Amazon has recently surpassed Walmart to become the world’s largest retailer outside of China. Here’s how Amazon did it, and what you can take away from its success.

It took nearly three decades and a major pandemic to get there. However, Amazon has dethroned Walmart as the world’s largest retailer outside of China for the first time.

According to a report, Amazon sold more than $610 billion in goods in the 12 months ending in June, compared to $566 billion in sales by Walmart in the same period. Amazon’s rise is the result of founder Jeff Bezos’ long-term vision that the convenience of online shopping combined with home delivery would eventually triumph.

Let’s take a quick look at how the pandemic accelerated already-in-motion trends, and what business owners everywhere can learn from Amazon’s success.

Bezos has long claimed that e-commerce is the future. It’s one of the reasons Amazon invested heavily in Amazon Prime, which focuses on one-to-two-day delivery for a wide range of items.

In recent years, Wal-Mart has also invested heavily in its e-commerce offerings in an effort to compete with Amazon, while maintaining a stranglehold on physical retail. Walmart’s hybrid model appeared to have distinct advantages, such as allowing customers to see their products in person before purchasing them or try on clothes to ensure they fit.

But then the pandemic struck.

Although many customers were willing to shop online and then pick up their goods from a physical store such as Walmart, an increasing number of people embraced the safety and convenience offered by Amazon—which offered more goods delivered directly to the consumer’s doorstep.

In addition, to meet anticipated demand, Amazon doubled down on its strategy, adding hundreds of new warehouses and hiring hundreds of thousands of new employees. In other words, Amazon bet everything on its vision, and it paid off.

Walmart rose to prominence by perfecting its big-box retail model. It established a vast logistics network and managed it like a Formula One pit crew, resulting in cost savings that it passed on to customers.

Instead of competing with Walmart, Amazon focused on something completely different: making online shopping as convenient as possible, so that people would prefer it to going to a physical location.

But, aside from its emphasis on e-commerce, Amazon distinguishes itself from Walmart in another significant way. Almost all of Walmart’s sales are generated by its own inventory. Amazon has a large inventory as well, but its true success is dependent on third-party sellers who merely use Amazon as a platform to sell. Almost two million of these sellers sell on Amazon, accounting for more than half of all items sold.

What was the end result?

Amazon has lower overhead and even generates less revenue, but it makes more profit. And by altering the game in this way, Amazon has now emerged victorious.

So, what is in store for the future?

Consumer behavior will most likely continue to evolve as the current pandemic subsides. But what about the next pandemic, or other world-scale event? What about advancing technology in the areas of virtual and augmented reality? Will these cause the gap between Amazon and Walmart to continue to widen?