December 2019 Magazine

Walmart’s E-Commerce Strategy: Integrating Its Shopping Platforms

E-Commerce

by Courtney Lanning

In the age of digital shopping, the nation’s largest private employer is betting on e-commerce and using it to bring its various services and platforms together. Consumers have grown accustomed to click-and-order purchases; Walmart is working to adapt to that trend.

Dan Toporek is vice president of public relations and corporate communications at Walmart eCommerce. He says Walmart made a number of digital innovations in 2019, including moving to next-day free shipping (without needing a membership fee) and offering online grocery orders for pickup and delivery. It also launched a subscription service for unlimited grocery delivery.

And online grocery orders continue to expand, Tporek notes. Around 3,000 stores allow for grocery pickup, and about 1,400 stores offer delivery. On top of that, Walmart even launched a service where groceries can be placed at home in a kitchen or garage refrigerator much like top competitor Amazon. This service is available in three markets representing about 1 million people.

 Looking ahead to 2020, Walmart says it’ll work on expanding its marketplace, which carries items from third party sellers. There are currently around 75 million items for sale in the marketplace, according to Toporek.

Walmart’s media group works with suppliers to help them promote products through advertising channels. “That will continue to be a priority for us,” Toporek says.

Walmart will continue bringing together its omni-channel of shopping experiences across stores, its app and website. That’ll remain a heavy focus through 2020, according to the vice president.

“We’re constantly making the app more powerful and useful for customers while they’re in stores or at home,” Toporek says.

When it comes to e-commerce growth throughout 2019, CNBC reported Walmart’s e-commerce growth was up 41 percent during the third quarter with CEO Doug McMillon saying, “We’re making progress on many fronts, but we need to do more.”

The company aimed for 35 percent e-commerce growth this year and in the first and second quarters, hit 37 percent growth.

Toporek says Walmart will continue to aim for a 35 percent growth rate in e-commerce, and it’s a good rate compared to other players in retail or e-commerce.

Keith Anderson is senior vice president of Profitero, an e-commerce performance analytics company. He says the nation’s largest private employer is beginning to hit its stride with e-commerce growth outpacing the market in the third quarter of this year.

“Walmart’s conviction in quickly expanding pick-up service, playing to strengths in grocery and continuing to iterate and refine its customers’ experience has positioned it more competitively in this area,” Anderson says.

Earlier this year, Walmart unveiled plans for its new home office in Bentonville. Toporek says customers don’t think of Walmart as e-commerce or a store. It’s simply Walmart, one shopping entity.

The new home office will go along with the company’s goal of e-commerce and stores working tightly together. The new design will be a benefit for the whole company, not just e-commerce.

As Walmart continues with its hybrid approach of combining the benefits of physical stores with an online sales platform, Toporek points to services like grocery deliveries and pickup. He says no one can really offer those same services at Walmart’s scale because of the company’s large physical presence, especially in the United States.

Having fresh inventory in so many stores is a large advantage. “It really creates [an] opportunity to serve customers on a weekly basis.”

Amazon is another e-commerce giant, and Toporek says Walmart is aware of the new products and services the Seattle company releases.

“You always watch your competitors. We have a position that’s different than anyone else,” he says.

Walmart is focusing on leveraging physical locations in a unique way to create convenience for customers, be it ordering online, picking up in store or delivery at home.

As online sales trend upward, some customers might wonder if in-store locations will see an impact in the future. But Toporek says everyone is seeing the future right now.

Stores have gotten really good at not having excess inventory in the back, he says. “You’re able to start using more space to do things like packing online orders and picking and packing grocery.”

Stores have continued to be very successful, and it’s clear people want to continue shopping in stores, he says.

And with the free space provided from carrying a smarter inventory free of excess, those parts of stores can be used for new services.

Looking toward the future, Walmart will continue rolling out next-day shipping across the country. In August, that service was available in 75 percent of the U.S.

“It’s been really popular with customers,” Toporek says.

Technology moves fast, and Walmart is working to make sure its e-commerce strategy continues to provide convenience for customers shopping on the website, its stores or in the app.    

READ MORE: Walmart vs. Amazon: Clash of the Retail Titans

Leave a Comment