Amazon vs Walmart Holiday Battle May Come Down to Loyalty Programs

As the holiday shopping season approaches, the competition between retail giants Walmart and Amazon intensifies, shaping the eCommerce landscape. Both companies have established themselves as formidable players, offering extensive product assortments, competitive pricing and efficient logistics networks that ensure quick delivery. This rivalry is particularly pronounced in categories like electronics and household essentials, where consumers often compare prices and availability across both platforms before making a purchase decision.

Amazon snared 24% of new retail growth in the third quarter, while Walmart secured 12.2%. What does this mean for the holiday season?

In an interview with PYMNTS, Greg Zakowicz, senior eCommerce expert at Omnisend, said from an eCommerce standpoint, “Walmart and Amazon are closer to each other than ever. Both companies offer a wide assortment of products, low prices and robust logistics networks that deliver orders quickly. For example, if someone is shopping for a TV, they’ll likely search both stores for the item and may find similar or exact products and prices. At that point, it might come down to delivery time, return policies, and the overall reputation of the company and its product quality.”

Walmart has an advantage over Amazon in terms of last-minute necessities, tactile experience, and groceries, Zakowicz said.

“Because of their brick-and-mortar presence and same-day grocery deliveries, filling those last-minute or household essentials needs makes Walmart an obvious choice for shoppers,” he said. “For those looking for a tactile experience, whether looking at the quality of a shower caddy or television picture, the in-store experience is readily available.”

In contrast, Amazon’s vast marketplace provides a distinct advantage with its expansive product range, offering shoppers a wealth of options to explore, particularly when they’re uncertain about the exact item they need, Zakowicz said.

“The size and consistency of Amazon’s marketplace offer it a competitive edge over Walmart,” he said. “This can be very useful for shoppers who know the type of product they want but are not sure of the exact product. The side selection gives shoppers a variety of products and price points to choose from. From a product discovery standpoint, this helps create a more enjoyable user experience.”

In terms of loyalty, “If someone is a member of either loyalty program, they’ll likely turn to that store as a first option,” Zakowicz said. “For those who are members of both, it likely comes down to the product and needs of the individual. For small consumer electronics, because of the selection, Amazon may be the go-to choice. For last-minute needs or commodity products found on both sites, Walmart may be the preferred location due to its local presence.”

Zakowicz expects both Walmart and Amazon to be “significant winners” this holiday season, “especially compared to competitors like Target. Both retailers have established their value propositions and reputations, and as consumers continue to look for value among all else, these two are the lead dogs.”

Here’s a look at other notable developments from Amazon and Walmart in the past week:

Amazon Highlights

Amazon to Keep Fulfillment and Referral Fees Stable in 2025: Amazon announced it won’t raise its U.S. merchant fulfillment and referral fees in 2025, despite inflationary pressures and increased employee pay. The eCommerce giant attributed this decision to cost reductions achieved through innovation and greater efficiency. Starting Jan. 15, 2025, the company will reduce inbound placement service fees for large, bulky items and waive them for qualifying new products shipped between Dec. 1 and March 31. Amazon also plans to enhance its fee-related tools and offer greater incentives for sellers adding new products to its platform.

Amazon Launches Beta of Generative AI-powered Shopping Assistant in India: Amazon launched a beta version of Rufus, a generative AI-powered shopping assistant on the Amazon.in mobile app, designed to help customers with product discovery, comparisons, and recommendations. Trained on Amazon’s product catalog and external sources, Rufus aims to enhance the shopping experience by answering questions and facilitating decision-making. The assistant will gradually roll out to more users in India in the coming weeks. This move builds on Amazon’s long-standing use of AI, including personalized recommendations, fulfillment optimizations, and Alexa’s capabilities, positioning generative AI as a key element in shaping future customer experiences.

Walmart Highlights

2025 AI Trends Outlook:  As artificial intelligence moves from novelty to practical use, Walmart published a 2025 AI Trends Outlook. According to the company post, companies in 2025 will focus on AI applications that deliver clear financial results, such as improving efficiency and reducing costs. Investment will increase in industry-specific AI models, with regulators likely setting standards for sectors like healthcare, finance, and law. Growing concerns about AI-generated misinformation will prompt calls for content labeling and better public awareness. GenAI will be integrated into existing tools to enhance functions like customer service, HR, and marketing.

Wealthy Shoppers Turn to Walmart for Groceries: Walmart’s recent earnings report revealed that 75% of its market share gains came from households earning more than $100,000, signaling strong demand among wealthier shoppers. Despite its traditionally budget-friendly image, Walmart has successfully attracted high-income consumers, who contributed to the retailer’s 5.3% increase in same-store sales. CEO Doug McMillon said these shoppers are engaging with both grocery and general merchandise categories, underscoring Walmart’s increasing appeal across income levels.