Amazon Is Spending $6.8 Billion to Manufacture Walmart’s Geography Advantage
Amazon needs more than faster warehouses to close Walmart’s delivery advantage. It may need to build and manufacture its own version of a neighborhood store network. Amazon knows this, and the digital retail giant is already acting on it strategically. Project Mercury, Amazon’s plan, reported on Wednesday (Sept. 16), to expand its same-day delivery hubs […] The post Amazon Is Spending $6.8…
Amazon plans to spend $6.8 billion to build its own network of neighborhood stores similar to Walmart's, in an effort to close the delivery advantage Walmart enjoys. Project Mercury, Amazon's strategic plan, aims to expand same-day delivery hubs from 85 to more than 1,000 by 2031, potentially increasing its same-day footprint tenfold and placing fast-delivery capacity within 10 miles of 80% of U.S. Prime members.
While Amazon currently lacks Walmart's 5,000 U.S. stores, the proposed hubs would stock roughly 90,000 high-velocity products, effectively manufacturing proximity through logistics infrastructure that Walmart already possesses. This shift underscores the growing importance of local inventory in determining immediate availability for consumers, particularly in high-frequency categories like groceries and household essentials.
As both companies invest in automation and software to enhance their fulfillment capabilities, the competition may shift from website size and assortment breadth to who owns the inventory closest to the customer when they need something immediately.
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