Why Amazon’s Move Into Rural America Can’t Cut Walmart’s Retail Lead
Key Takeaways
Amazon is expanding same/next-day delivery in rural communities, challenging Walmart on its home turf. However, Walmart's omnichannel advantage will keep it in the lead.
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6 min read
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investment
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June 27, 2025
12:22 PM
Forbes
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SANTA FE, NEW MEXICO - APRIL 5, 2020: An Amazon Prime package dered to a mailbox by a U
More Postal Service mailman in Santa Fe, New Mexico. (Photo by Robert Alexander/Getty Images)Getty Images Amazon just announced that it is expanding same-day and next-day deries 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 dery so far this year compared with same period last year
Touting speedier dery 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 dery network by the end of next year
It will transform existing rural dery 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 der food, general merchandise, and prescriptions to 93% of the U
In less than three hours
This reach has powered its e-commerce to over 20% growth annually for the past two years
Battle For Market While Amazon is the undisputed leader in e-commerce, with an estimated 42% market compared to Walmart’s 9. 4% in 2024, Walmart’s grew by 1. 2% over the previous year, outpacing Amazon’s 0. 8% gain, according to BofA Global Re
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. , 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
MORE FOR YOU Building Omnichannel Bridges Walmart’s omnichannel customers shop three-times more often and spend 13% more per order
And the new Walton Goggins “Walmart. ” ad campaign is sure to attract more customers to engage online
ForbesWalmart Unveils Bold Ad Campaign To Its Image Starring Walton GogginsBy Pamela N
Danziger Its 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 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 dery from the local store on orders of $35 or more, with deries scheduled to meet the customer’s timeline
However, there is no minimum on dery 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 vide ing 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 ed 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%
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 int – 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 d that half of its GMV growth in general merchandise has been from its marketplace
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 nounced in grocery
Overall 60% of its e-commerce gross merchandise value is credited to grocery, whereas grocery accounts for only 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,” d CFRA investment analyst Arun Sundaram with Investor’s 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 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.
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