Walmart's comeback isn't about becoming the second Amazon

If two years ago someone told you that Walmart’s stock price growth would outperform Amazon, you probably would have thought it was a joke.

Because in many people’s eyes, Amazon represents the future, while Walmart belongs to the past. But the market’s answer over the past two years has been very straightforward: Walmart’s stock price nearly doubled in two years, not only pushing its market cap into the trillion-dollar club but also making the market willingly assign it the valuation of a tech growth stock.

So what happened? Has Walmart finally figured out e-commerce?

In fact, they took a different path—rather than competing head-to-head with Amazon in pure e-commerce, they integrated online and offline channels, with online responsible for driving orders and stores responsible for faster, cheaper delivery. Store efficiency improved, and the online experience naturally got better as well.

In this way, Walmart maximized the potential of its 11,000 stores worldwide, turning them into a secret weapon against pure e-commerce.

Avoid direct confrontation with e-commerce; turn stores into an advantage

First, to be clear, Walmart is not abandoning e-commerce; it simply no longer treats “doing online” as the goal. It cares more about how online and offline work together to make shopping smoother and pickup faster.

Many traditional retailers were anxious about “moving offline to online” back in the day. But Walmart sees very clearly: on the pure e-commerce track, competing directly with Amazon is not advantageous.

So, it reversed the approach—using stores as nodes: online orders are placed online, stores pick and ship, and nearby delivery is prioritized. One of Walmart’s most frequently cited stats is: 90% of the US population lives within 10 miles of a Walmart store. You may not like it, but it’s hard to deny that it’s close to you.

The so-called $140 billion e-commerce revenue isn’t just about burning money to grab traffic; it’s about solidifying services like “store pickup” and “same-day delivery.” Meanwhile, it leverages that traffic to pursue more profitable businesses: advertising with Walmart Connect. In the most recent quarter, global ad revenue grew over 20%. Retail is attractive, with high-margin advertising and membership fees (Walmart+).

Ten years of steady effort: laying a solid foundation step by step

Walmart’s e-commerce didn’t suddenly take off.

It started laying the groundwork in 2011, and in 2016, spent $3.3 billion to acquire Jet.com, bringing in technology and talent (like Jet.com founder Marc Lore). It wasn’t until 2022 that its e-commerce business turned profitable for the first time.

Ten years may seem slow, but most of what they did was low-profile yet essential—especially in logistics and warehousing.

Starting in 2018, Walmart invested billions in automated warehouses, introducing robotic equipment; they also deepened cooperation with Symbotic, planning to deploy automation systems at 42 regional distribution centers to increase pallet processing speed and throughput.

More importantly, these investments weren’t just for online shipping. As warehouse and distribution efficiency improved, store replenishment also became faster. These expenditures might not look great on the short-term profit statement, but over time, they become barriers to entry.

Stores are not just for selling: they are also warehouses and distribution centers

Walmart’s real strength lies in redefining the store. In the past, stores were responsible for display and sales. Now, many stores function more like front-end warehouses: close to customers, suitable for local delivery and pickup.

The benefit is straightforward: the most expensive part of e-commerce is the “last mile,” and stores naturally save on this cost.

Walmart has disclosed that using stores for delivery can reduce last-mile delivery costs by at least 20%. To implement this model, they also created a crowdsourced delivery platform similar to Uber—Spark Driver—to bring outside delivery capacity into the fold, delivering from stores directly to homes.

Plus, with inventory systems integrated between stores and online, inventory allocation becomes more flexible: which products are stored in stores, which in warehouses, is more precisely managed.

Currently, over half of Walmart’s online orders are fulfilled directly from stores. Costs are lowered, delivery becomes more punctual, and e-commerce continues to grow.

Using technology to make things easier, not to become a tech company

As AI surges forward, Walmart is also adopting new technologies.

It collaborates with companies like OpenAI and Google to apply generative AI in recommendations, search, and inventory management; it continues to use robots in warehouses to improve picking efficiency.

For example, it has launched AI-based search: no longer needing to search separately for “potato chips” or “balloons,” you can simply input “Help me plan a 6-year-old’s soccer-themed birthday party,” and the system will list a basket of product combinations. At the store level, it is also promoting digital shelf labels (ESL), which can change prices in minutes instead of weeks, and use lights to alert staff locations, speeding up picking.

But Walmart’s focus has never been to present itself as a tech company. The most important thing in retail is to avoid mistakes, stockouts, overstocking, ensure timely delivery, and smooth procurement. Doing these well naturally earns customer loyalty.

Walmart hasn’t become the second Amazon

Walmart’s recent rise isn’t because it learned from Amazon, but because it reconfigured its own strengths:

Store network, supply chain, and a bit of technology to boost efficiency. It doesn’t pursue “e-commerce first,” but cares more about how each order can be cheaper, more stable, and faster.

This approach has even attracted a group of previously less loyal Walmart customers—such as middle-income earners making over $100,000 a year. For them, price is important, but saving time and convenience are equally valuable.

For traditional companies, this approach is quite instructive: not every company needs to rebrand itself as “Internet-based.” A more practical strategy is to strengthen your core foundation first and then decide where to add technology.

As for new things like cashierless retail, AR/VR shopping, Walmart will certainly try, but the ultimate determinants are still the classic issues: how well online and offline are integrated, whether delivery and inventory are stable, and whether shopping is convenient for customers.

As long as these continue to improve, Walmart has plenty of room to grow.