Walmart Inc. (NASDAQ:WMT) is ramping up efforts to close the gap with Amazon.com Inc. (NASDAQ:AMZN) by speeding up deliveries, expanding its marketplace, and leaning on strong consumer demand trends.



<h2>Walmart Steps Up Competition With Amazon</h2>



Walmart is testing a new approach that uses store back rooms to hold products from third-party sellers, aiming to enable faster delivery, including same-day delivery.



The company has launched these trials in select Dallas stores, building on its existing model, in which stores act as local fulfillment hubs and already deliver more than a third of online orders within 3 hours.



By moving marketplace inventory closer to customers, Walmart is working to cut delivery times compared with shipments from external warehouses or sellers, the Financial Times reported on Sunday.



<h2>Marketplace Expansion Targets Amazon Gap</h2>



Walmart continues to scale its marketplace, which offers about half a billion items from third-party sellers who retain ownership until sale and pay commissions and shipping fees.



While Walmart's marketplace revenue is growing close to 20% annually (as per CFO John David Rainey), it remains significantly smaller than Amazon's.



Amazon recently pulled ahead to become the top company on the Fortune 500, reporting $716.9 billion in annual revenue versus Walmart's $713.2 billion, which rose 4.7% year-over-year.



Amazon's growth reflects strategic shifts, including scaling same-day delivery and expanding Whole Foods, while its AWS unit generated $45.6 billion in operating income on $128.7 billion in revenue, contributing over half of total operating profit.



<h2>Supply Chain, AI And Consumer Strength Support Strategy</h2>



Walmart has created space for marketplace inventory by automating warehouses so its own goods arrive store-ready, freeing up back-room capacity.



It is also using AI tools to decide which products to place in stores based on local demand, though limited space remains a constraint.



At the same time, Walmart is accelerating its digital push, with U.S. e-commerce sales rising 27% and global online sales up 24% in the latest quarter, reaching 23% of U.S. sales.



TD Cowen analyst Oliver Chen said strong holiday spending led his team to raise estimates by 4% to 5% and highlighted Walmart as a top retail pick, citing its ability to serve both higher-income and value-focused customers, its combined online and in-store strategy, and its growing retail media business, currently about $5 billion with potential for significant expansion and high margins.



Price Action: Shares of Amazon.com slipped 0.59% to $249.07, while Walmart edged up 0.24% to $127.80 in Monday's premarket session, according to Benzinga Pro data.



Photo via Shutterstock

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Walmart is enhancing its delivery capabilities to compete with Amazon by utilizing store back rooms and AI to speed up deliveries and expand its third-party marketplace. The company is testing new strategies in Dallas to enable faster delivery, including same-day options. Despite growing marketplace revenue, Walmart's offerings remain smaller than Amazon's. Walmart's e-commerce sales are rising significantly, and analysts highlight its strong position in the retail market, especially during the holiday season. Shares of Walmart and Amazon showed slight movements in premarket trading.

- Walmart Inc. is enhancing its competition with Amazon by implementing faster delivery options and expanding its marketplace in response to strong consumer demand.  
- The company is trialing a new strategy of using store back rooms for third-party seller products to enable faster deliveries, including same-day options, while already delivering over a third of online orders within three hours.  
- Despite Walmart's marketplace growing nearly 20% annually, it still trails significantly behind Amazon, which reported $716.9 billion in annual revenue compared to Walmart's $713.2 billion.

Walmart Targets Amazon's Biggest Edge With Aggressive Delivery Overhaul