Report: Amazon will surpass Walmart as America’s biggest retailer by 2025
Amazon Inc., including its online marketplace of third-party sellers, will overtake Walmart to be the largest retailer in the U.S. by 2025, according to a new report.
The swap in positions will be driven by consumers shifting a greater percentage of their overall purchases to online sellers, according to the “United States Retail Landscape and Market Planning Report 2021” from Edge by Ascential. Overall sales are forecast to climb from $710.7 billion in 2020 to $1.204 trillion by 2025.
The report sees Walmart’s total sales growing 3.9 percent annually by 2025 driven largely by annual gains of 14.9 percent. The forecast sees online making up 16.7 percent of Walmart’s total by 2025.
Amazon’s growth will largely be driven by third-party sellers, which currently make up just over half its sales. The report predicts that the retail giant’s marketplace will account for 66 percent of its total sales over the next four years.
When the dust settles, Amazon’s annual sales in the U.S. will stand at $632 billion and Walmart will be well behind at $523 billion, excluding gas.
Deren Baker, CEO of Ascential Edge, paints Amazon as an inexorable force.
“As Amazon grows to become the largest retailer in the U.S., brands must understand they cannot win through mass personalization when faced with the huge spending power of large marketplaces like this,” he said in a statement. “They should therefore ensure they have the correct strategies in place to use marketplaces, like Amazon, to reach the right consumers and meet their needs.”
Walmart has concentrated on building the size of its marketplace in recent years, but it still pales in a size comparison. Should Amazon succeed in passing Walmart, it will not be because the nation’s current largest retailer has not been paying attention. A self-assessment by Walmart under the name Project Glass concluded that the retailer was falling short and that upping its omnichannel game was a business imperative.
The retailer has focused on making its app and website easier to search, shop and for completing purchases. If this approach sounds like Amazon me-toos, it is because Walmart has made the assessment that it has to match its currently smaller rival before it can build a bigger lead. Whether that will happen by 2025 is the question.
- Amazon to pass Walmart in US retail sales in 2025, report says – Bloomberg/Bangor Daily News
- Amazon On Track to Overtake Walmart as The Largest US Retailer By 2025 – eSeller 365
- Walmart is betting on a secret initiative called ‘Project Glass’ in the war against Amazon. See the full presentation outlining its plan. – Business Insider
- Walmart uses brutal self-assessment in omnichannel turnaround strategy – RetailWire
DISCUSSION QUESTIONS: Do you think total sales made through Amazon’s stores and online platforms will surpass those of Walmart by 2025? What does this mean for these parties and the rest of the retailers that compete with them?