Walmart’s online sales continue upward trend (WMT)

pulse

August 18, 2017 4:57 PM

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Walmartreportedcomparable-store sales growth of 1.8% year-over-year (YoY) for Q2 2017, while revenue increased 2.1% to $123.4 billion.

That boost in revenue is largely due to the retailer’s strong performance at its US e-commerce arm, which saw net sales and gross merchandise volume (GMV) grow 60% and 67%, respectively, YoY. This marks the secondstraightquarter in which Walmart saw 60%-plus growth in US e-commerce sales.

Walmart.com accounted for most of the retailer’s e-commerce growth in Q2,

To further boost online sales, Walmart plans to dedicate more efforts to its omnichannel strategy. Walmart is in a unique position to focus on convenience, as it has a brick-and-mortar store within 10 miles of approximately 90% of the US population, according to McMillion. The company has already introduced features like Easy Reorder, Scan & Go shopping, and click-and-collect pickup towers, which together aim to create a well-rounded omnichannel experience that leverages Walmart’s stores. The company intends to expand its pickup towers to 100 locations by the end of the year, and plans to test a variety of machine learning and analytic initiatives to further its omnichannel progress.

Brick-and-mortar retailers are caught on the wrong side of the digital shift in retail, with many stuck in a dangerous cycle of falling foot traffic, declining comparable-store sales, and increasing store closures. Over 8,600 retail stores could close this year in the US — more than the previous two years combined, brokerage firm Credit Suisse said in a recent report. Meanwhile, e-commerce pureplays are riding the rise of digital commerce to success — none more so than Amazon, which accounted for 53% of online sales growth in the US last year, according to Slice Intelligence.

In response, many brick-and-mortar retailers have started to use omnichannel fulfillment methods that leverage their store locations and in-store inventory in order to better compete in e-commerce. These omnichannel services, including ship-from-store and click-and-collect, can help retailers manage the transition to digital by:

However, few retailers have mastered these new fulfillment services. While these companies have spent years optimizing their supply chain and logistics networks for delivering goods to their stores or directly to customers’ doorsteps, most have yet to figure out how to profitably bring their store locations into the e-commerce delivery process.

Here are some of the key takeaways from the report: