May 30, 2023


The following analysis compares the performance of Amazon, Walmart, and Target to each other and the overall market, provides a forecast for the balance of ‘23, and illustrates how eCommerce is contributing to overall growth.


We created the Stratably Index to combine the results of these three retailers in order to make useful comparisons to the U.S. Market, which is defined by published data from the U.S. Census.


The report is designed to clarify how these three important retailers are performing, the contribution from physical and digital channels, and what we can expect for the balance of 2023.


Most surprising to us after updating the analysis is the importance of eCommerce sales in driving growth and Amazon’s relative strength in the market.


  1. Amazon U.S. grew faster than Walmart U.S. and Target in 1Q23 (sixth quarter in a row)
  2. Stratably Index digital sales contributed 76% of 1Q23 dollar growth (highest rate since 1Q21)
  3. Stratably Index projected to grow faster than the Market in 2023 due to eCommerce strength
  4. Stratably raised its 2023 forecasts to reflect a better than expected 1Q23
  5. Both physical and digital channel forecasts for Walmart were raised given the strength in 1Q23

What stood out in 1Q23?

  • Better than expected sales: Retail sales were better than expected in 1Q23 when looking across these three large retailers, causing us to raise our forecasts for the balance of the year. Consumer staples category strength continues to drive growth, while general merchandise demand remains depressed. Most brands and retailers expect these category dynamics to continue throughout the year.
  • Consumer demand softening: Both Walmart and Target indicated consumer demand softened from February through April. This was supported by the U.S. Census monthly retail sales data which steadily decelerated through these months. Weakening demand was attributed to reduced SNAP benefits and tax refunds, poor Spring weather, and inflation weighing on consumers. This is keeping 2023 forecasts more muted than what would otherwise be expected.
  • Stratably’s Index outperforming the market: Amazon, Walmart and Target, when combined into Stratably’s Index, outpaced the U.S. Market as measured by the Census Bureau. These three retailers grew 8.8% Y/Y compared to 3.4% for the market. Amongst the three, Amazon grew at the fastest rate, benefiting from the overall tailwind of greater exposure to digital shopping.

  • Digital sales strength: While the pandemic did not catalyze ongoing exponential growth in eCommerce, it did drive a step-function increase in eCommerce of which digital penetration gains continue to build upon. Walmart’s digital sales accelerated (+27% Y/Y vs. +17% last quarter), and Amazon U.S. digital sales (+13% Y/Y) were better than projected. When looking at Walmart, Amazon and Target combined, digital contributed 76% of incremental dollar growth during the quarter, the highest level since 1Q21. While this number may seem high, Amazon’s contribution to the index is significant and nearly all of its growth comes from digital. Stratably Index digital sales growth of 14% compared to 4.1% for physical channels, the fourth quarter in a row where digital outpaced physical.

What can we expect for the balance of 2023?

  • Forecast changes: Stratably slightly raised its forecasts for the balance of the year to reflect strength in 1Q23 (50-75 basis points increase for Amazon, Walmart and Target). Stratably Index sales are now projected to grow 6.2% compared to Market sales growth of 3.7%. As part of these changes, we adjusted the mix of physical and digital sales for Walmart and Target to be closer to 50/50. This digital adjustment was mostly a function of raising in-store growth estimates, rather than reducing digital sales estimates.

  • Amazon growing the fastest: Unsurprisingly, we continue to project Amazon to grow faster than Walmart and Target. This is driven by Amazon’s greater exposure to the faster growing digital channel along with its leadership position in combining selection, competitive pricing, fast shipping, and its loyalty-driving Prime program.
  • Walmart forecast increased: Stratably increased its Walmart U.S. forecast following better than expected 1Q23 sales. This flowed through to increases in both physical and digital channels. The +19.2% forecast for digital channels compares to +11.8% Y/Y growth in sales last year, a meaningful acceleration driven by its multi-faceted omnichannel initiatives.
  • Digital handily outpacing physical channels: The Stratably Index anticipates digital outpacing physical channels by approximately 5x. This is heavily influenced by Amazon, which accounts for 44% of the Index and nearly all of its growth comes from digital channels. This digital:physical comparison might be shocking to some that have read headlines around shoppers “returning to stores in droves” and/or “a return to trend line for digital penetration”.


  • Digital’s contribution to total growth back to normal: We project the U.S. market to see 41% of its year-over-year dollar growth in 2023 to come from digital channels, compared to 15% over the last two years. For Amazon, Walmart, and Target combined, digital growth is projected to account for 83% of the total, driven by Amazon’s dominance in the Index. Walmart and Target are projected to see 55% and 49% of their dollar growth to come from online channels, respectively, outpacing the broader market. These contribution rates are more typical to what was occuring prior to the pandemic compared to three years of volatile results.