Inside Amazon and Walmart’s Billion-Dollar Race to Win the Last Mile

In environments like today’s, reactive operations might as well be useless ones. By the time they take effect, it is often already too late. As the news this week from both Amazon and Walmart spotlight, against the backdrop of today’s dynamic landscape, innovation must become hardwired into logistics and payments infrastructures in response to geopolitical and trade headwinds, technological acceleration and evolving consumer expectations. 

Walmart and Amazon are both doubling down on logistics, signaling a critical shift in how delivery infrastructure is viewed. No longer a cost center, it’s now a competitive differentiator.

Earlier this week, Walmart announced an expansion of its delivery network that will add 12 million more U.S. households to its service coverage. This leap is driven by a data-first approach, leveraging customer insights and AI to predict demand patterns and dynamically adjust fulfillment strategies. The move supports Walmart’s broader omnichannel vision, where convenience is paramount and friction is the enemy.

Not to be outdone, Amazon has unveiled a sweeping $15 billion investment to expand its U.S. logistics footprint. This includes up to 80 new warehouses and a further pivot into transportation with the addition of less-than-truckload (LTL) services for inbound shipments to its fulfillment centers. For a company already known for its delivery dominance, the initiative underscores Amazon’s intent to make speed and control even more central to its value proposition.

At the core of Amazon’s operational revamp is a deeper integration of artificial intelligence (AI) across customer-facing and back-end functions. CEO Andy Jassy recently noted that the company is working on more than 1,000 GenAI applications spanning shopping recommendations, product reviews and internal efficiencies.

Amazon’s robotics division is a particular focal point. From automated sortation to adaptive robotics, the aim is to streamline warehouse operations while improving worker safety. Robotics vice president Joseph Quinlivan described it as “building an entirely new culture of automation,” one where machine intelligence augments human potential.

However, even as retail giants embrace AI and expand logistics, they must navigate the complex web of global trade policy. New tariffs on Chinese goods are disrupting long-established supply chains and forcing hard decisions on pricing and procurement.

Amazon, for instance, has begun surveying its third-party sellers to assess the impact of tariffs on their businesses. CEO Jassy has acknowledged that consumers may bear the brunt of these costs, as sellers recalibrate to protect margins.

These pressures are being felt across the eCommerce spectrum. Fast-fashion platforms Shein and Temu are preparing to raise U.S. prices following the removal of the de minimis exemption, which had previously allowed them to avoid certain import duties. With tariffs now biting at the heart of price-sensitive retail categories, some businesses are introducing explicit fees to offset new costs.

This changing economic landscape is driving innovation in payments, where the mandate is clear: reduce friction and preserve value for both merchants and consumers. According to recent data from PYMNTS Intelligence, more than half of U.S. consumers now prefer digital wallets over traditional payment methods — a trend that shows no sign of slowing. As inflation and trade policy reshape pricing strategies, seamless digital payments are becoming an essential buffer, helping to maintain customer satisfaction even as costs rise.

Digital wallets also offer merchants a crucial source of data. With each tap, businesses gain insights into purchase behavior, enabling more precise marketing, inventory planning and loyalty rewards. In a high-stakes environment where every basis point matters, these marginal gains can drive meaningful competitive advantage.

The convergence of AI, logistics and payments is creating a new operating system for retail — one built for speed, adaptability and customer intimacy. For Walmart, Amazon and others at the vanguard, the strategy is not just about keeping up with change. It’s about steering into it, designing business models that thrive under complexity.

Retailers must harmonize AI tools with tariff strategies, payments innovations with logistics frameworks. The winners will be those who don’t just optimize the system, but reimagine it entirely.

In this moment of flux, the message is clear: the future of commerce won’t be delivered in a box — it will be built from the ground up, across networks, algorithms, and increasingly, from the wallets in our pockets. 

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