Any Amazon (NASDAQ:AMZN) shareholders thinking Walmart (NYSE:WMT) poses no threat to the king of e-commerce may want to reconsider that stance. While the world's biggest brick-and-mortar retailer isn't apt to dethrone Amazon as the leading online retailer anytime soon, some telling details regarding both sites' shoppers (and sellers) suggest that Walmart could at least make a dent in Amazon's dominance.
That's the key takeaway from a recent survey of regular Amazon shoppers as well as Walmart.com shoppers performed by market research outfit Jungle Scout. A surprising number of U.S. consumers are fans of the latter's platform for unsurprising reasons. And, as the poll's respondents point out, Walmart's subscription-based delivery program Walmart+ is gaining on Amazon Prime, naturally steering shoppers toward the retailer's shopping ecosystem.
Here's a closer look at three of the more eye-opening data nuggets from the Jungle Scout survey.
1. Amazon's third-party sellers are noticing the alternative's growth
To its credit, Amazon is improving its relationships with third-party sellers who have been frustrated with the world's biggest online marketplace for years. But those efforts just haven't been enough. Although only 7% of Amazon's sellers currently also sell at Walmart.com, according to the poll, 39% of Amazon's third-party vendors are considering adding Walmart.com as a selling venue before the end of this year. And why not? One-third of Amazon's sellers expect Walmart's e-commerce platform to evolve into strong competition from this point forward.
Granted, thinking about adding Walmart.com as a selling venue (or outright switching) isn't the same as actually making such a move. However, it's telling to see a third of the sellers on the world's biggest online store even mulling the possibility.
2. Amazon's shoppers aren't exactly anti-Walmart
Amazon shoppers are as numerous as they are loyal to that particular venue. Jungle Scout's report indicated that 65% of U.S. consumers shop with Amazon, while only a third of U.S. shoppers use Walmart.com. And, among those who only visit one or the other, 35% of consumers only shop at Amazon.com versus a mere 9% for Walmart.com loyalists. But, even many of those Amazon fans who don't shop at Walmart.com are still fans of Walmart's brick-and-mortar presence, with 57% of the Amazon-only crowd still shopping at physical Walmart stores.
These regular in-store visits being made by Amazon's loyal online shoppers present an incredible opportunity for Walmart to convert them to Walmart.com shoppers. It's an opportunity Amazon doesn't have simply because it has very little brick-and-mortar presence.
In this same vein, curbside pickups and easy drop-off returns are reasons that 23% and 31%, respectively, of Walmart.com shoppers picked that particular online shopping site.
3. Walmart+ is catching up
Finally, while the power of Amazon's Prime program -- free and fast shipping as well as access to other services, including a large streaming-content library -- is undeniable, Walmart's spin on the same idea has gotten surprisingly strong traction just since launching last September. Jungle Scout reports that whereas 59% of U.S. consumers are Prime subscribers, a healthy 35% of this consumer crowd are Walmart+ members. Discounts on fuel purchases and free delivery of perishable groceries from a nearby store are the distinguishing draws of Walmart's subscription-based offer.
For perspective, Amazon Prime debuted in 2005.
Connecting the dots
Don't read too much into the message. Jungle Scout reckons Amazon's e-commerce sales are still about six times greater than Walmart's online sales revenue. And Amazon has never been a company to rest on its laurels. It's going to do whatever it can feasibly do to keep its competing retailers at bay. Its foray into physical retailing is part of this effort.
Still, it would be naive to ignore the fact that Walmart's online marketplace is quickly becoming a serious contender that could at the very least put pressure on Amazon. And that's something new for the company's shareholders; they've never seen (or had to value) a growth-oriented Amazon when growth hasn't been relatively easy. It's absolutely a dynamic Amazon investors need to keep in mind, even if it's not quite a reason to panic yet.