Contrary to what “People of Walmart” would have you believe, the big-box retailer isn’t just for one demographic of shoppers, and it’s trying to prove that by making a name for itself in the online marketplace world.
“It’s a misperception that the Walmart.com shopper is the same as the in-store shopper,” said David Spitz, CEO of ChannelAdvisor, which helps sellers market via marketplaces. “Walmart.com shoppers tend to be higher-income.”
Walmart’s marketplace offers size and scale that, if they don’t match those of Amazon, at least rival it. The company’s annual report showed that the website saw 92 million unique visitors per month.
Since launching third-party marketplaces in 2009, Walmart has added 50 million items to its assortment, most of them within the last year. It has entered and expanded partnerships with marketplace tech vendors to accelerate onboarding. According to eMarketer, it’s no coincidence that Walmart saw a 63 percent gain in Q1 sales and a 69 percent gain in total gross merchandise sales after the move.
However, that’s not necessarily what merchants see. Many remain hesitant to join forces with the retail giant, fearing it could hurt their shop’s identity.
“I won’t consider joining the Walmart platform at this time, as I think it will have a negative impact for my handmade brand,” said Kate, owner of S for Sparkle, a jewelry shop selling dainty, handmade accessories on Etsy and, soon, on Amazon Handmade.
“When I think of Walmart, I think of cheap quality and mass production,” Kate said. “I think it will work well for mass produced products on Walmart platform.” Conversely, she said, “Amazon’s branding seems focused on delivery efficiency. I’m excited to join this market place.”
For others, the incompatibility that gives them pause is not reputation; it’s system integration.
Weiner’s Ltd. and AllTravelSizes were invited to join the Walmart marketplace. But the companies would have to invest in third-party software to integrate their existing inventory control software with the Walmart and Jet platforms.
Justin Laxton, sales manager for the companies, said that both started selling on Amazon in March after an Amazon representative invited them. Since then, they’ve been mulling moves into Walmart and Jet.com, but even now with the invite in hand, they’re not sure it’s worth the trouble.
Shipping is another area where Amazon has Walmart beat. The eCommerce giant allows merchants to bulk ship their goods to the company’s warehouses, where they can be stocked and distributed by Amazon itself. Walmart offers no such thing, despite the potential of its 4,700 physical stores.
Yet many merchants have come to see what Walmart has been saying with its actions. As the company adds Bonobos, ModCloth, and Moosejaw to its virtual shelves, it’s clear that it’s trying to showcase a wider range of brands to attract a wider range of customers, and in some cases, it’s working.
“Consumers are starting to see Walmart in the same light as Amazon; as a marketplace that gives them all the freedom and flexibility to order without risk or liability,” said Mario Serna of WonderCostumes, which has had a shop on Amazon for seven years and joined Walmart’s marketplace about a year ago.
One of the things he appreciates most about Walmart’s marketplace is the stricter vetting process compared with Amazon, eBay and Etsy, where “any average Joe” can start a shop and drive down prices for more legitimate businesses. By contrast, Serna noted, Walmart looks for vendors to have a solid standing in other marketplaces, including proof of sales history and company documents that are only required by Amazon if merchants want to apply for a Pro account.
“The main thing we have noticed about Walmart is that they are trying to compete with Amazon’s customer service and claims policies,” Serna said.
Serna said that a year ago, WonderCostumes’ Walmart.com customers initially treated the platform like eBay: If they wanted to return something, they asked for approval and covered the shipping charges themselves (unless, of course, the product was defective or the vendor had made an error).
Now, said Serna, Walmart.com customers are expecting the same return service they’re used to from Amazon. They want return labels and full refunds, including shipping charges, regardless of the reason for the return. This isn’t great for WonderCostumes today, but Serna thinks it’ll pay off tomorrow.
“While this is not beneficial to our business in the short run, we know this is the reason that orders through Walmart are on the rise, and it may be the reason that it will eventually rival Amazon,” Serna said. “So, looking far ahead, Walmart may be another great place for a business to grow their sales outside their own websites and the other big marketplace names.”
Can Walmart give Amazon a run for its eCommerce money? Maybe, maybe not. Plenty of merchants have yet to even give Walmart.com a second thought, believing Amazon to be the ultimate destination for digital shoppers. Max Robinson of Fish Tank Bank says it’s “becoming the biggest search engine” and a better place for merchants to be discovered than Google. Sam Williamson of ScotlandShop agrees: “People seem to rely less and less on Google when they’re in ‘buying’ mode,” he said.
What Walmart has in the bag is that it can keep Amazon from gaining an eMonopoly, at least as an online marketplace.
“Online shopping is all about where people are going,” said Frank Poore, president and CEO of CommerceHub, which helps retailers and brands sell online. Brands like to (and should) diversify to protect themselves; they “don’t want to have too much concentration in any one channel.”