Amazon dominates industries from ecommerce to cloud services, but fierce competition continues to emerge in all sectors. As Amazon pursues growth into new verticals, long-standing rivals and upstarts alike are vying to limit its expansion.
In retail and digital entertainment, giants like Walmart and Netflix have the scale and customer loyalty to go head-to-head with Amazon. Meanwhile, Kroger and Disney are leveraging key advantages to carve out Amazon-proof niches.
Companies including Apple and Google even threaten Amazon’s crown jewels: its smart home ecosystem anchored by Alexa. As tech’s heavyweights clamor for customers’ attention at home, the voice assistant race has high stakes for market dominance.
This comprehensive guide explores the biggest brand names that have proven they can compete with the ecommerce juggernaut:
Walmart and Target: Retail Behemoths Battling for Ecommerce Market Share
Legacy retailers Walmart and Target have aggressively transitioned to omnichannel sales models focused on ecommerce growth. Leveraging thousands of well-located stores, they provide click-and-collect options that Amazon physical outlets can’t match.
However, while online revenue is soaring at over 30% annually for both companies, their 2021 ecommerce volume still paled against Amazon’s:
- Amazon ecommerce sales: $490 billion worldwide
- Walmart ecommerce sales: $73 billion worldwide
- Target ecommerce sales: $25 billion worldwide
Closing this nearly 5-to-1 sales gap will be a persistent challenge. But as two of America’s most-shopped retailers, each has paths to secure stronger market share against the ecommerce leader.
Walmart’s Scale Helps Match Amazon’s Pricing and Assortment
Will Walmart ever outpace Amazon in ecommerce? With over 10,500 stores worldwide and 2.3 million associates, few companies can match Walmart’s immense infrastructure for digital price wars and fast fulfillment.
Recent acquisitions like Bonobos, Modcloth, and Moosejaw have given Walmart premium digital brands to complement its staple consumer products. Walmart Marketplace also allows over 50,000 sellers to tap into its ecommerce ecosystem – creating an assortment closer to Amazon’s level.
Crucially, Walmart isn’t afraid to lose profits to drive online traffic with advertising and discounts. This strategy, plus convenient in-store and curbside pickup, has helped Walmart.com’s traffic surge past Amazon in recent years. In 2021, Walmart‘s website garnered roughly 2.3 billion monthly visitors versus 2 billion for Amazon.
Target Expands Same-Day Delivery and Leverages Physical Stores
Target has also rolled out free same-day services like Drive Up and Shipt to challenge Amazon. Now covering over 65% of Target stores, Drive Up saw sales grow by over 500% last year to reach nearly $9 billion. The service clearly resonates with time-pressed shoppers.
Meanwhile, Target’s 1,900+ locations give it delivery hubs within 10 miles of around 90% of the population. Customers have embraced in-store pickup, driving its digital comparable sales up 29% year-over-year – more than double the overall ecommerce market‘s growth.
Leveraging real estate other retailers would covet, Target aims to operate as both a brick-and-mortar and digital seller. The strategy is paying off in rising Target.com traffic – now up nearly 24% year-over-year.
Grocers Like Kroger and Instacart Hold Early Grocery Delivery Lead
While most associate Amazon primarily with ecommerce, the company has taken ambitious steps into online grocery ordering and delivery after acquiring Whole Foods in 2017. Leveraging this infrastructure and AmazonFresh branding, Amazon aims to capture leading share in the estimated $910 billion global grocery market.
However, major chains like Kroger have also boosted their ecommerce order volumes during the pandemic. Kroger‘s delivery service sales jumped 103% in 2021, fueling 22% growth in its total online sales. With 2,800 stores and dedicated fulfillment centers, Kroger can enable delivery to 90% of American households in under 2 hours.
Meanwhile, Whole Foods actually relies partially on third parties for expediting delivery orders. One example is grocery delivery provider Instacart – which handles pickup and shipping for over 7,000 supermarket locations beyond Whole Foods, including chains like Aldi and local independent grocers. Instacart has grown active customer accounts over 45% since 2020 to 73 million users.
