I think Walmart has a good shot at competing effectively, and I hope it does so, because Amazon having a monopoly on online retail is not in my long-term best interests.

That said, I don't think they have any sort of clear advantage, for two particular reasons:

First, from a technical perspective, they have some serious catching up to do before they can provide the same service level at the same scale. It is not clear from available information that they actually have the required technical competence as an organization.

Second, they have to deal with a reputation that's going to keep them out of many consideration sets: from my perspective, at least, Walmart merchandise is universally cheap crap whose low utility and/or high failure rate will end up costing me more in the long run. I don't trust them to quickly and painlessly make things right if an order is broken, disappointing, or missing. In contrast, Amazon has spent years building trust (on the assumption that the short-term cost of this quality of experience is a profitable investment in securing future business).

I have yet to encounter an adequate answer to "Why should I bother looking at walmart.com?", which I suspect is true for many others, and which I think is a serious threat to Walmart.