What about Walmart’s e-commerce strategy?
Walmart’s e-commerce strategy has been widely perceived as a successful one, but it hasn’t been able to get even close to e-commerce mammoth, Amazon. Specialists agree that one major issue is that Walmart’s e-commerce is based mostly on groceries. Similarly, there’s one key issue that the company needs to address: the clash between physical sales and e-commerce.
Here we’ll go through the challenges Walmart is facing in its e-commerce strategy and what is it doing to overcome them.
Leaving the comfort zone
Walmart saw a 41 % e-commerce growth in the third quarter of the year, which was the best quarter of the year for them. Most of it came from groceries.
Even as these are good results, there’s a need to do better. GlobalData Retail noticed that the company saw a 5.4 % operative income decline.
How to improve the outcomes? By raising e-commerce sales in non-groceries. The company says it will focus on two areas to improve sales: home and fashion as they have the best potential for the retail mammoth to get new clients. The greatest burden Walmart faces is how people see it.
Most casual customers only see Walmart as a place to buy groceries and cheap products, but don’t see it as a place where they can find quality.
Still, results are generally positive and the company seems to go the right way to overcome them.
Which brings us to our next issue…
The clash between cultures
Walmart has kept its physical and e-commerce operations separate which has created power struggles between managers at both sides of the company. This is a clear issue to address.
Doug McMilllon, CEO of Walmart is attempting to turn the company into an “omnichannel retailer,” a way to say they’re trying to integrate both areas in such a way they can please customers whenever, wherever, and whoever they shop: they key is to offer a seamless experience for customers.
This is key for Walmart as Amazon takes 40 % of all e-commerce money in the US and is starting to move to take Walmart’s spot as top grocery e-commerce provider and Target’s strategy of opening smaller stores in large, urban areas, is bringing results. Smaller competitors such as Dollar General and Aldi are offering lower prices than Walmart. This means the retail giant is taking heavy fire on all fronts.
The good news? They’re holding on. The bad news? They have to adapt to keep it so.
Part of it is integrating both businesses into one, standardized strategy to offer a top-notch experience for clients. These processes are usually tough but necessary as any successful company must innovate and change constantly. It’s harmonizing two different mindsets: physical merchants prioritize profit per item while online merchants focus on giving the most precise product listing details.
In conclusion, Walmart is facing some serious challenges in its e-commerce strategy. We can’t say they’re not being successful because numbers say otherwise, but there are areas for improvement. Strong leadership is necessary to lead the company through the profound cultural changes it has to go through. Also, it’s needed so the company can change its image and increase its non-grocery sales.