Is Amazon Afraid of Walmart and Target?

In April, Amazon attempted to throw a proverbial knockout punch to the competition by announcing that it was “currently working on evolving the Prime shipping program, which has historically been a two-day program, to a one-day shipping program.”

While most analysts called the move a win for Amazon before the “punch” even landed, others (like myself) saw it as strong maneuver that was far from one that put either of its main competitors, Walmart and Target, down for the count.

I also wasn’t particularly excited about this announcement from a consumer’s perspective. Don’t get me wrong – I enjoyed that my membership was getting more perks, but as someone who lives in downtown Austin, Texas, a few blocks from the Whole Foods Market Headquarters, I was already getting free two-hour shipping via Amazon Prime Now. Similarly, many of the items I ordered from Amazon Prime were already arriving in one day.

A few months have passed since Amazon’s announcement, and over 10 million products are now available for one-day Prime delivery. Amazon plans to continue growing that inventory, spending $800 million in Q2 alone to speed up deliveries.

But is Amazon really in a position to “knock out” Walmart and Target, or is the internet giant the one who’s fighting an uphill battle?

Physical Stores Still Matter

You’ve most likely heard the theory that we are in the midst of a “retail apocalypse.” While the term isn’t technically wrong, it doesn’t tell the whole story about the current retail landscape. Yes, retailers “in the boring middle” are facing bankruptcy at an aggressive pace, but other retailers, such as Target and Walmart, have figured out that physical stores play an important role in driving online purchases.

With consumers expecting a frictionless experience at every turn, retailers that create a shopping experience with less hassle, more options, and increased speed have seen success. This includes leveraging physical stores as “pickup stations” for busy consumers and those that would like a chance to review orders for quality before completing a transaction. Physical stores are also being more frequently used as micro-shipping points by both on-demand delivery partners and retailers seeking to shorten the distance of parcels shipped pure-play.


When it comes to using stores to drive online purchases, Walmart’s main advantage over its competitors is its massive physical footprint: Over 90% of Americans live within 10 miles of a Walmart store, which makes fulfillment from stores a breeze compared to other retailers.

Most Walmart locations also sport a warehouse-like design with a rectangular shape and high ceilings, which makes it easy to transform a store into a micro-shipping point or to introduce more advanced same-day shipping innovations like robotics and autonomous delivery.

Prior to Amazon’s announcement regarding one-day Prime shipping, the fastest delivery option Walmart offered outside of on-demand grocery delivery was two-day shipping. The company quickly went on the defensive, however, and released this tweet in response to Amazon:

A few weeks later, Walmart officially announced that it would be adding free NextDay delivery on a wide range of general merchandise from, without a membership fee. The program will roll out gradually, available first to customers in Phoenix, Las Vegas and Southern California, with a plan to reach approximately 75% of the U.S. population this year.

The retailer is also doubling-down on its quest for online grocery dominance. It’s on track to offer Grocery Pickup from 3,100 stores and same-day Grocery Delivery from 1,600 stores by year-end, providing coverage to approximately 80% and 50% of the U.S. population, respectively. Its efforts appear to be paying off; a recent survey found that Walmart has edged out Amazon as the retailer where most respondents made their last digital grocery purchase. Additionally, the company’s online-originated sales grew 40% in 2018.


Target has seen massive success with utilizing its store footprint to drive online sales. According to its First Quarter 2019 Earnings Report, Target’s Q1 comparable digital sales grew 42%, on top of 28% last year. Same-day fulfillment services (Order Pick Up, Drive Up and Shipt) drove well over half of this growth. Overall, using stores to fulfill digital orders accounted for 80% of Target’s digital volume “while driving down costs and growing our most profitable digital sales.”

It was actually Target that threw the proverbial “first punch” at Amazon when it started providing one-day shipping in May of last year. The Target Restock program allows customers to choose from an expanded assortment of 35,000 popular essentials in categories such as cleaning supplies, groceries, beauty, pet and more. The service is free for all Target REDcard purchases and $2.99 for all other orders.

Through its Restock program, Target has shown that it is able to offer free next-day delivery without the vast distribution system of its competitors. It seems to be one of the most advanced retailers in terms of using its stores as micro-shipping points, as all Restock and many standard online orders are fulfilled directly from store shelves. This method helps Target offer popular items that Amazon has started to consider “CRaP” while also being able to forego spending on new warehouses.

In June, Target also announced that it was expanding its same-day delivery options via Shipt, providing shoppers in 47 states a catalog of 65,000 items that can be delivered within an hour for a flat fee of $9.99 per order. Same-day delivery was previously only available from Target by becoming a Shipt member, which costs $99 per year.

The acquisition of Shipt is one of Target’s major advantages over Walmart and Amazon, who have instead decided to partner with various delivery service providers while building out their own capabilities. Shipt still offers delivery from other retailers, including H-E-B, Meijer and CVS, which is driving the scale and relevance of the platform while also providing interesting cross-retail merchandising options.


Currently, Amazon does not have the same physical retail infrastructure as Walmart and Target. Because of that, it has had to continuously push its home delivery options. In early June, Amazon fulfilled on its April promise, announcing that its one-day Prime delivery program is now available on more than 10 million products and counting.

That being said, Amazon is not delusional about the power of physical retail. It’s one of the main reasons it acquired Whole Foods in 2017. It has also been ambitious in its desire to open up 3,000 cashier-less Amazon Go locations by 2021; however, that model has recently received pushback from local and state legislators who believe “cash-less” retail could discriminate against some Americans.

While Amazon understands its disadvantages, it always seems to be on the offensive. Recently it has been increasing its investment in last-mile logistics by offering employees a $10,000 bonus and the equivalent of three months’ pay at their existing salary to join its Delivery Service Partner program. It also recently unveiled its new delivery drone, which will deliver items within 30 minutes. The fully electric drones can fly up to 15 miles and deliver packages under five pounds. The starting date for this shipping feature is not formally set, but Jeff Bezos has said that 86% of Amazon’s orders are under the weight limit and would therefore be eligible for this service.


The battle between Amazon, Walmart and Target is shaping up to be one for the ages. Those brands that have already declared Amazon the winner should take a deeper look at how Walmart and Target have been able to “turn the tables” by leveraging their existing strengths. As consumers evolve in their expectations of frictionless shopping experiences, the retailer that not only meets those expectations but anticipates new ones will emerge as the winner.

For brands, this means looking beyond Amazon to Walmart, Target and other retailers. To succeed at e-commerce, you need a unique product content strategy designed to increase search visibility and conversion on each of your online retail partners.

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