How Walmart Is Betting Big On Stores To Catch Amazon In E-commerce
Walmart, the world's largest employer, with 2.3 million square feet of distribution centers and 4,700 locations across the United States, is aiming to catch up to Amazon in the e-commerce market. While Walmart dominates the in-store retail space, Amazon holds a substantial lead in e-commerce with a market share of 39.5 percent, compared to Walmart's 7 percent. The COVID-19 pandemic has accelerated the shift in consumer behavior towards online shopping, making Walmart's efforts to gain dominance in e-commerce paramount.
To bridge the gap, Walmart has implemented a new playbook and installed new leadership. They have built over 30 warehouses, some with robotic technology and dedicated staff, to fulfill online orders. Additionally, Walmart has transformed dozens of stores into micro-fulfillment centers, where workers pick and pack online orders. To compete with Amazon Prime, Walmart introduced its membership program, Walmart Plus, which offers perks such as free delivery and exclusive sales events. They have also heavily invested in local delivery programs, including using drones for faster and more efficient delivery.
Walmart is actively recruiting third-party sellers to increase its assortment of products and compete with Amazon's vast marketplace. They have opened their marketplace to international sellers, and partnerships with platforms like Shopify have allowed thousands of mom and pop sellers to join Walmart's online marketplace. Walmart's lower competition among sellers compared to Amazon has resulted in greater profitability for sellers on their platform.
The company is focusing on attracting sellers with exclusive deals and the opportunity to have their products on Walmart's brick-and-mortar shelves. Walmart allows sellers to pitch their products for space on their store shelves through a program called Open Call. This unique advantage of physical stores sets Walmart apart from Amazon, as customers can browse an extensive range of products online and have them delivered quickly or pick them up in-store within hours.
Walmart's substantial presence in groceries is another advantage over Amazon. With an 18 percent market share in the grocery sector, compared to Amazon's less than 1.5 percent, Walmart has established itself as a leader in this category. They are further leveraging their grocery expertise by offering services like in-fridge delivery, where Walmart employees enter customers' homes to deliver groceries and put them away in the fridge. This service has proven successful and is being expanded to reach 30 million homes.
Despite Walmart's efforts, catching up to Amazon in e-commerce will not happen overnight. However, with their focus on expanding their assortment, improving delivery services, and capitalizing on their vast network of physical stores, Walmart is gradually gaining market share and building customer loyalty.
- Online shopping
- Distribution centers
- Micro-fulfillment centers
- Walmart Plus
- Membership program
- Third-party sellers
- Brick-and-mortar stores
- Open Call
- In-fridge delivery
- Physical stores
- Delivery services
- Customer loyalty
Is Walmart's e-commerce market share catching up to Amazon?
- Walmart's e-commerce market share is significantly lower than Amazon's, but the company is gradually increasing its presence through strategic initiatives such as building warehouses and transforming stores into fulfillment centers.
How is Walmart attracting third-party sellers?
- Walmart has opened its marketplace to international sellers and partnered with platforms like Shopify to onboard thousands of mom and pop sellers. They also offer exclusive deals and the opportunity for sellers to have their products on Walmart's physical store shelves.
What advantages does Walmart have in the grocery market?
- Walmart is a dominant player in the grocery sector with an 18 percent market share, compared to Amazon's less than 1.5 percent. Their extensive physical store network, coupled with services like in-fridge delivery, sets them apart in this category.
How does Walmart's in-fridge delivery service work?
- Walmart employees enter customers' homes to deliver groceries and put them away in the fridge. This service provides convenience for customers who may be unable to go to the store themselves. It is currently being expanded to reach a larger customer base.