Walmart has 2 huge advantages that should terrify Amazon (WMT, AMZN)

Walmart is no longer playing catch-up with Amazon, according to Barclays.Walmart has shifted to "playing offense" against its biggest rival, and the retailer has two strengths giving it a key advantage: its physical stores and its grocery business."Walmart has an omni presence ' Amazon does not ' and Walmart can leverage its 3,522 USSupercenter units to gain a meaningful advantage over Amazon," analysts wrote in a research note published Wednesday.Walmart is already using its stores to get a leg-up over Amazon online. The retailer rolled out a new discount last weekonitems that shoppers buy online and then pick up in one of Walmart's4,700 stores ' including those 3,522 Supercenters. This cuts down on shipping costs for Walmart, and Walmart passes those savings on tocustomers.Walmart is also dominating Amazon when it comes to groceries, a category that Amazonentered in 2007 with the launch of a delivery grocery service called AmazonFresh.Amazon has been ramping up its investment in the category lately with plans to openphysical grocery stores, butWalmart is still farahead of Amazon in the grocery market, according toBarclays."Walmart dominates in food in the US with (for the most part) the most attractive prices in food retail nationally," analysts wrote. "Amazon has not yet solved for fresh, nor are price points in non-perishables attractive. In addition, pricing in non-perishables is fairly complicated and inconsistent ' a function of the fact that many items are from third party vendors."Walmart offers in-store pickup for groceries ordered online at 600 storesnationwide. That number will increase to 1,100 stores this year, according to the company.Walmart is also testinggrocery delivery in several markets."If Walmartcan solve for the last mile in fresh/food with simple, clear, and low pricing, Walmartwould leapfrog Amazon in food delivery," the analysts wrote.This would give Walmart an advantage in non-food categories, like general merchandise, as well, according to the analysts.Overall, the analysts estimate that Walmart's ecommerce sales grew 36% in the fourth quarter, compared to 20% growth for Amazon in the period."Walmart has clearly decided to not only aggressively address its ecommerce inadequacies ' the company appears to be trying to take Amazon head on," the analysts wrote.SEE ALSO:Walmart has a new kind of discount ' and it's impossible for Amazon to beatJoin the conversation about this storyNOW WATCH: People are outraged by a Pepsi ad starring Kendall Jenner ' here's how the company responded
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