eCommerce

A Cunning Plan For Walmart

Walmart is not giving up the race against Amazon just yet. A prominent Wall Street firm has laid out a plan for the number two ecommerce competitor, which leverages Walmart’s strong position in the grocery sector, its recent acquisition of Jet.com and its pharmacy, health and automotive product offerings.

Walmart is enjoying a resurgence reporting comparable sales growth in the U.S. for the eighth straight quarter, and beating out its rivals Target and Macy’s. Walmart’s eCommerce growth also accelerated by 12 percent, ending a run of slowdown for nine straight quarters, reports Fortune.

Even so, Walmart remains a long way behind Amazon and its online sales of $14 billion. Walmart is in the number two spot but only has one-six of the sales of its largest competitors.

Walmart is rallying, however, with initiatives such as expanding its online product range, offering grocery pickup at hundreds of additional stores, and acquiring Jet.com in late September, which provided technology resources and a younger, more digitally savvy customer base.

Doug McMillion, Wal-Mart Stores CEO was optimistic telling analysts that eCommerce growth could return to the level of 20 to 30 percent. “This company over time will look like an eCommerce company.”

Amazon Prime serves almost 50 million in the U.S. and is growing by 30 percent a year, making it difficult for Wal-Mart to make in-roads. However, 42% of Prime customers also shop at Walmart.com.

Cowen & Company, a respected Wall Street firm, presented a plan for Walmart to return to its previous growth levels. The plan includes a focus on customer convenience – Walmart launched a mobile payment app this summer and improved self-checkout. Sam’s Club recently introduced a “Scan & Go” app that lets members scan items they buy on their phone and checkout without a cashier, but Walmart has not yet implemented a similar payment model. Cowen & Company also noted that Walmart should leverage its pharmacy, health clinics and auto services, which differentiate it from its rival Amazon.

Another advantage for Walmart is the ubiquity of its store locations, which can facilitate shipping and customer pick-up of online orders. Also, Walmart’s grocery accounts for 55 percent of U.S. sales, and its dominant position in the grocery space along with supply chain advantages are a huge asset. The acquisition of Jet.com, its technology, and its younger, urban and more affluent customers should help Walmart to improve online pricing and gain market share.

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