Walmart and Amazon are in a neck-and-neck race over online sales and delivery to rural Americans

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America's biggest retail giants, Walmart and Amazon, are going head-to-head in a bid for online sales domination by delivering to rural areas "once deemed too remote or unprofitable," reports Anne d'Innocenzio of the Independent. "These sparsely populated regions, previously overlooked by major retailers, are now recognized as a significant source of untapped sales."

Walmart seems to have the upper hand because of the proximity of its brick-and-mortar stores to rural communities. D'Innocenzio explains, "Nearly half (45%) of its full-service Supercenters are located in towns with populations under 20,000."

Even with Walmart's edge, Amazon is betting speedy and accurate delivery will help it outperform the competition. D'Innocenzio reports, "Amazon last year invested $4 billion to bring same-day or next-day deliveries to 4,000 smaller cities, towns and rural communities."

Analysts at Morgan Stanley estimate the pot of money rural deliveries will generate rings in at $1 trillion in annual sales, d'Innocenzio explains. With that amount of revenue on the table, the race for the rural online consumer has "intensified."

Part of the reason rural and underserved delivery areas are now getting noticed is because of their changing demographics. D'Innocenzio adds, "This surge is partly driven by the increasing number of remote workers relocating to smaller towns and communities on the outskirts of metropolitan areas."

Until recently, delivering to a more remote address generally posed a problem for companies, who in turn relied on the U.S. Postal Service to go "the last mile" to reach the customer.

Now Walmart is using more delivery drones and robotics, paired with a new delivery mapping system to speed package fulfillment. D'Innocenzio reports, "The system replaced traditional service boundaries like ZIP codes, which can leave out small areas at the edges."

Amazon is taking a different approach by "setting up small delivery stations to serve a group of nearby communities based on travel drive time, customer demand, and delivery efficiency," d'Innocenzio adds.

Amazon aims to reach more customers with a $4 billion investment in rural services

Amazon expansion is expected to create over 100,000 jobs.
(Photo by Adobe Stock)

Amazon is investing $4 billion to expand their rural delivery services, according to the company's senior vice president of worldwide operations, Udit Madan.

The investment is meant to focus on small towns across the U.S. and bring faster delivery to “many millions of customers in less densely populated areas.” Madan wrote, “At a time where many logistics providers are backing away from serving rural customers because of cost to serve, we are stepping up our investment . . . .”

The online e-commerce website PYMNT reported that in 2024 Amazon had “leased, bought or announced plans for over 16 million square feet of new warehouse space in the U.S … adding to its existing footprint of about 413 million square feet of industrial real estate across the country.”

Madan said the expansion would mean more than 200 added delivery stations in rural areas.

Amazon said they want to support local businesses
while reaching customers in more rural areas.
(Photo by ANIRUDH, Unsplash)

“Local businesses like coffee shops and florists can deliver Amazon packages through the Hub Delivery program. Partners can make up to $27,000 in incremental income a year, and help deliver to our customers in smaller towns,” Madan wrote.

The rural investment will help the company reach new customers in 13,000 ZIP codes over a 1.2 million square mile area. The expansion will also create an estimated 100,000 or more new jobs in the company.