Amazon’s Ecosystem Muscle Squeezes Walmart’s Store Network as Retail Race Shifts

If there’s a single pattern emerging across 2025’s retail varied landscape, it’s this: businesses are doubling down on what increases loyalty, reduces friction and amplifies their flywheel effect.

Against this backdrop, the obstacles are growing steeper for anyone trying to match Amazon on scale, speed and ecosystem integration. And that includes Walmart.

After all, Amazon’s tech roots and diversified business empire position it neatly at the intersection of a globalized and digital retail landscape. 

New data from PYMNTS Intelligence in the September report “Share of Wallet: Amazon vs. Walmart” shows that the risk for Walmart comes from being squeezed in categories that were once strongholds for the original retail powerhouse.

Amazon, through Prime and its tech aesthetic, has raised expectations around fast delivery, seamless returns and breadth of choice. Shoppers now expect frictionless experience in nearly all categories.

Walmart is working to deliver that, but has further to go, especially in digital UX, online discovery and delivery speed for non-grocery items.

This isn’t to say Amazon has no vulnerabilities, or Walmart that it can’t pull ahead in certain arenas. As the marketplace news this week shows, both retail titans are far from embracing a passive mindset as they compete.

Related: Amazon Now Captures Nearly 10% Share of Overall Retail Spend 

What we are witnessing is less a race with distant competitors than the early innings of a new order, where infrastructure, tech integration and experience are core assets, not just physical stores and price leadership.

Amazon’s accelerating share gains and broadening category dominance derive largely from its tech-enabled infrastructure. Its marketplace model, fulfillment logistics, Prime delivery promises and now more immersive hardware (via augmented reality), all work together. Amazon is converting marginal shopper preferences (faster shipping, broader choice and better discovery) into growth in discretionary and even habitual spend.

A major development is its reported work on augmented reality (AR) glasses. The consumer version is expected to launch in late 2026 or early 2027. It will include a full-color display in one eye, along with microphones, camera, speaker, etc. In parallel, Amazon is developing a version for its delivery drivers whose job is to improve efficiency with turn-by-turn navigation and hands-free instructions near the delivery endpoint.

Equally notable is the company’s alliance with CrowdStrike to give Business Prime members access to Falcon Go at no extra cost. The move tries to convert a B2B trust problem—widespread SMB exposure to modern ransomware and breach tactics—into a retention feature for Amazon’s procurement and marketplace ecosystem. 

If, as per the PYMNTS report, Amazon is already winning the spend shift toward digital channels, the next frontier is closing the distance between intent and fulfillment, and doing so in an environment that feels secure by default.

Read more: Share of Wallet: Amazon vs. Walmart

While Amazon is expanding outward, Walmart appears to be consolidating inward and diversifying its architecture of operations and tech. The retailer’s counter this week to Amazon unfolded along three vectors: human capital, operational AI and geographic expansion.

Walmart’s strengths remain physical scale, grocery, low price, brand recognition and its store footprint. But to compete, it must offset the friction inherent in physical retail. Sam’s Club, the Walmart-owned warehouse chain, said it is putting “AI managers” on the sales floor, moving beyond back-office pilots. The tools compress routine analysis from hours to minutes, find local suppliers and help managers anticipate seasonal trends to optimize staffing and promotions. 

In a similar vein, Walmart also announced that it will offer customized access to OpenAI Certification for U.S. frontline and office employees via Walmart Academy once the program launches in 2026. The company frames the program as both workforce development and cultural signal: the future of retail belongs to teams fluent in AI tools, from prompt engineering basics to problem-solving on the floor.

The picture that emerges is of a company working to get the most out of time: time to learn, time to decide and time to buy. The difference with Amazon is that Walmart’s time compression is occurring within a far more physical network, where marginal gains hinge on manager tools, associate fluency and consumer programming layered on top of stores.

But Walmart isn’t giving up on the physical store network. The announcement of Walmart’s recent geographical expansion into South Africa under its own name signals it sees growth beyond U.S. saturation.

The PYMNTS Intelligence Share of Wallet numbers don’t say Walmart is losing. They say the company is steady while Amazon is accelerating. That framing matters because steady can look like erosion in the face of compounding digital gains. eCommerce isn’t a channel anymore; it’s the environment. And if Amazon’s edge is to make the environment disappear, Walmart’s is to make the enterprise feel smarter, across each store, shift, stream and SKU. 

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