Is Walmart on track to offer customers a seamless shopping experience?
Walmart’s management is feeling good about the investments the retailer has made in building its e-commerce business and linking it to its network of stores across the U.S. Yesterday, the chain announced that same-store sales had increased 1.4 percent year-over-year as store traffic improved. The company’s online sales jumped 63 percent, with most of the gains attributed to organic growth at walmart.com.
Speaking on an earnings call yesterday, Walmart CEO Doug McMillon said walmart.com’s business has benefited from recent initiatives, including free two-day shipping on millions of items sold on the site as well as added savings for customers who order online and pick up in-store.
Mr. McMillon said walmart.com continues to ramp up inventory, now with 50 million items available on the site. He sees the company’s 4,700 stores as a significant asset in growing the online business.
“Our stores are located within 10 miles of nearly 90 percent of the U.S. population, so this is convenient for many of our customers, and also saves them money when they order online and pick it up during their visit to our stores,” he said (via Seeking Alpha).
Walmart’s CEO also addressed the company’s “strategic e-commerce acquisitions” that were made to improve assortment and gain expertise in categories such as apparel and shoes.
“The acquisitions have received a lot of attention, but our plan in e-commerce is not to buy our way to success. The majority of our growth is and will be organic,” said Mr. McMillon. “The acquisitions are helping us speed some things up. So overall, we’re making progress in providing the seamless shopping experience our customer’s desire and we will keep moving along this journey.”
While Walmart’s results are encouraging, the company’s online business remains a distant second to Amazon.com.
Neil Saunders, managing director of GlobalData Retail, told The New York Times. “[Walmart] has underperformed in that area, so what we’re seeing now is really a catch-up to where it needs to be in order to more seriously compete with the likes of Amazon.”
- Walmart U.S. Q1 comps 1 grew 1.4% and Walmart U.S. eCommerce GMV grew 69%, Company reports Q1 FY18 diluted EPS of $1.00 – Walmart Stores, Inc.
- Wal-Mart Stores’ CEO Doug McMillon on Q1 2018 Results (Earnings Call Transcript) – Seeking Alpha
- Walmart reports a 63% rise online – The New York Times
DISCUSSION QUESTIONS: What is your take on Walmart’s earnings report as it relates to its e-commerce initiatives? Do you think Walmart is close to offering a seamless shopping experience to its customers?