Amazon and Walmart. Walmart and Amazon. Separately and together, for better or worse, these megaretailers have transformed how Americans transact.

It’s the subject of a new book: “Winner Sells All: Amazon, Walmart and the Battle for Our Wallets.” Author Jason Del Rey says that in recent years, the two have been almost mirror images, with Walmart chasing online sales while Amazon opens physical stores. The following is an edited transcript of his conversation with Marketplace’s Meghan McCarty Carino.

Jason Del Rey: Maybe when I started covering these companies 10 years ago, I would have laughed at someone if they talked up the idea of Amazon opening stores. But over the last five to six years, they have. So as many people probably know, they did acquire Whole Foods back in 2017. I think that has not gone as well as they would have hoped. I shop at Whole Foods, but not superregularly. But I check in a lot because I cover these companies. And I don’t know that the experience is better than it was pre-Amazon. And there’s been other struggles there. They’ve then gone out and opened bookstores, which some people thought was either ironic or, I don’t know, awful, or some people thought it was cool, I guess. And they ended up shutting those down last year. They opened Amazon Fresh, their own grocery chain that was sort of more mass brand versus the higher-end brands like Whole Foods. They’ve now paused that expansion. And they also had some sort of funky stores called 4-Star, which were kind of a mix of a bunch of stuff found on Amazon that had ratings of, you guessed it, four stars at least. And so I think they went into the space thinking they can use technology as a key differentiator in physical retail, with sensors and cameras that would let you just walk out without paying. I think that’s been cool for some people, but if the experience in your store, the products aren’t quality or their perishables are not great or you’re out of stock, those are still things that matter more than anything in physical retail, and they have honestly failed so far in many ways in this space.

Meghan McCarty Carino: And is the aim there just to capture that final bit of market that still persists in going to brick-and-mortar and shopping in person?

Del Rey: You know, in some product categories, 80% to 85% of spending still happens in a physical store. So they want to grow, grow, grow. And they’ve somewhat saturated through their Amazon Prime memberships some of the online market that they’ve been in a long time. And so in one way, it’s a growth mechanism. In another, they want these facilities also to be pick-up-and-return facilities. I don’t know about you, but I know plenty of people who order eight different sizes of something because Amazon lets them ship them back for free. And that’s just not sustainable, even for a company like Amazon. So I think that’s another key piece of the puzzle, is the unsexy stuff that’s called reverse logistics.

McCarty Carino: How did the pandemic influence this competition?

Del Rey: The pandemic comes, and Walmart is finally forced to do something that Amazon executives have worried for decades they would do, which was to offer really, really robust pick-up services from their stores. So order online, pick up curbside, which became very popular everywhere during the pandemic. And they also started ramping up how much they deliver from their stores — basically using their stores as miniwarehouses, if you will. And that had long been a strategy that just for a variety of reasons internally was a challenge. But the pandemic forced them to piece a lot of this together. And they really, especially in online grocery industry, became really successful, sadly thanks to the destruction and the unease and the conditions that the pandemic had caused.

McCarty Carino: Amazon has also shed a lot of jobs, about 27,000 jobs. I’m wondering if that has benefited Walmart in any ways.

Del Rey: Walmart, in the last five to six years, has hired former Amazon executives into a series of key roles. Some, as you could read in my book, totally did not work for a variety of reasons and flamed out, but others are still there. I’ve seen them just in the last few months continue to be really aggressive in trying to hire from Amazon. They are different cultures, so that is a challenge — bringing folks into Walmart and into Bentonville, Arkansas, from Seattle, Washington, and Amazon’s headquarters. But what I’m seeing is them continue to see this as an opportunity. And it in many ways kind of makes sense.

McCarty Carino: And recently, Amazon has been making a big push into health care. How does that affect the ongoing battle with Walmart?

Del Rey: So they’re taking somewhat different approaches right now in terms of Amazon more of a concierge, high-end medical care service, Walmart pushing for accessibility as their main lever. But as Walmart executives told me, and former executives from both companies told me, they very well might be on a collision course as we’ve already seen them competing for the same startup acquisition targets in this space already.

McCarty Carino: Does health care seem like an area that consumers are going to be on board with, given some of the sentiment around Big Tech that’s been souring?

Del Rey: That’s a very fair question. I’ll start with Amazon. On one hand, there is this scrutiny and parts of the U.S. population that look at them with either disdain or fear and are not fans. Their brand is also still pretty beloved by other large sections of this population. And so I had one former Amazon executive tell me that even in his own shopping, he shops on Amazon a ton. But if it’s stuff that he puts in his body or on his skin, not clothing, but creams or stuff like that, that he doesn’t trust them. And so I think there are many people who may not trust them. But I think there’s a whole big portion that if the prices are right and the convenience is right, would move some spending and some care to them. I’m not sure I’m one of them. But I think it’s easy to forget when we hear all the criticisms of the company that a lot of people still really love them. For better or worse.

McCarty Carino: What might the future look like? Do you think either of them will continue to be the most dominant when we take into account some of the changing tastes and trends among emerging consumers, younger generations?

Del Rey: I think Amazon, I think they’re really at an inflection point here. And it’s not clear where they go from here. I think Walmart will continue to grow. I think they’re finally tying their stores and online together in a pretty successful way. That said, there are companies that could be the next, great, big company in this space. But if we look back in history, we look at the histories of companies like Sears, there’s a good bet that 20 years from now, we’re talking about someone else other than these two, whether they’re still growing or not.

More on this

In the latest round of Amazon and Walmart convergences: Walmart showed off its first Market Fulfillment Center in May, sort of an ultraefficient e-commerce warehouse in the model of Amazon but within a brick-and-mortar store location.

Amazon, meanwhile, announced a partnership with Staples stores, adding to a list of brick-and-mortar retailers, including Whole Foods and Kohl’s, where customers can drop off returns. Amazon also began offering select Prime members a $10 discount to pick up some purchases from a local hub rather than have them shipped, as the company tries to cut down on all those costly home deliveries it helped make ubiquitous.