Changing Shopping Habits Impact Amazon and Walmart
| Feature | Details |
|---|---|
| Revenue Impact | Amazon and Walmart report weakest sales growth since pre-pandemic. |
| Changing Preferences | Consumers are spending less on stuff, more on experiences and essentials. |
| Amazon Strength | Leads in discretionary spending (23% market share in Q1 2025). |
| Walmart Strength | Dominates essential spending, especially groceries. |
| Projected Revenues (2025) | Amazon: $63B Net Income; Walmart: $708.7B Sales, $22B Net Income. |
| Strategic Moves | Amazon investing $100B in AI; Walmart expanding automation. |
| Source | PYMNTS |
The retail game is changing fast. Amazon and Walmart are navigating a world where customers want value, speed, and meaningful experiences. While both giants adapt in their own ways, the real power lies with you — the shopper. With tools, data, and deals at your fingertips, it’s a great time to shop smart and spend where it counts. As these retail giants evolve, your choices and habits will continue to shape the future of the entire industry.
What’s Causing the Shift in Shopping Habits?
The Rise of the Value-Driven Shopper
In these challenging times, inflation is more than a word—it’s a weight felt deeply by families striving to meet their daily needs. Rising costs for groceries, healthcare, and housing are gently nudging communities to prioritize essentials, turning items like new shoes or tech gadgets into thoughtful choices rather than routine purchases. This shift reflects a shared resilience, as families come together to make every dollar count, fostering stronger bonds through careful, caring decisions.
With compassion and resourcefulness, shoppers are embracing smarter ways to care for their loved ones. They’re thoughtfully comparing prices, using tools like coupon apps to stretch their budgets, and reading reviews to ensure every purchase brings value. By moving beyond brand loyalty and seeking deals at places like Amazon, Walmart, or local stores.
Services and Experiences Are the New Hot Buys
Remember how during the pandemic everyone was online shopping like it was a sport? That’s dialed way down. Folks are now putting money toward services like healthcare, travel, fitness, and dining out. According to data from Deloitte, 54% of U.S. adults plan to spend more on experiences in 2025 than they did last year. People want experiences after years of isolation — and it’s eating into spending on physical goods.
Dining out, going to concerts, or planning family trips has taken priority over that fourth Bluetooth speaker. Subscription services like Spotify, Netflix, and gym memberships are also in demand — all contributing to a redistribution of household spending.
How Are Amazon and Walmart Affected?
Amazon’s Discretionary Dilemma
Amazon has long been the king of convenient, fast delivery and shiny gadgets. But Q1 2025 saw its discretionary market share dip, even though it still commands 23% — a significant lead. This comes as buyers rethink purchases like new TVs or Alexa devices in favor of saving or splurging on a family road trip.
Despite this, Amazon remains a formidable force. Its diversified portfolio means it’s not overly reliant on retail. Amazon Web Services (AWS) continues to rake in billions, and its growing ad business keeps margins high. In fact, AWS alone accounts for roughly 55% of Amazon’s total profit. These digital services help shield Amazon from swings in retail behavior.
With acquisitions like One Medical, it hopes to make same-day health services as easy as two-day shipping. Learn more from Forrester
Walmart’s Essential Edge
On the flip side, Walmart’s sweet spot is groceries and essentials. While it may not have Amazon’s digital dominance, it’s rock-solid where it counts. The company’s share of discretionary spending has actually gone up to 6.4% in Q1 2025.
Walmart has the benefit of scale and accessibility. With over 4,600 stores in the U.S. alone, it’s often the most convenient option. It also operates under a low-price model that appeals directly to the budget-conscious shopper. Walmart’s private-label brands, like Great Value and Equate, are growing as customers look to stretch their dollars.
Strategy Breakdown: How They’re Responding
Amazon: Betting Big on AI and Infrastructure
In 2025, Amazon is doubling down on AI infrastructure, allocating a whopping $100 billion to improve delivery speed, reduce costs, and personalize shopping experiences. This includes updates to Alexa, smarter warehouse systems, and even predictive buying models that suggest products before you realize you need them.
The company is also experimenting with drone deliveries, same-day local hubs, and AI-powered customer support tools. It’s tackling environmental concerns too, by increasing investments in electric delivery fleets and sustainable packaging.
Walmart: Going Local and Lean
Walmart is taking a different route. While expanding its physical footprint, the company is also automating the back end. Think robotic shelf stockers, AI-assisted order picking, and smart freezer tech that reduces energy waste.
They’re focusing on what they call “store of the future” concepts, where in-store navigation is driven by mobile apps, digital shelf labels update prices in real-time, and checkout times are nearly zero. These are not just ideas — many are already rolling out in pilot stores across Texas and Georgia.
Walmart plans to maintain headcount while increasing efficiency, ensuring store-level jobs remain while tech does the heavy lifting. It’s part of a bigger effort to balance job security.
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What Does This Mean for You, the Shopper?
Smarter Deals and Personalized Ads
Expect to see more personalized offers coming your way. Both companies are leveraging AI to tailor recommendations based on your browsing and purchase history. That hoodie you checked out last week? Don’t be surprised if it’s 10% off next time you log in.
Additionally, voice shopping and smart assistant deals are on the rise. Amazon Alexa and Walmart Voice Order are making it easier to shop hands-free. These features aren’t just cool — they’re designed to hook you in with personalized incentives.
Store Experience Is Evolving
Walmart’s local stores are becoming smarter, with upgraded tech for faster shopping and fewer lines. Curbside pickup is getting more efficient, and returns are increasingly automated. Amazon continues experimenting with Just Walk Out tech in select locations, aiming for a frictionless experience that skips the checkout line altogether.
You Call the Shots
With more options and smarter tools, consumers are in the driver’s seat. Use price comparison apps, join loyalty programs, and subscribe to alerts for flash deals. Follow influencers or deal forums like lickdeals to score savings others miss. Being strategic pays off.
Guide to Shopping Smarter in 2025
- Prioritize Essentials First – Start your shopping with groceries, hygiene, and bills.
- Set Monthly Budgets – Use apps like Mint or YNAB to track where your dollars go.
- Compare Before You Click – Check prices on both Amazon and Walmart before buying.
- Use Rewards Cards – Consider cards that give cashback for groceries or online shopping.
- Plan Big Buys Around Sales – Amazon Prime Day, Walmart+ Week, and Black Friday are your friends.
- Stay Subscribed to Email Alerts – You’ll catch flash sales and special coupons.
- Try Subscriptions for Essentials – Both platforms offer autoship discounts.
- Take Advantage of Store Pickup – Avoid shipping fees and get what you need fast.
FAQs
Why are Amazon and Walmart seeing slower growth?
Rising costs and changing consumer priorities are pushing people to spend less on stuff and more on essentials or experiences.
Which is better for savings – Amazon or Walmart?
Depends on what you’re buying. Walmart wins on groceries and basics. Amazon excels in electronics, books, and bulk shopping.
Are they laying off employees?
No major layoffs announced. Walmart plans to hold steady, and Amazon is hiring in tech and logistics sectors.
Will prices go up?
Both companies are battling inflation, but also using tech to keep prices competitive. Expect some fluctuation, especially in imported goods.
