As 2026 approaches, retail giants Amazon and Walmart are redefining their competitive strategies by focusing on monetization layers that extend beyond traditional commerce. Their efforts emphasize not just operational excellence but also ecosystem control, aiming to dominate areas such as advertising, data management, artificial intelligence (AI)-driven services, and media distribution.
Both companies recognize that future growth hinges on controlling demand and consumer attention. While they share a common goal, their approaches diverge significantly. Walmart leverages its physical store presence to enhance customer experiences, envisioning stores as interactive hubs that merge shopping with media. In contrast, Amazon is well-positioned to invisibly integrate commerce into various digital environments, including content and AI interactions.
Strategic Developments in AI and Advertising
A major development this week was Amazon’s restructuring of its artificial general intelligence (AGI) division. The company consolidated its AI models, custom silicon, and quantum computing under the leadership of Peter DeSantis, a veteran of Amazon Web Services (AWS). This strategic shift follows the recent AWS re:Invent event, which highlighted new AI capabilities, including Nova models and Trainium chips. Analysts responded positively, with Bank of America forecasting an “agent-driven” future for enterprise operations.
This leadership change indicates Amazon’s intent to deeply embed AI across its various functions. The company aims not only to use AI but to define its role in areas like retail operations, advertising, and consumer engagement. According to PYMNTS Intelligence, 42% of shoppers utilized AI assistants during the Black Friday sales, showcasing the growing importance of AI in driving consumer decisions.
On December 16, Aidan Marcuss, vice president of Fire TV, announced a new partnership that allows Fire TV customers to access Instagram on their televisions. This initiative reflects Amazon’s ambition to create new interfaces for content discovery, further solidifying its presence in diverse consumer environments.
Walmart’s Retail Media Growth
Walmart’s recent performance highlights its success in the retail media landscape, with a remarkable 33% year-over-year growth in its U.S. retail media business. This growth rate is six times faster than the company’s overall revenue. Retail media and membership fees now contribute approximately one-third of Walmart’s operating income, indicating a significant shift in its revenue model.
Walmart’s advertising segment, Walmart Connect, demonstrated impressive growth, with U.S. advertising up 33% and global advertising increasing by 53%. These results come at a time when traditional digital platforms face regulatory challenges and consumer spending remains cautious. This performance underscores the advantages of Walmart’s first-party data, which is linked to real-world purchasing behavior.
The company’s retail media success signals a broader strategic evolution—Walmart is learning to monetize consumer intent rather than merely transactions. This layered approach to retail suggests a future where commerce serves as a foundation for more complex monetization strategies, mirroring Amazon’s development over the last decade.
As both Amazon and Walmart prepare for a rapidly changing retail landscape, their strategies reflect a common understanding: the future of retail will increasingly resemble platform ecosystems rather than traditional storefronts. With consumer behaviors continuing to evolve and AI reshaping how demand is generated, both companies are committed to adapting and refining their approaches in the coming year.
