Amazon has key advantage in Walmart retail heavyweight battle with continuous automated fulfilment a difference maker

Much has been written and said about the battle for market dominance between Walmart and Amazon.

As things stand, who has the upper hand?

A common theme of most articles written about Amazon and Walmart, is that the latter has an advantage over the firmer due to the fact Walmart operates 4,609 Walmart stores and 599 Sam's Club locations.

An interesting fact is that there is a Walmart located within ten miles of 90% of the population in the USA.

It has invested heavily to automate much of its logistics operations including recently opening its third LTL consolidation centre. The facility consolidates general less-than-truckload shipments from suppliers into truckload shipments, which are then sent off to one of Walmart’s 42 regional distribution centres.

These efforts have increased the retailer’s ability to deliver more products the same-day they were ordered or the next-day.

Amazon, meanwhile, has 55 same-day delivery facilities in the US with more being built.

It operates 110 fulfilment centres in the US, delivered over seven billion packages in 2023 and will deliver an estimated eight billion packages in 2024; most of the packages will be delivered the same-day.

In a LinkedIn post, Brittain Ladd, as supply chain consultant and former Amazon executive, said: “Amazon has an advantage over Walmart because it can deliver its packages with precision.”

“For example, provide an accurate time window when a package will arrive. I’ve stated for years that precise deliveries are more important than fast deliveries. Amazon can provide speed and precision.”

“My advice to Walmart is that they must imagine a new way for how to leverage the back rooms of their stores to provide continuous automated fulfilment.”

“This means opening micro-fulfilment centres (MFC) that can fulfil online orders with precision for delivery to customers. Another option is allowing customers to pick up their orders 24/7, or have a gig worker pick up the order and deliver it to a customer.”

Attabotics, Ladd notes, has an advantage when it comes to opening MFCs inside the back rooms of stores as its system can take advantage of the high ceilings.

If Walmart automates online order fulfilment and implements rapid inventory replenishment in the back rooms of its stores, it will have a legitimate last mile delivery advantage over Amazon, as it will have more fulfilment locations than Amazon, he adds.

Ladd concluded: “In addition to recommending to Amazon to acquire Whole Foods Market, I made the argument to acquire Target. It’s probably too late to do this. However, Amazon can scale a new grocery store format; Whole Foods+ for example, but it will be an expensive and lengthy endeavour.”

A better option, he believes, is for Amazon to open and scale a new grocery format store and also scale a large number of automated MFCs powered by AutoStore, Brightpick, Attabotics etc.

“Amazon can theoretically open an integrated network of thousands of MFCs surgically located to maximise delivery speed and precision.”