Walmart's turnaround doesn't depend on becoming the next Amazon.

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If someone told you two years ago that Walmart’s stock would outperform Amazon’s, you’d probably think it was a joke.

Because in many people’s eyes, Amazon represents the future while Walmart belongs to the past. But the market’s answer over the last two years is very clear: Walmart’s stock price nearly doubled in two years, not only pushing its market value into the trillion-dollar club, but also winning it a growth stock valuation previously reserved for tech companies.

So what exactly happened? Did Walmart finally figure out how to do e-commerce?

In fact, it took a different path: instead of going head-to-head with Amazon in pure e-commerce, it combined online and offline, with online responsible for bringing in orders and physical stores handling faster and cheaper fulfillment. As store efficiency improved, the online experience naturally got better as well.

Just like that, Walmart leveraged its 11,000 stores worldwide to the fullest, turning them into its trump card against pure e-commerce.

Don’t go head-to-head with e-commerce, turn stores into an advantage

To be clear, Walmart still does e-commerce—it just doesn’t treat “online” as the end goal. It cares more about how online and offline work together, and how to make shopping smoother and pickup faster for customers.

What used to worry traditional retailers most was “moving offline to online.” But Walmart saw things clearly: on the pure e-commerce racetrack, it can’t win a direct fight with Amazon.

So, instead, it turned stores into hubs—orders placed online, picking and shipping done by stores, local delivery. One of Walmart’s most quoted stats: 90% of Americans live within 10 miles of a Walmart store. You may not like it, but you can’t deny it’s close to you.

Walmart’s $140 billion e-commerce wasn’t built by burning cash for traffic, but by nailing down services like “store pickup” and “same-day delivery.” Meanwhile, it channels traffic into more profitable businesses: advertising (Walmart Connect). In the latest quarter, global ad revenue grew over 20%. Retail attracts, but high-margin advertising and membership fees (Walmart+) make money.

A decade of “hard work”: building the foundation step by step

Walmart’s e-commerce didn’t just take off overnight.

It started as early as 2011, and in 2016 spent $3.3 billion to buy Jet.com, bringing in both tech and talent (such as Jet.com founder Marc Lore). It wasn’t until 2022 that the e-commerce business turned its first profit.

A decade sounds slow, but the work was often unglamorous but essential. The most critical part: logistics and warehousing.

Since 2018, Walmart spent billions of dollars on automated warehouses and brought in robots; it also worked deeply with Symbotic, planning to deploy automation in 42 regional distribution centers to speed up pallet handling and throughput.

More importantly, this investment isn’t just for online orders. As fulfillment efficiency improved, store restocking also became smoother. These investments might not look good on short-term profit statements, but over time they turn into barriers to entry.

Stores aren’t just for selling: they’re warehouses and delivery hubs too

Walmart’s real strength is redefining the role of the store. Instead of just displaying and selling, now many stores function as forward warehouses: close to people, perfect for local delivery and pickup.

The advantage is obvious: for e-commerce, the most expensive part is “the last mile,” and stores naturally save that cost.

Walmart has revealed data: using stores for delivery cuts last-mile costs by at least 20%. To make this work, it even built Spark Driver, a crowdsourced delivery platform like Uber, tapping external delivery staff to fulfill orders from stores to homes.

With store and online inventory integrated, transfers are more flexible: it’s much clearer what should be stocked in each location.

Now, more than half of Walmart’s online orders are fulfilled directly by stores. Costs are down, deliveries are more punctual, and e-commerce continues to grow.

The purpose of tech is to make things easier, not to act like a tech company

With the AI wave surging, Walmart is obviously investing in tech too.

It works with OpenAI, Google and others, applying generative AI to recommendations, search, inventory management; warehousing continues to use robots to boost picking efficiency.

For example, it launched generative AI-powered search: you no longer need to search separately for “chips” and “balloons,” you can simply enter “help me plan a soccer-themed 6-year-old’s birthday party,” and the system will show you a basket of product options. On the store side, it’s rolling out Electronic Shelf Labels (ESL): price changes that once took two weeks now happen in minutes, plus lighting signals help employees find locations faster for picking.

But Walmart’s priority was never to package itself as a tech company. What matters most in retail is no mistakes, no stockouts, no backlog, punctual delivery, and easy pickup. Get these right, and customers will vote with their feet.

Walmart didn’t become another Amazon

This surging performance by Walmart isn’t because it became Amazon-like; instead, it recombined its own strengths:

Store network, supply chain, plus a bit of tech to boost efficiency. It doesn’t strive to be “No.1 in e-commerce,” but cares more about making each order cheaper, steadier, and faster.

This strategy has even attracted new kinds of customers, such as middle-class Americans with incomes over $100,000. For them, low price matters, but saving time and convenience are just as valuable.

For traditional companies, this approach is worth considering: not every business needs to brand itself as “internet-driven”; a more practical way is to solidify your foundations and then decide where to add technology.

As for new things like cashier-less retail and AR/VR shopping, of course Walmart is testing them, but the outcome still hinges on old questions: does online-offline integration run smoothly, are deliveries and inventory stable, is shopping convenient?

As long as these keep improving, Walmart will have continued room to grow.

Source: Yan Wai Zhi Yi Pro

Risk Warning and DisclaimerMarkets have risks, investment needs caution. This article does not constitute personal investment advice, nor does it consider individual users’ special investment goals, financial status, or needs. Users should consider whether any opinions, views, or conclusions in this article match their specific situation. Invest accordingly, at your own risk. ```