Walmart is taking the bull by the horns in its efforts to compete with Amazon, with a slew of rapid changes spearheaded by its head of domestic ecommerce Marc Lore, founder and CEO of Jet.com., Walmart is on its way there.
Steve Weber, CEO of nChannel said that even though they have to take on Amazon, the initiatives they’re taking would happen regardless.
Weber said that part of this is also Walmart trying to reinvent itself by appealing to a broader array of shoppers, not just being known as a low-cost leader.
Walmart CEO Doug McMillon said in a fourth quarter earnings call that as customer expectations continue to change rapidly, they will expect even more personalization and convenience in their shopping experience.
“We’re moving quickly to respond to the current opportunities as well as to innovate and transform the shopping experience for our customers in the future,” said McMillon.
Walmart saw strong growth in the first quarter of 2018, but particularly in ecommerce, where sales grew 63%. The majority of the growth was organic through Walmart.com, executives said.
Brett Briggs, Executive Vice President and CFO of Walmart, said during the Q4 call that Walmart’s integrated offerings mean customers are shopping with them through multiple channels. During the 2016 holiday season, its store pick up program, Pickup Today grew 27% over the prior year.
The program will tap into Jet.com’s “smart cart” technology which delivers savings by offering customer discounts at the checkout.
Connecting Online and In-Store
One of the advantages Walmart has over Amazon is its 4,800 U.S. stores, including 3,500 super centers, hundreds of which are used to ship online orders. It also recently began offering discounts to customers that pick up online orders in store. On the physical store side for Amazon, its Amazon Go is a trial program where scanners replace checkout lines and shoppers are automatically billed to their Prime account.
During the February earnings call McMillon talked about innovations in super centers in Florida and Texas where customers can use scan-and-go touchscreens and have access items on Walmart.com and virtual item displays.
McMillon said that during Cyber Weekend 2016, more than 70% of traffic was driven to Walmart.com through mobile.
While ecommerce continues to grow rapidly, Walmart is continuing to innovate in its brick-and-mortar stores, including initiatives like ordering groceries online and and in-store pickup.
“Rapid advances in technology mean we need to become more of a digital enterprise, and that’s what we’re doing,” said McMillon.
“What this [evolution] is a sign of is Walmart’s recognition that the old playbook won’t work, so they’ve decided to develop a new one,” said Mark Vandegrift, Vice President of Product Management for ChannelAdvisor. “They need to adjust as the shopper evolution continues and possibly accelerates.”
In the past year Walmart went on a shopping spree, acquiring several ecommerce retailers in an effort to up its online game.
The big one was the August 2016 acquisition of Jet.com for $3.3 billion. This was followed by three acquisitions this year: Shoebuy.com (January, $70 million) Moosejaw (February, $51 million) and ModCloth (March 2017). Before it was acquired, Jet.com purchased Hayneedle in March 2016 for an undisclosed sum. Walmart is currently in talks to add another top ecommerce brand, Bonobos, to its stable.
After the Jet.com acquisition, Walmart made the savvy move of naming its founder Marc Lore as CEO of its domestic ecommerce business.
“The acquisitions of ShoeBuy and Moosejaw, in addition to Hayneedle gave us immediate expertise and capabilities in new, more upscale categories of merchandise,” said McMillon in the earnings call.
By having Lore on board, McMillion said, Walmart has set up teams to accelerate integration efforts and leverage its strengths. This has included optimizing two fulfillment networks, utilizing scale…