E-commerce chief expects Walmart to ‘crush it’ over next two years

Discussion
Photo: Walmart
Oct 19, 2017
George Anderson

Bigger is better when it comes to online sales and operations. That was one of the messages delivered by Marc Lore, chief of Walmart’s e-commerce business in the U.S., at The Wall Street Journal’s D.Live technology conference earlier this week.

Mr. Lore said Walmart is reimagining what retail and e-commerce will look like in the years ahead and making investments on a wide scale to own that future.

“E-commerce is a scale game,” Mr. Lore told the Journal. “We’re looking at a lot of different things right now, everything, in every sector.”

Walmart has made a splash over the past year-plus with acquisitions that include Mr. Lore’s Jet.com, Bonobos, ModCloth, Moosejaw and ShoeBuy. It has also upped its omnichannel efforts with expanded in-store pickup efforts as well as pilots in home delivery using Uber and its own associates. Walmart recently announced the acquisition of Parcel, a same-day delivery service based in Brooklyn, NY.

The retailer has also engaged with Google to enable customers to order products by speaking to their Google Home device or a mobile phone that uses Google Assistant. Walmart’s customers will need to link their accounts with the retailer to Google Express to take advantage of voice ordering.

“People use it [voice activated tech] for weather, use it for transportation, a little bit of shopping,” Mr. Lore told CNET. “And I think many people are writing it off, saying it’s kind of clunky [or] I don’t think I’m going to shop that way.”

Mr. Lore does, however, see advancements in artificial intelligence over the next five to 10 years dramatically changing people’s attitudes about voice tech.

“You’re going to be able to talk to your car, your home, your phone in a very conversational way,” he said. When ordering, consumers will be able to talk with digital assistants similarly to how they would speak with a sales associate on the floor of a retail store.

Mr. Lore is bullish on his company’s prospects. He told attendees, according to TechCrunch, to expect the retailer to “crush it over the next two years,” adding that he “wouldn’t trade our position with anyone right now.”

DISCUSSION QUESTIONS: How important is scale to e-commerce success? What technology or other developments do you think will have the biggest impact on e-commerce operations over the next five to 10 years?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I think Mr. Lore is wise to stay out in front of voice tech because it’s so natural for consumers to ask for what they want."
"It is debatable as to who will be the ultimate winner between Walmart and Amazon, but hopefully it will be the consumer..."
"I don’t think e-commerce needs to scale. E-commerce needs to be an accelerant that allows your business to be multi-channel."

Join the Discussion!

18 Comments on "E-commerce chief expects Walmart to ‘crush it’ over next two years"


Sort by:   newest | oldest | most voted
Art Suriano
BrainTrust

I think Walmart is developing the combination of e-commerce and brick-and-mortar better than anyone. It makes sense for them to keep boosting and building their e-commerce business but they are not losing sight of their stores. What the article doesn’t mention is that Walmart has decided to open fewer new stores and is going to focus more on renovating existing stores, no doubt bringing in the right technology. I think Walmart is on track, understanding that the consumer of the future will use both internet and stores for different needs but that the experience must be the same. The experience will be based on convenience first followed by price, quality and service.

Charles Dimov
Guest

Scale is important, because people form habits. And the habit you want consumers to have is to come to your retail site. In this regard, if Walmart is right, then smaller retailers should look to be on marketplaces like Walmart’s (in addition to Amazon, eBay … ). This is always a good first step to getting the consumer to use the in-store pickup services (that drive even more sales)!

Chris Petersen, PhD.
BrainTrust

In just five years, Amazon + Alibaba + Google will control 40 percent of worldwide e-commerce. Given the lead article on Amazon’s growth and Prime penetration, consumers need a viable competitor whether they realize it or not.

Walmart is the one retailer out there with enough resources and capital to compete head to head with Amazon. With Marc Lore, they seem to have the right stuff and are making the right moves.

Ken Lonyai
BrainTrust

With perks like free/same-day shipping reducing margins, scale is obviously crucial to any large brand — maybe mom-and-pops too.

