Walmart vs. Amazon: How the Giants Are Pivoting for a Unique 2020 Holiday Season

George Hatch

November 18, 2020

Deck the fulfillment centers with boughs of inventory.

It’s that time of year again—2020 is (thankfully) coming to an end and the holiday season is upon us. Online marketplaces are busy preparing for increased holiday shopping demand in a year marked by a boom in online shopping and the resulting supply chain chaos.

Two of the biggest ecommerce marketplaces, Amazon and Walmart, have been focusing on spreading out holiday demand and increasing their physical capacities to fulfill orders. Let’s talk about some of the unique challenges marketplaces face this year and what Amazon and Walmart are doing to handle them.

Holiday challenges for ecommerce

Overcapacity is always a challenge for Amazon and Walmart this time of year, but we anticipate this season to be especially taxing as more people than ever shop early and online as a result of the ongoing pandemic.

Pairing this year’s supply chain challenges with record-breaking ecommerce holiday sales makes for a perfect storm. Seasonal stockouts and shipping delays, which aren’t uncommon in a typical holiday season, will likely be exacerbated this season.

Salesforce anticipates global online holiday sales to grow 30 percent year-over-year, with demand exceeding shipping capacity by 5% and up to 700 million packages potentially facing shipping delays.

We also anticipate a high rate of online returns this year, which will create even more complications for marketplaces. Amazon has announced that all purchases made between October 1 and December 31 are eligible for returns until January 31. Walmart has also expanded its return policy, with some holiday items being eligible for returns as late as February 23.

Online shoppers, who can’t try on clothes or see products in person, will likely buy several different sizes and colors and return unwanted items. It will be interesting to see how marketplaces deal with this increase in online returns, especially with seasonal items.

Amazon holiday deals, supply chain issues

Amazon’s holiday strategy started early this year—if not entirely intentionally—when it was forced to move Prime Day from July to October because of the coronavirus. Even though this decision was primarily made because of the pressure the pandemic put on Amazon’s supply chain, it had a side effect of kicking off holiday shopping one month earlier than normal.

Amazon Holiday Deals and Ecommerce Strategy | Pattern

Despite the delay, Prime Day 2020 was record-breaking. Amazon didn’t disclose total Prime Day sales, but it did announce that third-party sellers surpassed $3.5 billion, marking a 60% year-over-year increase.

This is especially noteworthy considering that Amazon primarily featured its own inventory during Prime Day, as it has done historically. The Echo Dot was the best-selling Prime Day item, Alexa-compatible devices sold in record numbers, and customers bought more Fire TVs than in any previous Prime Day.

Less than 2 days after Prime Day ended, Amazon initiated its Holiday Dash event with daily “epic deals” throughout November. By moving Prime Day to November and spreading out Black Friday deals throughout the entire month, Amazon has spread out its high holiday demand to lessen the load on its already-strained supply chain.

Although no one could’ve predicted this year’s unique challenges, Amazon has been building out its own massive logistics and delivery network for years, in part because of other carriers missing delivery estimates around the holidays. Now, the mega corporation handles more than half of its own deliveries.

In 2020, Amazon has expanded its fulfillment center square footage by 50% and hired hundreds of thousands of employees, including 100,000 seasonal employees to meet holiday demand. In the last month alone, Amazon has announced seven new fulfillment centers in the U.S.

Despite this unprecedented physical expansion, Amazon is still struggling to keep up with demand, and the holiday season will only intensify the problem.

Regardless of these challenges, Amazon will likely continue to have great holiday deals and price parity with products we see on Walmart, Target, and Best Buy.

Walmart’s holiday strategy—extended Black Friday, WFS, & more

While historically Black Friday is much bigger in-store than online, it’s likely to look quite different this year. Walmart—which is closing its stores on Thanksgiving Day for the first time in 30 years—is taking the lead in representing the shift to online Black Friday shopping with its month-long Black Friday offering, “Black Friday Deals for Days.”

As part of this offering, Walmart is moving Black Friday shopping from a single day to three different events throughout the month of November, creating something of a Black Friday experience. The deals will start online at Walmart.com and continue into stores a few days later with new deals for brick-and-mortar buyers.

Walmart Holiday Deals for 2020 and Ecommerce Strategy | Pattern

This approach will reduce Walmart in-store traffic, addressing the concern of keeping both employees and customers safe in its 4,700 U.S. stores during the biggest and most exciting shopping event of the year. Like Amazon’s Holiday Dash event, this month-long event will also spread out holiday demand to make it easier to keep up with.

Similarly to Amazon, Walmart 1P, or Walmart-owned inventory, is facing increased constraints and will have more seasonal stock-outs than usual this year. In response, Walmart is rapidly growing the marketplace side of its business so it has less owned inventory to worry about.

