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2019 Retail Pacesetters: Walmart pushes the digital envelope

BY Carol Radice

Having a four-spoke business strategy focused on price, assortment, access and experience has played a pivotal role in Walmart’s success. For the fiscal year ended Jan. 31, total revenue for the Bentonville, Ark.-based company was $514 billion. Its three operating segments include Walmart U.S., which operates retail stores in all 50 states; Walmart International, which comprises a variety of formats including digital retail; and Sam’s Club, its membership-based warehouse club format that operates in 48 states.

Combined, the retailer has more than 11,000 retail units under 58 banners in 27 countries and e-commerce websites in 10 countries. It employs more than two million people worldwide — including 1.5 million in the United States alone. The company plans to invest $2.7 billion during the next two years in higher wages, training and education for its associates and store management teams.

Under the leadership of Doug McMillon, Walmart steadily has broadened its consumer reach and sought out new online opportunities to drive growth. The plan already has begun to pay off. Walmart grew its U.S. e-commerce sales 43% in the fourth quarter of 2018. Some of its latest online acquisitions include Art.com, ModCloth, Moosejaw, Bonobos, Eloquii and Bare Necessities.

Retail analysts — among them Walter Loeb, president of Loeb Associates based in New York City — have said Walmart appears to be focusing its efforts on identifying specialty e-retailers, offering unique products and that are leaders in their respective categories. “This focus on expanding its presence online gives Walmart access to younger shoppers, many of whom may not shop their physical stores,” Loeb said.

In addition to buying existing online retailers, Walmart has started building its own brand online business. In 2018, it launched Allswell, featuring bedding and mattresses, which are sold under a separate website, AllswellHome.com.

Walmart continues to grow its innovative service offerings with an eye toward convenience. It is expanding the number of stores offering grocery pickup and introduced a grocery delivery service in 35-plus cities via a partnership with third-party delivery companies. After exceeding expectations, its Pickup Tower concept will be added into more stores, with the addition of lockers to accommodate larger items.

Understanding that consumers who want low prices also can be attracted to innovative and exclusive product offerings, Walmart is skilled at balancing the perception of an everyday-low-price format with offering fresh, on-trend products. They also know price-sensitive
shoppers are not one-dimensional, and just as easily can care about cost as their impact on the planet.

With that in mind, Walmart recently introduced a sustainability initiative to reduce the amount of plastic used within its store brand program that is expected to impact more than 30,000 items. The retailer also has partnered with celebrity couple Kristen Bell and Dax Shepard to launch Hello Bello, an affordably priced, premium plant-based line of products for babies.


This story is one of 20 profiles of retailers who are making a difference in the industry. To read more, click here

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