The Coveted Seat at the Top

In my retailer roundtable group last week, I posed a question:

If you had $50 million to invest, would you put it on Walmart or Amazon?

It sparked a lively conversation.  The answer might not be which one, but just simply “yes.”

Because for the first time in modern retail history, Amazon has officially dethroned Walmart as the company with the largest annual revenue.

Amazon reported $716.9 billion in annual revenue.
Walmart came in just behind at $713.2 billion.

The difference is small. The symbolism is large.

For decades, Walmart has been the undisputed revenue champion of retail. Amazon has been the relentless disruptor. Watching the two arrive at essentially the same scale marks a fascinating moment in the evolution of commerce.

But the story isn’t simply about who sits in the number one seat.

It’s about how they got there—and what it means for the rest of the industry.

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Two Giants. Two Paths.

Amazon did not reach the top of the revenue mountain simply by selling more products online.

Today, Amazon’s retail marketplace is only part of the machine.

Massive revenue streams now come from:

• Amazon Web Services (AWS)
• Advertising
• Third-party seller services and fulfillment fees

Seller services alone account for roughly a quarter of Amazon’s revenue, while AWS contributes another significant portion.

In other words, Amazon has evolved into something far beyond a retailer. It is a commerce platform, technology infrastructure provider, advertising network, and logistics powerhouse rolled into one.

Walmart’s path looks very different.

Its strength remains rooted in what made it great in the first place: stores.

With more than 4,600 Walmart stores and roughly 600 Sam’s Club locations in the U.S., the company has turned its physical footprint into a massive omnichannel network. That network now powers pickup, delivery, and digital fulfillment at a scale few companies can replicate.

The strategy is working. Walmart’s U.S. e-commerce business grew 27% in the fourth quarter, and the company has now posted double-digit digital growth for fifteen straight quarters.

At the same time, Walmart is borrowing pages from Amazon’s playbook—expanding its third-party marketplace and advertising business, two areas with far higher margins than traditional retail.

Both companies are expanding beyond the historical definition of a retailer.

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The Next Battleground: AI

Now the rivalry is entering a new chapter.

Artificial intelligence.

Amazon and Walmart are approaching it in different ways.

Amazon is investing heavily in its own ecosystem—deploying internal models, investing billions into AI infrastructure, and expanding tools like its shopping assistant Rufus, which has already generated billions in incremental sales.

Walmart, on the other hand, is leaning into partnerships with companies like OpenAI and Google, while building retail-specific tools such as its shopping assistant Sparky, which helps customers discover products and navigate assortments.

Early data suggests these tools are already influencing behavior. Walmart has reported that customers using Sparky spend roughly 35% more per order than those who don’t.

Whether through internal development or partnerships, both companies are betting that AI will reshape how customers discover and purchase products.

Retail has always been about discovery.

AI may redefine it.

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The Part of the Story That Matters Most

The Amazon vs. Walmart debate is fascinating.

But the bigger story is the gravitational pull they create across the industry.

Together, Amazon and Walmart now represent roughly 17% of total retail sales in the United States.

Seventeen percent.

Two companies.

In a sector that includes hundreds of thousands of retailers.

Their scale influences everything.

They shape:

• supplier negotiations
• advertising markets
• fulfillment expectations
• pricing strategies
• technology adoption
• and increasingly, how consumers expect to shop

When companies operate at this level of scale, they don’t just compete in the market.

They reshape it.

Do they ever falter? Of course.

Walmart has had periods of slumping sales, uneven customer experience, and assortment challenges. Reinvention has been part of its story.

Amazon, meanwhile, has experienced waves of layoffs and constant pressure to balance growth with profitability.

Even giants have their cycles.

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The Question for the Rest of Retail

The real question facing retailers today isn’t simply whether Amazon or Walmart wins the revenue race.

It’s how the rest of the industry competes in a world where two companies set the pace.

Retailers that succeed will do so by focusing on what these giants struggle to replicate:

• distinctive product
• curated assortments
• differentiated experiences
• community connection
• brand authority

Scale wins many battles.

But relevance still wins loyalty.

And in retail, loyalty is everything.

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Where It All Began

Perhaps the most remarkable part of this story is how recently much of it began.

Amazon started as an online bookstore just over 30 years ago.

Half the lifespan of Walmart.

Walmart opened its first store in Rogers, Arkansas in 1962, evolving from the Walton’s 5 & 10 concept and incorporating as Walmart two years later.

Barnes & Noble’s roots trace back to 1917.

Target opened its first store in 1962.

Kroger was founded in 1883.

Walgreens opened its first store in 1901.

Retail evolves.
Leaders change.
New giants emerge.

But the race for the coveted seat at the top never really ends.