Walmart’s strong retail media business may help it compete with Amazon: Soaring revenues and more advertisers than ever bode well for the big-box retailer’s future.

Big-Box Retailers and Legacy Department Stores Are Rethinking the Customer Experience. Big-box retailers are aggressively upgrading their beauty offerings to attract returning in-store shoppers and younger, digital-first consumers.

However, even if Amazon’s grocery expansion lures some shoppers away from big-box retailers and grocery stores, its physical presence is a tiny blip compared with its main competitors’ physical footprints: Walmart has more than 5,000 locations, Kroger nearly 2,800, and Target over 1,900.

Amid the carnage of bankruptcies, store closures, and massive layoffs in 2020, some retail companies actually fared very well. Adjustments to supply chains, product and service bundles, stocking and inventory, and customer service have been the keys to success for big-box retailers like Walmart, Target, and Best Buy. Others, such as Apple, lululemon athletica, Nike, and Starbucks, are focusing on innovating and modifying store experiences through digital integration, frictionless shopping, and atmospherics modified for a “new normal” of social distancing and sanitization.

Target’s increased focus on building its ecommerce business has been paying off. The big-box retailer, which used to rank No. 11 in the US in terms of ecommerce sales, has now surpassed three competitors to become No. 8. Our latest ranking of the nation’s top retailers by online sales shows strong growth for Target’s ecommerce business, while that of QVC and HSN owner Qurate Retail Group will decline.

The big-box retailer reported its member renewal rate was 91% in the US and Canada at the end of 2021 and 89% worldwide. Like Netflix, which also raised its prices this year, Amazon Prime is seeing its US expansion slow to a trickle: We forecast subscriber growth will drop to 2.0% by 2025 as the market approaches saturation, which could be another driving factor in Amazon’s decision to raise prices.

Leading big box retailers Walmart Inc. and Target will also see a significant shift to digital in the coming years. By 2025, 19% of Walmart’s grocery sales will occur online, while 22.3% of Target’s grocery sales will come from digital.

Several years of strong ecommerce growth (including a 143.8% sales increase in 2020) has transformed the big-box retailer into an ecommerce powerhouse. Target has risen quickly in the rankings, from being tied for 10th place in 2019 to fifth place this year. Carvana pulls into the No. 7 slot.

As the popularity of grocery click and collect grows, these big-box retailers are in a good position to continue riding the wave. The nongrocery-centric retailers in our set produced more mixed results. Macy’s produced strong growth, but many of its physical locations were closed for large portions of 2020 due to public health lockdowns, so its 2021 figures were coming off a low base.

Pent-up consumer demand for fashion and accessorizing will boost mall-based apparel retailers and department stores, while big box retailers will grab market share by meeting consumers’ needs across every shopping occasion. Brands and retailers that invest in and promote the right products while steering shoppers to the right channels will see the most benefit.

Big-box retailers with a strong multichannel presence benefited from heavy in-store spending and consumers’ increasing reliance on click and collect for ecommerce orders. The 2022 outlook is solid, but retailers will need to adapt to a fundamental realignment of the holiday shopping season.

The big-box retailer offered more features than anyone else in the most in-demand category: Memberships and Accounts. Target also offered eight of the 10 most in-demand features overall and the most in-demand feature in four out of five categories. It fell short with 22 features overall, compared with Instacart’s 23.

The news: Big-box retailers are bucking the decade-long trend of opening stores on Thanksgiving evening as an early kickoff for Black Friday. Target said it will make Thanksgiving Day closures a permanent policy. Other major stores like Walmart, Best Buy, and The Home Depot will close again this year but haven’t committed to a future plan yet, per the Wall Street Journal.

The expansion may even lure some Prime members away from big-box retailers and grocery stores, particularly with members-only discounts at Whole Foods locations.

Grounded in physical stores, these retailers have been investing in innovation to stay ahead of the competition on all fronts—whether it be Amazon, direct-to-consumer brands, or big-box retailers. Now they’re reaping the dividends. Amazon’s score of 57 placed it roughly in the middle of the pack, despite not yet having any physical stores for apparel.

Resumption of pre-pandemic shopping rituals like door-busting at big-box retailers and fashion-finding at malls will generate strong foot traffic. Mobile traffic will also spike on Black Friday as consumers prepare for in-store shopping trips and engage in showrooming while there. We expect online sales to increase 15.8% to $10.42 billion, assuming the No. 2 spending day position for the season.

Mass merchants, big-box retailers, and marketplaces will continue to dominate the top 15 retailer list. As joy spending takes hold, and consumers transition to discretionary product categories in 2021, it will be essential for these retailers, who carry a wide array of items, to highlight their products and brands to would-be buyers. Read Next.

"As for the smaller square footage at these stores, almost all big-box retailers are doing smaller store formats. It's easier to start small and then go big, versus the scaling back we're seeing now at chains like Target, Macy’s, and Bloomingdale’s.".

Watch for other big-box retailers, like Walmart, rolling out holiday shopping earlier this year and next.

Several US big-box retailers saw major growth in foot traffic last quarter, as consumers sensing a lull in the pandemic dared to shop in-store. Best Buy was far out ahead, with an astronomical increase of 190.0% year over year. This surge was likely propelled by The Bigger Deal Savings Event, its competing Amazon Prime Day promotion. More like this:. Report: Mcommerce Forecast 2021.

“There was a coordinated effort from the largest big-box retailers, like Walmart, Target, and Best Buy, to launch all of their sales early,” said Michelle Grant, senior manager of strategy and insights for retail and consumer goods at Salesforce.