Until Amazon can ramp its owned-infrastructure grocery delivery arm AmazonFresh to handle more of its own fulfillment, retailers leveraging Instacart appear well-positioned to limit its near-term capture of additional market share.
Netflix and Disney+ Threaten Amazon Prime Video’s Streaming Lead
In 2021, research firm eMarketer named Amazon Prime Video the most-used streaming service globally. But while Amazon was first to tie a major digital entertainment network to a broader membership program, Netflix and Disney+ present significant challenges today:
- Netflix global subscriptions (Q4 2021): 222 million
- Amazon Prime members engaging with video benefits (Dec 2021): 200 million
- Disney+ subscriptions (Q4 2021): 130 million
Roughly 175 million Prime subscribers actively use Prime Video, indicating Amazon still leads rivals in penetration. However, Netflix generates more revenue per user – posting $15 billion in 2021 streaming sales (69% of total company revenue) versus Amazon‘s estimated $31 billion. With hit franchises and exclusive rights, Netflix and Disney+ also threaten Amazon‘s ability to retain share of consumers‘ viewing time as streaming growth continues.
Netflix’s Content Budget and Originals Pipeline Can’t Be Matched
Spending an estimated $17 billion on content last year dwarfs Amazon Prime Video’s budget. With award-winning series like Squid Game joining established hits like Stranger Things and The Crown, Netflix seemingly has an endless pipeline of exclusive series that drive intense viewer loyalty and buzz.
Recent price hikes also show Netflix’s willingness to increase margins after expensive early battles with Amazon over streaming rights to shows like Downton Abbey. As viewing habits shift, especially among younger demographics drawn to Netflix programming, it is likely well-positioned to remain many households’ default streaming choice.
Disney+ Capitalizes on Marvel, Pixar, and Other Fan Favorite Franchises
Amazon has never managed to develop children’s programming or animated series that come close to the multi-generational appeal of Disney properties. Early investments in kids shows never took off like franchises later made hits through Disney+ releases, such as Frozen.
The Disney streaming bundle also provides the company ample room for further revenue growth. Almost a third of subscribers currently pay $7.99 monthly for Disney+ alone – well below Netflix‘s base pricing – while roughly half opt for Disney/Hulu/ESPN packages closer to $13.99.
With leading animation studios Pixar and DreamWorks under its umbrella plus the Star Wars universe and Marvel Cinematic Universe, Disney+ has cracked the code for capturing family attention spans. The strategy places Amazon Prime Video at increasing risk of losing one of streaming‘s most valuable demographics.
Competitors Gain Ground on Amazon Music Unlimited in Streaming Audio
When considering Amazon‘s media ecosystem that retains Prime members, streaming music is as vital as Prime Video. However, subscriber numbers reported by competitors Spotify and Apple Music indicate Amazon Music faces challenges making strides in this category.
- Spotify premium subscriptions (Q4 2021): 180 million
- Apple Music subscribers (2021 estimate): 78 million
- Amazon Music Unlimited subscribers (2021 estimate): 55 million
Amazon Music Unlimited has likely grown in 2022 on promotional offers bundling it with Prime subscriptions for no added cost. But with a catalog half the size of market leader Spotify‘s, Amazon lacks the pure music content breadth to appease listeners seeking deep album and playlist options spanning both major label and indie artist offerings.
On Apple Music, meanwhile, tighter iPhone ecosystem lock-in persists compared to Alexa smart speakers‘ lagging household adoption – indicating Prime members still have ample reason to subscribe to competitors for premium and exclusive artist content.
Alexa Trails Apple Siri and Google Assistant in Voice Controls
While Amazon touts Alexa-enabled devices now total over 100 million globally, Apple’s Siri and Google Assistant have each surpassed 1 billion activated. In the vital smart home device category, Amazon also trails market share estimates for Google Home and Apple HomeKit:
- Google Home devices in households: 30% share
- Amazon Alexa devices in households: 27% share
- Apple HomeKit devices in households: 22% share
Google Assistant’s speech recognition accuracy and support across Android and iOS systems present a formidable obstacle to Alexa’s wider adoption. Meanwhile, Apple continues leveraging Siri’s early mover advantage despite lacking a robust smart speaker line comparable to Echo devices.
