Innovative Walmart an e-commerce force to be reckoned with
Walmart is now a major competitive force in e-commerce and is capable of capturing shopper share from Amazon and others, according to Neil Saunders, Managing Director at GlobalData Retail.
Saunders was speaking as Walmart reported better-than-expected earnings during the first quarter, with e-commerce sales in the US up 37%, driven by strong growth in online grocery and its home and fashion categories on Walmart.com.
"We're changing to enable more innovation, speed and productivity, and we're seeing it in our results,” said CEO Doug McMillon. “We're especially pleased with the combination of comparable sales growth from stores and e-commerce in the US. Our team is demonstrating an ability to serve customers today while building new capabilities for the future.”
Walmart is one of the best growing mature retailers in the online market, Saunders noted. This uplift has come from both new customers attracted by its improved shipping speeds and existing shoppers buying more as the company expands its services and online offer. “Pleasingly, many of these new customer acquisitions are coming from non-traditional Walmart segments including younger and more affluent shoppers,” he added.
Building a competitive edge with e-commerce, especially via delivery and collection services, could put pressure on margins in the short-term, but Walmart’s logistics capability and its use of stores as points of distribution give it a major advantage over other players in the market, particularly Amazon.
“It may be a mature and sizeable business, but it shows no signs of sluggishness or of reducing the pace of innovation and change,” Saunders concluded.