Amazon (NASDAQ:AMZN), has invested heavily in its expansion since it was a small book retailer that started out to become the global everything store it is now. Amazon can partially be blamed for the demise of several large retailers.Walmart (NYSE:WMT), isn't taking Amazon lightly. According to annual sales, Walmart is the largest retailer in the world. It is responding to Amazon's attempts to take over its business. Walmart is actually learning from Amazon's toolset. Here's how Walmart fights back.Walmart gives Amazon a taste.Walmart has made major changes in the way it invests capital. In 2015, Walmart had spent 60% of its capital investment budget to build new stores. Within 10 miles of 90%, there is now a Walmart. Walmart is now shifting its investment to improve processes and efficiency.A large portion of this will be used to expand its supply chain. Walmart's ecommerce business is now about twice as big as it was one year ago. It is expanding its fulfillment centers using the most recent technology to support this growth. As it automates where possible, and increases worker productivity in those jobs that cannot be automated, the improved efficiency can increase profit margins over time. Walmart could be the second-mover here, learning from Amazon what works well and what doesn’t.Groceries delivery is another area Walmart is taking lessons from Amazon. Walmart is looking into this service and sees it as an essential part of its customer services. Walmart's physical presence in America near 90% means that grocery delivery is an area where it can compete with the rest and has a good chance of sustaining its market share.Walmart is confident it can lead the industry in an area where Amazon dominates. In just a few quarters last fiscal year, third-party sales at Walmart increased by triple digits. It believes that it is well-placed to lead the market due to the volume of traffic it drives to its site. Walmart's profit margins will be greatly improved if it pulls off the feat.Is it enough?Walmart announced that it would increase capital spending by 40% to $14 Billion, up from $10 billion the year before. But that's still a small amount compared to the $45 billion Amazon spent over the past 12 months. However, it is important to remember that Walmart will spend more on retail. Amazon is investing in a wide range of areas, including cloud services, media content, retail and media content.It could also be argued that Amazon's web services business is the primary area of focus since it brings in the majority of its operating income. Walmart could be able to focus on its core business and not spend as much money to create a strong moat around it. Investors will be watching closely the battle between these giants in the industry.