Google Assistant Excelled Early in Battle for Smart Home Market
Available across mobile operating systems and now over 80 different smart device types, Google Assistant has been activated over 1.5 billion times and handles voice queries in over 90 countries. Features like continued conversation and knowledge graph integrations aid functionality.
Importantly, Google Assistant has maintained a multi-year lead in smart home device usage at around 30% household penetration in the U.S. With Google Nest Hubs and Nest Thermostats providing popular Integrations, Amazon faces significant ground to make up among owners wanting unified smart home management.
Siri Has Early-Mover Advantage, But Lacks Hardware Ecosystem
By tightly integrating Siri further into iOS functions rather than prioritizing Alexa-style smart speakers, Apple forgoes some smart device revenue. But with over 1 billion iOS devices now active globally, it retains a strong channel for its familiar voice assistant even as household adoption slows.
With Apple HomeKit now adapted by major internet-of-things device brands, expect Apple to focus Siri on becoming the interface guiding iPhone loyalists‘ connected lifestyles – including home security cameras, doorbells and entertainment controls. But significant market share loss seems inevitable given the relative lack of new Siri-powered hardware releases compared to Alexa and Google offerings catering to next-generation smart home automation growth.
Amazon Enters Pharmacy Market But Faces Stiff Competition
Amazon‘s 2018 purchase of online pharmacy service PillPack for $1 billion marked its entry into the prescription delivery business. But with around $360 billion in 2021 North American pharmacy revenue up for grabs, Amazon is running up against massive incumbents like CVS and Walgreens.
Walgreens already offers delivery services handling over 80% of US zip codes through partnerships with DoorDash and Instacart. Its 12,000+ store locations and 90,000 employees aid rapid nationwide growth.
Meanwhile CVS Health has launched same-day courier services from its 10,000 pharmacies and retail clinics. It also acquired healthcare provider Aetna in 2018, positioning it better supplying medications to Aetna‘s expansive customer base as part of integrated care.
The Epic Quest to Compete with One-Click Shopping
In disruptor fashion, Amazon entered and transformed industry after industry these last 25+ years. Its Prime program in particular has proven that consumers will pay more for services like free shipping that radically simplify buying processes – establishing new standards for unified retail experiences.
No singular shopping membership has fully matched the end-to-end ease of Amazon Prime and Alexa ecosystem reorders. But in key segments like big box retail, specialty groceries, pharmacies, and digital entertainment, major corporations retain advantages securing their market positions. Their expertise, partnerships, infrastructure investments, and customer data enable innovations minimizing Amazon encroachment.
For example: Walmart and Target‘s stores will enable click-and-collect ecommerce growth exceeding competitors lacking similar brick-and-mortar assets. Kroger and Instacart are positioned to cater specifically to grocery buyer preferences thanks to tightly focused operations Amazon simply can‘t replicate through Whole Foods expansion.
In entertainment, Netflix and Disney+ show that beloved content plus intuitive interfaces can drive viewership numbers rivaling Amazon‘s. And Apple plus Google dominate global voice assistant adoption, thanks to early operating system integration plus robust smart speaker and smart home ecosystems Amazon has struggled to match since Alexa‘s late arrival.
Analyzing Amazon‘s current empire, U.S. ecommerce amounts to around $490 billion total market value. If we size streaming entertainment at another $120 billion and pharmacy delivery around $100 billion domestic based on market data, Amazon likely holds 40-50% market share across these segments – translating to roughly $250 billion in category revenue.
Yet with another $5 trillion in retail spending up for grabs long-term plus fast-growing digital ad, web services, healthcare IT, and Internet-of-Things categories, competitors across the spectrum will continue taking shots establishing themselves as the preferred Amazon alternatives. Though no challenger today threatens immediate devastation of Amazon‘s diversified empire, its prime position definitely faces escalating tests retaining every market leadership crown claimed over the last 20+ years.
