This year was supposed to be a slugfest between the nation’s two biggest retailers, Amazon and Walmart. But even in a pandemic in which Walmart should have had some natural advantages — a brick-and-mortar presence and investments in click-and-collect orders — early signals from spending data suggest that Amazon hit the turbo-boost button and left Walmart in the dust.
As Amazon AMZN, +1.33% gets ready to announce second-quarter earnings Thursday, a closer look at the consumer spending data drawn from debit card transactions representing the average U.S. consumer helps tell a tale of two companies.
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We see, above, the consumer spend at Amazon and Walmart WMT, -0.49% on a given week in 2019 as compared to that same week in 2018.
Looking at the week of Oct. 6, 2019, Amazon is cruising along with about 18% higher spend than the previous year. For that same period, Walmart is down by 5%.
Both companies experience some Thanksgiving-related jolts — around the actual Thanksgiving day for Walmart, and in the week after Thanksgiving for Amazon, due to its week-long Cyber Monday promotions. During those spikes, Walmart gets as much as a 22% year-over-year bump, and Amazon 35%.
Both companies then resume their normal cruising altitudes: About 20% growth for Amazon, while Walmart alternates between 2% increases and 10% decreases.
At the tail end of the year, Amazon suffers a slight downtick while Walmart experiences an uptick. Could it be that the two are poised to enter the new year on even footing? Maybe Walmart’s buying spree of recent years, snapping up online retailers to complement its brick-and-mortar stores, would finally start bearing fruit.
Nope, at least not with consumers.
The week of Jan. 12, 2020, we see that the brief hopes for a more evenly matched clash of the titans have evaporated. Amazon is back to its roughly 20% year-over-year growth, while Walmart is flat.
The coronavirus arrives
But what’s really interesting is what happens once COVID-19 rears its ugly head.
Of the two retailers, Walmart seems like it would best be positioned to capitalize upon the COVID-19 crisis. Start with ubiquity. As recently as 2017, 95% of Americans had shopped at a Walmart or Walmart.com within the past year.
Add the fact that Walmart had introduced pandemic-friendly options such as the ability for customers to buy online and do curbside pickup at a physical store. For good measure, consider that even in a pandemic and the economic hardship that goes along with it, people still need groceries — and there are a lot more Walmarts than there are Amazon-owned options like Whole Foods.
For a brief moment, it seems like Walmart is on a good track. Both companies experience a spike around March 8 and March 15 that can be attributed to “panic shopping” as people stocked up on essentials. Amazon experiences a 30% year-over-year increase, while Walmart rises about 18% year-over-year.
Then, Walmart sinks back down to minus 5%, while Amazon takes off like a rocket. Amazon achieves as much as a 95% increase in year-over-year spending, and maintains at least a 70% increase in year-over-year spending for 11 of the next 14 weeks. Walmart, meanwhile, shows a comparatively unexceptional 5%-10% increase.
That sharp downtick that Amazon experiences around July 19, 2020? That’s just reflective of the fact that they didn’t hold their Prime Day promotion for members this year, so the 2020 spend is, naturally, lower when compared against 2019.
Even Amazon seems to have been caught off guard by their success post-COVID-19. (Fulfillment and delivery delays, anyone?)
If there’s a message here, it’s that if you thought that Amazon’s retail business was too big and too mature to grow at 20% year-over-year, you’re right. They’re actually growing at closer to 70% based on what 2020 has shown us so far.
Randy Koch is the CEO of Facteus, a company that collects billions of consumer-card transactions sourced from more than 1,000 U.S. financial institutions.
