Could the Rise of E-Commerce Sales at Walmart and Costco Spell Trouble for Amazon?

E-commerce Industry Trends - E-commerce has become a mainstream shopping method globally, but it still faces limitations compared to in-store experiences [1] - The omnichannel model, combining in-store and online shopping, is gaining traction and benefiting retailers like Walmart and Costco [8] - Amazon dominates the US e-commerce market with over 37% of all sales, maintaining a significant lead [3] Walmart's Performance and Strategy - Walmart's revenue increased 5.5% YoY in Q3 FY2025, driven by a 27% growth in online sales [11] - The company leverages its 4,600 US stores and 10,600 global stores for omnichannel operations, attracting new and affluent customers [6] - Walmart transitioned to a regional fulfillment model to enhance delivery efficiency and mimic the benefits of a physical store network [12] Costco's Performance and Strategy - Costco's e-commerce sales grew 13% YoY in Q4 FY2024, outpacing total sales growth of 7.5% [2] - The company focuses on big and bulky items for e-commerce, as the cost savings on delivery outweigh labor costs, boosting margins [2] Amazon's Performance and Strategy - Amazon reported an 11% YoY sales increase in Q3, reaching $159 billion, with online store sales up 7% and third-party sales up 10% [13][15] - The company continues to invest in logistics and robotics, cutting processing time by up to 25% and reducing peak delivery costs [14] - Amazon lacks a large physical store network, limiting its ability to offer omnichannel options, but remains focused on pure-play e-commerce [5][7] Competitive Landscape - Walmart and Costco are leveraging their physical store assets to drive digital sales, positioning themselves as key competitors to Amazon [8] - Amazon's unmatched e-commerce presence and logistics network make it difficult for competitors to catch up in the near future [10]