product and brand choices, and face limited delivery options when shopping online.' 'The money saving is important, but for many rural customers, the more critical dynamic is the time saved by using Amazon. The expanded choice that Amazon offers is also very appealing to shoppers who are miles away from big malls and stores,' GlobalData retail expert Neil Saunders told 'For Amazon, rural gains are an important part of driving Prime penetration. And the business is confident it can service this profitably by adapting existing rural delivery stations into hybrid hubs which store inventory Amazon's algorithms know will be popular in the area.' Shoppers interested in trying out the platform can do so for $14.99 a month or $139 a year. The project announcement comes after Amazon made the decision to expand its Prime Day sales event to four days from two. Prime Membership Prime provides a range of benefits on top of next and same day delivery and is available on a 30 day free trial. After the trial, membership costs $14.99 a month or $139 a year. $139/year Shop The company had already been the topic of conversation during the rise of inflation and fears of recession after CEO Andy Jassy warned shoppers tariffs potentially rising prices. While Amazon's net sales skyrocketed to $155.7 billion this quarter, the company has been slammed by its employees and Prime members. Shoppers claimed they would cancel their memberships last year after finding out the company was axing its Amazon Today service. Prior to its removal, it was a popular perk that provided same-day delivery from select stores in the customers' neighborhoods. Members also canceled accounts after finding out its streaming service started rolling out more advertisements across its TV shows and films. The company didn't stop there with its prime perk change-ups and infuriated customers even more by raising the price of its Amazon Music Unlimited ad-free subscription program. Besides its member benefit terminations, fans have begun turning their backs on Amazon after Jassy issued a warning of brutal workforce cuts. It is unclear when the layoffs will begin and how many jobs will be axed, but Jassy revealed the cuts were the result of the company's increase in artificial intelligence. There are over 200 million active Amazon Prime members worldwide The company is keeping itself busy by preparing for Prime Day, recently warning its members about increases in cyber scams. It's also exploring the idea of creating its own currency, an idea that could save the company and retailers like Walmart and Target billions of dollars. Amazon is expecting to make between $159 billion and $164 billion during its second quarter, along with a $13 billion to $17.5 billion operating income. The company will release its second quarter results on July 31 after the market closes.
The Independent
4 days ago
- Business
- The Independent
Amazon to expand Prime delivery services in smaller cities and rural areas
Amazon has pledged to invest billions of dollars to expand its Prime delivery services to millions more customers across the U.S. The e-commerce giant announced plans to bring same-day and next-day delivery to more than 4,000 smaller towns, cities, and rural areas by the end of the year, from Asbury in Iowa to North Padre Island in Texas. The company said Tuesday it had already begun expanding its Prime delivery offering to more than 1,000 less densely populated portions of the U.S. For many Amazon customers, though, the expansion will arrive too late for Prime Day, which begins July 8. Amazon previously announced in April that it would invest more than $4 billion through the end of 2026, following its recognition of growing demand for faster delivery in more rural locations. The expansion drive is expected to create thousands of new jobs, with an estimated 170 positions at each new delivery station, as well as additional driving opportunities. The company also announced that it is expanding its selection of everyday essentials – its most extensive selection of groceries and household goods – eligible for same-day delivery. The number of items delivered the same day or the next day in the U.S. has seen a 30 percent increase compared with the same period last year, the statement said. In 2024, the company said it delivered items at its fastest speeds since launching its Prime delivery service in 2005. Amazon delivered a record 9 billion-plus items the same or next day around the world last year. 'Everybody loves fast delivery,' CEO of Worldwide Amazon Stores Doug Herrington said. 'So, whether you live in Monmouth, Iowa or in downtown Los Angeles, now you're going to have the same fantastic Amazon customer experience: the ability to get the wide variety of items you need to keep your household running every day, delivered the same or next day.'
The Verge
5 days ago
- Business
- The Verge
Amazon bringing same-day delivery to ‘millions' of rural customers
Amazon announced its intention to bring same-day and next-day delivery to 'tens of millions' of people who live in live in smaller towns by the end of 2026. Speedier deliveries will be available to residents 'in more than 4,000 smaller cities, towns, and rural communities,' the company said in a press release Tuesday. Items categorized as 'everyday essentials,' including groceries, beauty products, household goods, or pet food, will now be available to small town or rural customers for same-day or next-day delivery. If they are Prime subscribers (currently $14.99 a month or $139 annually), they get unlimited free same-day delivery when spending over $25 at checkout. Items categorized as 'everyday essentials' will now be available to small town or rural customers for same-day or next-day delivery. Amazon has already expanded its speedy delivery options to customers in over 1,000 small or rural communities, and people are buying these essential items at a higher rate than before. Amazon says over 90 percent of the top 50 items purchased for same-day delivery are 'everyday essentials items.' The company was able to accomplish this massive expansion by spending a lot of money — $4 billion, according to Amazon — on building new facilities and hiring new delivery drivers. Its also transforming existing delivery hubs in these smaller communities into hybrid facilities where Amazon packages can be prepped for final delivery. And the company is using machine learning to better predict what items each communities buys in large quantities, so it can make sure to have those items in stock for faster delivery. This includes 'the most-popular and frequently purchased items like wireless headphones, coffee pods, crackers, paper towels, and diapers, and products curated to fit local preferences like wild bird food in Dubuque, Iowa, travel backpacks in Findlay, Ohio, and after sun body butter in Sharptown, Maryland,' Amazon says. While many residents of small towns may delight in faster Amazon deliveries, local business owners may have a different reaction. Amazon has long been a threat to local Mom-and-Pop shops that struggle to compete with the convenience of online shopping, while also laboring under high rents and other costs of doing business. Amazon argues that it provides opportunities for small businesses to reach new customers, but critics claim that the company exploits its dominance in the economy to squeeze out local entrepreneurs.
