Amazon Tops 30% Market Share for Electronics

The retail sector in the United States is competitive, and Amazon has steadily gained ground, driven by a surge in discretionary spending.

According to the PYMNTS Intelligence Whole Paycheck Report, “Walmart or Amazon: Where Do Consumers Spend ‘Fun’ Money?,” discretionary spending covers “wants” rather than “needs.” It represents the products and services that consumers buy when they have disposable income, such as electronics, clothing, travel, dining out and other nonessential items. Amazon has become the preferred destination for many of these purchases, as consumers rely on the eCommerce giant for everything from electronics to apparel.

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In the last quarter of 2024, Amazon made inroads across multiple product categories, the report found. Amazon captured 30% of the total sales in the electronics and appliances sector. This dominance in the electronics market shows Amazon’s appeal to consumers who prioritize convenience, competitive pricing and fast shipping. The ease of browsing Amazon’s inventory, coupled with its one-click purchasing feature and rapid delivery options, has further solidified its role as a leader in discretionary spending.

Despite its strength in nonessential categories, Amazon has also seen modest but considerable growth in food and beverage sales, the report revealed. Although the company has historically struggled to compete with Walmart, the largest grocery retailer in the U.S., Amazon has been slowly chipping away at Walmart’s dominance.

In 2024, Amazon’s share of the total U.S. food and beverage market rose to 2.7%, up from 2.3% the previous year. This may seem like a small increase, but it’s indicative of Amazon’s larger strategy to expand beyond its traditional product categories and tap into the lucrative grocery market. Amazon’s steady growth in food and beverages signals the company is positioning itself as a serious competitor to Walmart, even in this essential category.

One factor driving Amazon’s expanding market share is its aggressive pricing strategies and personalized shopping experiences, the report found. The company has used large amounts of customer data to tailor recommendations and create targeted promotions, encouraging consumers to make more frequent purchases. Amazon’s advertising campaigns are another tool that helps keep the brand at the forefront of consumers’ minds, driving more traffic to its platform. Additionally, Amazon’s digital experience — combined with its product selection — gives the company an advantage over traditional brick-and-mortar retailers, especially in high-demand categories like electronics and appliances.

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Amazon’s growth contrasts with the performance of its main competitor, Walmart, according to the report. Despite its dominance in the grocery sector, Walmart has struggled to increase its share of total retail spending in recent years. For the year ending Jan. 31, 2025, Walmart’s share of the U.S. retail market was stagnant, with no notable spike in spending during the holiday season. This lack of growth is especially concerning given the typically strong sales period in the final months of the year. Walmart’s market share has remained relatively unchanged since the third quarter of 2020, hovering just under 7.6% of total consumer retail spending.

Walmart’s slowdown is opposite to Amazon’s upward trajectory. While Walmart has maintained its stronghold on groceries and other essential goods, it has struggled to attract shoppers for discretionary products such as electronics, apparel and home goods, per the report. The retailer’s eCommerce efforts, though growing, account for a fraction of its overall sales, leaving it at a disadvantage as consumers turn to online shopping for convenience and variety.

As Amazon continues to capture a larger share of discretionary spending, Walmart faces the challenge of adapting to the changing retail environment. While its consistent performance underscores its reliability as a go-to destination for everyday essentials, it highlights the broader trend of consumers favoring online platforms like Amazon for a more diverse shopping experience. The disparity in growth trajectories suggests Amazon is winning the battle for consumer dollars in nonessential categories, leaving Walmart to play catch-up in a digitally focused retail environment.

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