Retail

Walmart’s Marketplace Flexes Its Muscles

Can Walmart give Amazon a run for its eCommerce money? Probably not. But it can keep the eCommerce giant 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 “don’t want to have too much concentration in any one channel,” he said; they like to diversify to protect themselves.

Walmart’s marketplace offers size and scale that, if they don’t match Amazon’s, they will 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 past 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 retail sales and a 69 percent gain in total gross merchandise sales after the move.

That’s all great news for merchants who want to grow their online presence, and of course Walmart is happy about the bottom line. But the more subtle, and perhaps more significant, gains are cultural.

In terms of in-store shopping, the company has a reputation (see: People of Walmart), which gave some brands pause over joining the company’s online marketplace, as they wondered if the association would do more harm than good.

Yet many have come to see what the company has been saying with its actions. As it adds Bonobos, ModCloth and Moosejaw to its virtual shelves, it’s clear that Walmart is trying to showcase a wider range of brands to attract a wider range of customers.

“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.”

The big box chain still has room for improvement. Shipping is another area where Amazon has it beat, allowing 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.

Still, Walmart’s out-of-the-gate success in the space says that it’s not going down without a fight in the race against Amazon, and there are plenty of independent retailers there to cheer it on.

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