Walmart is recovering from two decades of complacency around digital commerce so now its need to scale quickly is undoubtedly more costly than if it scaled its m/e-commerce presence organically over the last two decades. Buying up brands and keeping them independent is not exactly scaling up. It is expanding overall digital revenues, but merely adding on somewhat disparate pieces. To truly scale, Walmart needs to increase basket size of existing customers, get more existing customers utilizing all channels, and add new customers.

That said, net profit is net profit. Where it comes from (Walmart or acquisitions) and the business phraseology to describe it really doesn’t matter much as long as profits keep growing sustainably.

Max Goldberg
Guest

E-commerce is vital to Walmart’s success. To small retailers, maybe not so much. If Walmart is going to stay competitive with Amazon, Target and others, it must invest heavily in e-commerce. Consumers expect no less. AI, electronic assistants, faster phones, and the constant adding of digital natives to the population will drive e-commerce growth.

Bob Amster
BrainTrust

Scale is important to Walmart in order to beat out Amazon and vice versa, but smaller e-commerce players can be successful either by piggybacking onto one of the giants’ resources and offerings through partnerships, or by what will become a wealth of third-party providers that will fill the gap between the scale of these retailers (small) and the scale they need in order to reduce costs and compete on speed (large). Much of the required size depends on the types of products for which the consumers are looking. I don’t see a Walmart customer shopping for a David Yurman bracelet on Walmart’s e-commerce websites.

Kim Garretson
Guest
1 year 11 months ago

Not mentioned, but interesting, is Walmart’s experiment to deliver groceries in-home where remote homeowners can unlock the door and watch via video while the delivery person enters the house and places perishables in the fridge. I like this quote from a Washington Post article: “‘This is a group of people who are already used to a certain level of intrusiveness,’ he said. ‘But God help the teenager playing hooky or the family dog who’s not expecting the delivery man.'”

Phil Chang
BrainTrust
Phil Chang
Retail Influencer, Speaker and Consultant
1 year 11 months ago

Walmart has done some really great things to keep up with Amazon. They’ve also made some amazing acquisitions this year — I can’t wait to see what happens with all of these acquisitions and how they change Walmart’s go-to-market strategy.

The “simple” innovations of creating consumer convenience in pickup have already upped the consumer experience, and allowed Walmart to reach a set of consumers that might otherwise choose a different format for shopping.

I don’t think e-commerce needs to scale. E-commerce needs to be an accelerant that allows your business to be multi-channel. Voice ordering shouldn’t have to stand on its own. To be successful it should have considerable impact on your business and be a visible difference, but it shouldn’t need to hit a critical scale. (just like any other component in your marketing plan!)

Zel Bianco
BrainTrust

Walmart will take advantage of their second mover status and continue to fight the good fight with Amazon. They can sometimes be more methodical about their plans and, yes, sometimes slower, but don’t count them out — ever. Let’s remember that Walmart went into rural areas all over the country first and continue to dominate that landscape in brick-and-mortar. Their e-commerce efforts will continue to support this strategy. This is critical because to do omnichannel well you need both, and Walmart does them well.

Unless Walmart decides to not deliver to remote areas, this plan will be a successful one. It is debatable as to who will be the ultimate winner between Walmart and Amazon, but hopefully it will be the consumer and we all will win.

Anne Howe
BrainTrust

I’m always impressed by Walmart for its ability to invest in trying and its willingness to fail. I think Mr. Lore is wise to stay out in front of voice tech because it’s so natural for consumers to ask for what they want. If Walmart can deliver, they will remain a solid player in retail for years to come.

Lee Kent
BrainTrust

I have been so impressed with Walmart lately and Marc Lore. They are definitely on the right track with e-commerce, AI and ML. But they can hardly rest on their laurels yet — it is time to focus on the store and especially their in-stocks. Inventory visibility still seems to plague them and if they can’t get this under control, scaling will be impossible. For my 2 cents.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
1 year 11 months ago

Data is the lifeblood of e-commerce. With artificial intelligence broadly, and machine learning specifically, that data will become even more valuable by applying speed and letting retailers separate from the pack through scale. Combining massive data and AI will be requirements to succeed. Scaling those capabilities across the widest swath of customers becomes a highly defensible moat around the overall “commerce” strategy that transcends physical and digital.

