The trend: Amazon and Walmart are borrowing from each other’s playbooks as they seek to expand market share and defend their turf.

• Amazon’s latest grocery strategy leans on brick-and-mortar stores—including a forthcoming 230,000-square-foot supercenter in Chicago and microfulfillment centers in Whole Foods locations—and fulfillment tactics long used by other traditional retailers, per Business Insider.
• Walmart continues to expand its marketplace selection—most recently with a new premium instruments storefront—to broaden product and brand assortment and increase its appeal to more affluent customers. The retailer currently has roughly half a billion items available on its marketplace, CFO John David Rainey said at a Morgan Stanley conference in November.

The big picture: Both retailers are trying to change not only how their customers shop, but also how their brands are perceived.

• For Amazon, the goal is to persuade consumers to buy more perishable groceries from its platform, which could boost order frequency and enable the retailer to scoop up a larger share of its customers’ spending. Those efforts are showing early signs of success: In areas where its same-day grocery delivery service is available, nine of the top 10 best-selling items are perishables, indicating that increased convenience may be changing purchasing behaviors.
• For Walmart, expanding its share of discretionary spending lies in delivering more stylish designs and adding premium brands. That strategy is helping the retailer capitalize on Target’s struggles and attract more dollars from affluent shoppers, particularly in apparel. Forty percent of Walmart Fashion customers come from households with at least $100,000 in income, EVP of fashion Denise Incandela said at NRF 2026, and those shoppers “are increasing dramatically” thanks to more fashion-forward, targeted assortments.

The agentic question: One area where Walmart and Amazon differ significantly is their approach to agentic AI.

• Amazon is pursuing a largely independent path on agentic shopping. Rather than partner with OpenAI and Perplexity, it is steering shoppers toward its own tools because they can offer a more personalized, reliable experience—most of the time. This approach allows Amazon to maintain its hold on traffic and customer data—and consequently keep its lucrative advertising business humming.
• By contrast, Walmart is open to selling to customers wherever they are, be it in-store or via platforms like ChatGPT. By making it possible to shop with Walmart on as many channels as possible, the retailer is hoping to reach would-be shoppers at the point of inspiration.

Implications for retailers: Amazon’s and Walmart’s moves make them more potent competitors to each other while making an already pressured retail landscape more challenging. We expect Amazon and Walmart to account for over half (54.6%) of ecommerce growth between 2025 and 2027—rising to 61% when Temu is included.

To avoid being further sidelined, other retailers need to:

• Invest in faster, more convenient delivery methods. Those without the resources to build their own fulfillment networks can partner with companies like Instacart, DoorDash, and Uber to help narrow the gap.
• Develop GEO strategies. Amazon’s decision to sit on the sidelines (for now) gives retailers an excellent opportunity to increase AI visibility—but doing so effectively will require experimentation, given limited insight into best practices and ROI.