Walmart – the largest private employer in the U.S. – is boosting its e-commerce strategy with a set of initiatives designed to expand its product portfolio in the face of stiff competition with Amazon.
For the first time, the Arkansas-based retailer is also letting its merchants use its warehouses as well as its delivery and return services to fill orders from other platforms they sell on.
Walmart has an extensive physical store footprint that it's been able to leverage as it sells a wide selection of products, though it's been increasing its investment in its online marketplace as online sales continue to grow.
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"If Walmart's the place you go for everything, then it has to have everything customers want," Tom Ward, Walmart U.S. chief e-commerce officer, told FOX Business, adding that "the more items that we have, the more problems we can solve for a customer. The more they use the platform, the more they keep coming back to us."
Its added additional categories to Walmart Marketplace, an online platform that allows third-party sellers to list and sell their products on Walmart.com.
For one, the company added a Premium Beauty category where it will feature a multitude of new popular brands including T3, Beachwaver and COSRX, known for the coveted snail mucin product.
It also launched Resold at Walmart, where it will sell pre-owned items, including fashion electronics and sporting goods, from over 1,700 merchants as well as the Collector Shop, where customers can secure highly sought after collectibles.
The company's Multichannel Solutions program will let sellers use Walmart Fulfillment Services to fulfill orders from any e-commerce site through Walmart’s supply chain.
However, Walmart touted that it is offering "competitive rates averaging 15% lower than the competition," which is a tactic to drive up the number of sellers on their platform.
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Telsey Advisory Group Senior Managing Director Joe Feldman said that Walmart is working to create "a best in class marketplace that's similar to Amazon."
"Walmart's growth rate has been outpacing that of Amazon's core online business in North America for the past several quarters," Feldman said. But comparatively, Amazon has a much larger online business, he said. Walmart isn't even close to them yet, though it's not an apples to apples comparison, according to Feldman.
For instance, while Amazon's online business is larger, Feldman noted that Walmart's extensive physical footprint offers customers greater flexibility in purchasing options, whether they prefer delivery or curbside pickup.
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This is a feature that is more challenging for Amazon, which is why they are partnering with Whole Foods, for instance, to serve as a drop-off point for returns, according to Feldman.
Though its online platform is smaller, Walmart touted in its Tuesday announcement that Marketplace achieved more than 30% sales growth in each of the past four quarters, "significantly driving the retailer’s sustained e-commerce success." Last year, its global e-commerce sales surpassed $100 billion with its U.S. segment delivering double-digit growth for six consecutive quarters.
The company is seeking to capitalize off this growth.
"The great thing about the app and the site is that we have endless aisles and as we add more brands…more more depth of assortment in areas they [customers] love, like fashion, they just find fewer and fewer reasons to go anywhere else for their needs," Ward said.
Feldman believes that the latest upgrades to Walmart Marketplace will "boost market share and increase profitability" given that they are helping their "vendors reach customers better and more efficiently."