We are in the middle of the most intense data race ever. Consumer data is growing exponentially and remains largely untapped or trapped in company silos and in walled gardens. The future success of e-commerce and in all consumer-facing industries will turn on the insights derived from that data, in near real-time, so we can deliver personalized communications to our customers that make sense given what is happening in their lives. Being able to scale this new value proposition is as sure as you can get to being in the money.

Cynthia Holcomb
BrainTrust

I agree with you Mohamed. Unfortunately buzzwords like AI and ML have become like Kleenex is to tissue. Bottom line, lots of talk on retailers’ part, little meaningful action going on … in the current landscape of technology for technologies sake — FRENZY.

Mark Nicholson
Guest

When it comes to online and e-commerce, innovation is often the key to scaling. First-mover advantage, with the right idea, can also help. It’s going to require disruption, but they might have a shot over the next decade if they incorporate acquisitions in their growth plan.

A query in Google of indexed pages (site:walmart.com vs. site:amazon.com) shows Amazon has 98.6 million pages indexed, while Walmart has 12.4 million, with Amazon holding a little over 9 million in the top three spots, while Walmart has about 1.2 million. While Walmart wins offline, Amazon has a giant lead online within organic search and SEO that even the deep pockets of Walmart will have a very tough time competing with. This is an important channel and battlefront for any e-commerce business.

While Amazon accounts for 43 percent of U.S. online retail sales, Walmart’s online sales were reportedly up 60 percent recently, making them one of the few (or only) e-commerce competitors. If Walmart can keep momentum, they might compete in a decade.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
1 year 11 months ago

Scale is a big advantage in retail, as it offers significant competitive differentiation with lower costs and prices. Walmart has been laser-focused on expanding its e-commerce revenues through acquisitions, like Jet.com, and investing in Walmart.com with more capabilities and increasing its product breadth. They have also enhanced their omnichannel capabilities by offering more cross-channel capabilities such as buy online, pick-up in the store.

Using their stores as distribution centers for online transactions is a huge advantage, as they have a store within 10 miles of 90 percent of the U.S. population. Expanding the seller base on Walmart Marketplace is another opportunity area for Walmart to increase its e-commerce growth.

Regarding future technologies, voice-assisted shopping, AI, VR an AR will all play a role in the future growth of online sales for Walmart and other retailers. The key is finding ways to truly personalize the shopping experience with these technologies to drive broad adoption, instead of merely deploying them as a novel idea.

Cynthia Holcomb
BrainTrust

Remembering the intended customer is a human, a real person. Remembering relevant product, relevant to the retailer’s human customer is the retailer’s brand. Yes, humans are adaptive to new ways of doing things electronically. I hope retailers engaged in the current AI and ML technology frenzy remember the individual human as part of their technology equation.

Harley Feldman
BrainTrust

Scale is important to e-commerce as Walmart and Amazon are proving every day. Customers want to buy as many products as possible from the same source and want them delivered their preferred way. Only very large players can accomplish both objectives. Mr. Lore is on the right track mentioning voice as a key technology to make ordering easier. Add artificial intelligence to help the consumer get to the right product quickly by understanding what the consumer really wants, and the result is an assistant that gives the consumer the right result just by talking.

Cameron Conaway
Guest

Walmart is already crushing it on the e-commerce front, and all signs are pointing to them doing exactly as Marc Lore says they will do.

Their online sales grew by 63% in Q1 and by 60% in Q2, WalmartLabs is positioning the company as an AI leader and, as Art Suriano pointed out, they’re developing the offline-online customer experience better than anyone.

The next 5-10 years will be fascinating. Will the continued democratization of artificial intelligence allow smaller retailers to wrestle some of the power away from major players like Walmart and Amazon? If so, the current global e-commerce leaders may need to spend more time keeping tabs on the evolution of smaller retailers (so they can try to acquire them) if they want to keep crushing it.

wpDiscuz
Braintrust
"I think Mr. Lore is wise to stay out in front of voice tech because it’s so natural for consumers to ask for what they want."
"It is debatable as to who will be the ultimate winner between Walmart and Amazon, but hopefully it will be the consumer..."
"I don’t think e-commerce needs to scale. E-commerce needs to be an accelerant that allows your business to be multi-channel."

Take Our Instant Poll

How important is scale to e-commerce success?

View Results

Loading ... Loading ...