Rakuten: Amazon's share of US e-commerce fell to 38.5% in June from 42.1% in January; Target's share grew from 2.2% to 3.5% and Walmart's from 4.2% to 5%
it's overwhelmed and unable to keep up. Now, it's losing business to competitors (Target, Walmart) that have nationwide brick & mortar fulfillment centers called “stores."https://www.washingtonpost.com / ... Geoffrey A. Fowler / @geoffreyfowler : Yep, I'm shopping less on Amazon, too. Shipping delays, out-of-stock items and worker safety concerns have cut Amazon's share of U.S. e-commerce to 38.5% in June from 42.1% in Jan. It's been a boon for Walmart & Target, report @greene & @abhabhattarai https://www.washingtonpost.com/ ... Abha Bhattarai / @abhabhattarai : New: Amazon's shipping delays and out-of-stock items left an opening for rivals like Walmart and Target to swoop in during the pandemic. with @greene https://www.washingtonpost.com/ ... Heather Kelly / @heatherkelly : Scrappy upstarts Target and Walmart are finally getting a chance to shine thanks to some Amazon stumbles, by @greene. https://www.washingtonpost.com/ ...
Context & Ripple Effects
This is the payoff of a shift flagged two months earlier, when Bloomberg reported that the pandemic was creating openings for Amazon rivals like Shopify, Target and Costco. The mechanism now has numbers attached: shipping delays, out-of-stocks and worker-safety concerns cost Amazon 3.6 points of share in six months, and stores are the reason — Target and Walmart turned their footprints into fulfillment centers while Amazon's strained warehouses couldn't keep pace.
The share loss also cuts against Amazon's own logistics bet. By mid-2019 it had moved delivery in-house, self-delivering around 48% of its own packages after the Postal Service handled most of them — vertical integration that gave it control until demand spiked past capacity.
First-order effects
- Walmart and Target capture the diverted demand immediately: Target nearly doubles its e-commerce share (2.2% to 3.5%) and Walmart adds almost a point (4.2% to 5%), both by routing orders through stores instead of congested warehouses.
- Amazon faces a compounding problem — every delayed or out-of-stock order pushes shoppers toward habits at rival retailers that may persist beyond the disruption.
Second-order effects
- The result narrows the gap that previously insulated Amazon: analysts had argued an antitrust case was hard because Amazon held only ~35% of e-commerce and was two-thirds the size of Walmart — a shrinking lead changes that arithmetic.
- Target and Walmart's store-based fulfillment becomes a template other brick-and-mortar retailers can copy, converting their biggest fixed cost into a same-day delivery advantage Amazon cannot replicate without new construction.
Third-order effects
- If store-as-fulfillment holds up post-pandemic, US e-commerce consolidates around retailers who own physical networks rather than pure-play platforms, pressuring Amazon to keep building distribution closer to customers — a push visible years later in its rural 24-hour delivery centers encroaching on Walmart's turf.
- A structurally lower Amazon e-commerce share also softens the monopoly narrative regulators would rely on, making market-share-based antitrust arguments harder to sustain even as Amazon's absolute business grows.
The trend: US e-commerce leadership is becoming a contest between warehouse-first and store-first fulfillment models, with physical retail footprints re-emerging as the sector's decisive asset.