Ecommerce Guide

Wal-Mart Focuses On Online Growth

To keep pace with the seismic shifts in retail that is seeing more and more people abandon bricks and mortar stores for the internet, Wal-Mart has been aggressively focusing on growing its online operations.

According to recent research from eMarketer Inc, whilst traditional in-store shopping is growing at less than 1% per year, ecommerce is expanding at a much quicker rate of over 16%. In the U.S., eMarketer Inc expects over $462 billion to be spent online in 2016 growing to over $789 billion in 2021.

Wal-Mart’s focusing on growing its online market share is perhaps not surprising in view of the recent predictions concerning Amazon’s growth. In a recent report from leading investment banking and asset management company Needham & Company, they predicted that Amazon’s market share of ecommerce sales in the United States will grow from 34% in 2017 to over 50% in 2021. Amazon Prime was given as the key driver in this growth:

“We believe Amazon’s established dominance in the U.S. is sustainable with Prime, mobile penetration and third-party growth,” said Needham senior analyst Kerry Rice.

Wal-Mart’s ecommerce growth strategy is multifaceted but acquisitions have been a key part. Perhaps the most key acquisition has been Jet.com Inc a smart shopping platform that allows its member sto shop online from various retailers. Walmart paid $3.3 billion. Speaking about the acquisition, CEO of leading retail software provider Mirakl Adrien Nussenbaum said: “It was a radical signal to everyone that the biggest retailer in the world was willing to put $3.3 billion into the [online] market.”

Other ways that Wal-Mart has been trying to increase its online operations include:

  • The acquisition of ModCloth, the online female fashion retailer co-founded by Susan Gregg Koger.
  • The acquisition of Shoebuy.com, the online footwear retailer
  • The acquisition of Moosejaw.com, the online outdoor apparel retailer
  • The growth of its own online virtual shelves going from 8 million items in 2016 to over 35 million items today.
  • An app that allows customers to see their previous Walmart purchases and reorder at the touch of a button
  • A groceries program that allows shoppers to order items online and then pick them up in their vehicle at their local store.
  • The launch of free two day deliveries for orders of over $35 at Jet.com, Walmart and many other of the group’s online retail sites.
  • Wal-Mart also sees the growth of omnichannel as important, with Walmart spokesperson Ravi Jariwala saying: “We believe the future of commerce is a blend of stores, online and mobile seamlessly coming together, allowing customers to shop how, when and where they want.”

Wal-Mart’s efforts to expand its online operations in the face of the growing dominance of Amazon does not seem to have fazed Amazon in any way though. Whilst not commenting directly on Walmart, Sally Fouts, Public Relations Director of Amazon said:

“We’ve had competition every day of our existence at Amazon and it’s never changed our approach. We obsess over customers and the things we believe customers will always care about — low prices, vast selection and fast delivery.”

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Scott Bretton

Scott Bretton

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