Amazon to Overtake Walmart by 2022, Says Packaged Facts Report

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Amazon is set to become the largest retail market force in the United States. While Walmart is currently the largest retailer, its top ranking may fall in 2022, according to market research firm Packaged Facts, based on the expectation that Amazon sales will continue to grow at a much faster rate than Walmart’s.

Sales for Seattle, Washington-headquartered Amazon rose 24% to $70 billion for the third quarter that ended on September 30, 2019. Operating cash flow increased 33% to $35.3 billion for the trailing twelve months, compared with $26.6 billion for the trailing twelve months ended September 30, 2018. Free cash flow increased to $23.5 billion, compared with $15.4 billion for the trailing twelve months ended September 30, 2018.

Packaged Facts makes the prediction that Amazon will surpass Walmart in a new report, Amazon Strategies and the Amazon Shopper, 2nd Edition, which analyzes the e-commerce giant’s activities in grocery, pet products, and financial services.

“Amazon has already had an enormous impact on e-commerce sales, benefitting from its creation of an endless online aisle with products at competitive prices. We estimate that Amazon’s gross merchandise sales in the United States will comprise 43% of the nation’s e-commerce sales in 2019, up from 28% in 2015. By 2022, we forecast that Amazon will contribute almost half of US e-commerce sales,” said David Sprinkle, Packaged Facts’ research director.

Despite Amazon’s continued growth, Walmart does have advantages Amazon presently cannot match, even when accounting for Amazon’s innovative incorporation of the Whole Foods supermarket chain in 2017 and its partnership with department store retail chain Kohl’s. Most notably, Walmart’s in-store services strongly differentiate it from online competitors such as Amazon, which cannot provide services, as well as from its brick-and-mortar competitors, many of which do not offer the same breadth of offerings or cannot match Walmart’s pricing. These services therefore not only produce revenue but also significantly drive traffic, which is even more vital at a time when brick-and-mortar retailers of all shapes and sizes seek to revitalize in-store traffic.

Packaged Facts survey data reveals that more than 20% of Walmart purchasers use in-store services (including purchasing/using a range of financial services, on-site pharmacy, and optical and photo processing). In addition, Walmart is the click-and-collect king. Among survey respondent click-and-collectors, 43% identified Walmart as the pick up location for their last click-and-collect order, three times the percentage of those who cited runner-up Target.