Executive Briefings

Wal-Mart Says Its Online Sales Will Explode Next Year Amid War With Amazon

Wal-Mart expects little abatement in the pace of its torrid e-commerce growth next year, and the retailer's latest forecast sent shares up 2 percent on Tuesday.

The world's largest retailer, for years slow to respond to Amazon.com in the digital wars, has been on a tear in recent quarters, helped by the $3bn acquisition of jet.com and overhaul of its marketplace last year, and by better integration of its stores with its digital business. The result was a 60-percent growth in U.S. e-commerce sales at its namesake chain last quarter.

And Wal-Mart says domestic e-commerce sales should rise 40 percent in the fiscal year ending in early 2019. Last year, Wal-Mart tapped jet.com CEO Marc Lore to head up its U.S. efforts after online sales growth had slowed under his predecessor. The company has also been on a shopping spree, snapping up smaller e-commerce players like ModCloth, Moosejaw, and Bonobos.

“We’re combining the accessibility of our stores with e-commerce to provide new and exciting ways for customers to shop,” Wal-Mart Stores CEO Doug McMillan said in a statement ahead of the retailer’s annual investor meeting.

Wal-Mart had redoubled its efforts to integrate stores and digital, introducing initiatives such as offering shoppers discounts if they pick up an online order in a store, and introducing express lanes for drug prescription pick-up and merchandise returns. Wal-Mart now has grocery pick-up at 1,000 of its 4,700 U.S. stores, firepower that is essential as it competes with Amazon’s Prime Now and that retailer’s recent acquisition of Whole Foods Market, which gave it 300 new physical distribution points.

And bucking the trend in a retail industry where many rivals are paring their store fleets, Wal-Mart said it plans to open a few more stores: it expect to open fewer than 15 SuperCenters in the U.S. next year, a small uptick to be sure, but additional physical facilities to support its roughly $15bn a year e-commerce business.

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The world's largest retailer, for years slow to respond to Amazon.com in the digital wars, has been on a tear in recent quarters, helped by the $3bn acquisition of jet.com and overhaul of its marketplace last year, and by better integration of its stores with its digital business. The result was a 60-percent growth in U.S. e-commerce sales at its namesake chain last quarter.

And Wal-Mart says domestic e-commerce sales should rise 40 percent in the fiscal year ending in early 2019. Last year, Wal-Mart tapped jet.com CEO Marc Lore to head up its U.S. efforts after online sales growth had slowed under his predecessor. The company has also been on a shopping spree, snapping up smaller e-commerce players like ModCloth, Moosejaw, and Bonobos.

“We’re combining the accessibility of our stores with e-commerce to provide new and exciting ways for customers to shop,” Wal-Mart Stores CEO Doug McMillan said in a statement ahead of the retailer’s annual investor meeting.

Wal-Mart had redoubled its efforts to integrate stores and digital, introducing initiatives such as offering shoppers discounts if they pick up an online order in a store, and introducing express lanes for drug prescription pick-up and merchandise returns. Wal-Mart now has grocery pick-up at 1,000 of its 4,700 U.S. stores, firepower that is essential as it competes with Amazon’s Prime Now and that retailer’s recent acquisition of Whole Foods Market, which gave it 300 new physical distribution points.

And bucking the trend in a retail industry where many rivals are paring their store fleets, Wal-Mart said it plans to open a few more stores: it expect to open fewer than 15 SuperCenters in the U.S. next year, a small uptick to be sure, but additional physical facilities to support its roughly $15bn a year e-commerce business.

Read Full Article