Walmart announced that it would be creating “pop-up Ecommerce Distribution Centers” (EDCs) within its current Regional Distribution Centers (RDCs) and is hiring more than 20,000 seasonal employees to help meet ecommerce holiday demand. RDCs typically exist to send pallets of product to Walmart stores. With the incorporation of pop-up EDCs, these distribution centers will also have the capacity to send products directly to consumers to increase fulfillment output.

Lastly, Walmart launched and is growing its Walmart Fulfillment Services, a 2-day offering that mirrors Fulfilled by Amazon (FBA) functionality for third party sellers.

We expect that Walmart will see a lot of success this season by directly tying holiday shopping to the launch of its new subscription offering, Walmart+, an Amazon Prime competitor that launched in September. Walmart+ memberships include unlimited free delivery from stores and the Scan & Go tool, both of which may be appealing for holiday shoppers.

Both Amazon and Walmart are increasingly relying on third party sellers to fulfill holiday demand. Need help selling your products on their marketplaces? Contact us below.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Global Ecommerce Weekly News: 27th September 2022
Blog

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)

Global Ecommerce: Weekly News (20th September 2022)
Blog

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)

Global Ecommerce: Weekly News (13th September 2022)
Blog

Global Ecommerce Weekly News: 13th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon scales back on US warehouse facilities Amazon is shutting down two facilities with 300 employees, discarding plans for 42 facilities, and delaying plans to open a further 21 buildings across the US. The ecommerce giant is scaling back on hiring as well as the expansion of its vast delivery network, as it was left with an excess of space following its rapid expansion during the pandemic. [Read more on Business Insider](https://www.businessinsider.com/amazon-closes-2-facilities-scraps-plans-42-new-buildings-report-2022-9?r=US&IR=T) --- Other Marketplace News --- JD.com is ‘betting’ on ecommerce grocery market Amidst a slowing economy and a decline in ecommerce, Chinese ecommerce giant JD.com has increased its urgency to seek new growth engines. The company is looking to boost its online grocery business through offline partnerships and expansion into lower-tier cities, where it may be able to unleash more consumption power. [Read more on The Star](https://www.thestar.com.my/tech/tech-news/2022/09/08/chinese-ecommerce-giant-jdcom-bets-big-on-online-grocery-lower-tier-markets-amid-slowing-economy) Shopee shuts operations in Argentina, Chile, Colombia, and Mexico Sea’s ecommerce arm, Shopee, has shut local operations in some LATAM countries but will continue to maintain cross-border operations in a few markets. Latin America is Sea’s most important region following South-east Asia, accounting for close to 19% of its revenue in 2021. The move away from these countries is largely due to increased levels of macro uncertainty and rising interest and inflation rates, and rather putting a focus on its core operations. [Read more on Straits Times](https://www.straitstimes.com/business/companies-markets/seas-shopee-shuts-operations-in-argentina-chile-colombia-mexico-sources) --- Other Ecommerce News --- Instagram scales back in-stream shopping elements Instagram is re-examining its approach as it hasn’t been able to make ‘fetch’ happen. ‘Fetch’ in this context being the online shopping trends which have become all-consuming in China, and what Western social platforms have been hoping to add into their apps to make them more addictive and revenue-generating. Consumers have not been swayed by the latest shopping tools on TikTok and Instagram, leading to Instagram scaling back its in-stream shopping program. [Read more on SocialMediaToday](https://www.socialmediatoday.com/news/instagram-scales-back-in-stream-shopping-elements-as-it-re-examines-its-app/631276/) FedEx Express supporting the growth of cross border ecommerce FedEx express has expanded its international commerce shipping service to four more markets across the Asia Pacific, Middle East and Africa (AMEA) region in an effort to support the strong development of ecommerce in this region. Three of the fastest growing markets, the Philippines, Indonesia and Vietnam are leading Southeast Asia’s ecommerce sales, which is set to reach $100 billion by 2023. [Read more on Post & Parcel](https://postandparcel.info/149889/news/e-commerce/fedex-express-supports-the-growth-of-cross-border-e-commerce-within-the-amea-region/) India ramps up hiring as companies prepare for shoppers Ecommerce companies are getting ready for the festive season by rapidly expanding their temporary workforce. As ecommerce in India grows, the country is predicted to have 372 million online shoppers by the end of 2022. The festive season this year, running from October to December, is expected to see a two-fold increase in logistics and delivery alone. During this period, companies are predicted to add 20% more to their existing workforce base, with a 8-10% higher pay scale compared to last year. [Read more on Business Insider India](https://www.businessinsider.in/business/ecommerce/news/the-great-indian-festival-of-hiring-e-commerce-companies-gear-up-for-indias-shoppers/articleshow/94000346.cms)