Walmart Continues to Invest in Online Grocery

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Walmart Continues to Invest in Online Grocery

By Jamie Grill-Goodman - 11/25/2015
To improve store experience and digital capabilities, Wal-Mart Stores, Inc. is making a $1.2 billion planned investment in its people this year, which President, CEO & Director Doug McMillon said is by far the biggest driver of the company's decline in consolidated operating income.

"We will be the first to deliver a seamless shopping experience at scale," he said." No matter how you choose to shop with us, through your mobile device, online, in a store, or a combination, it will be fast and easy."

In its third quarter, Walmart made improvements to its U.S. supply chain capabilities, opening  a new e-commerce fulfillment center in Atlanta with more than 1 million ft² of space which is the company's fifth next-generation fulfillment center. Walmart also added 85 additional locations to its online grocery pickup service, bringing the total to almost 140 locations across 25 markets.

"As we build out our e-commerce capabilities we are deepening our digital relationships with our customers," he said. "We've accelerated our expansion of online grocery pickup and we've seen that customers who start using online grocery spent nearly 50% more than similar customers who shop only in stores. This is the customer we're going after. The shopper in our sweet spot who accesses Wal-Mart in multiple ways."

"I'm pleased with the innovation we're driving in e-commerce, led by online grocery, and I'm excited about the potential we have to access a broader customer segment," said Greg Foran, President and CEO of Wal-Mart U.S. "We continue to learn from our online grocery business in the U.K. as we test and roll out similar initiatives in Mexico and Canada and build a strong platform for growth in China."

In Canada, Walmart also recently began a partnership with 7/11, piloting grab-and-go lockers at some of the convenience stores in the greater Toronto area.
Walmart also began the chain-wide use of a mobile service that can tell the company when a customer is coming to pick up an online general merchandise order before they even walk into the store. In time for the holiday season, the company launched a new digital wish list that shoppers can build at home or by scanning items in a store and it expects more than 210 million visits to its app in November and December up from 18 million in 2012.

Sam's Club also took steps this quarter to deepen digital relationships with its members through club pickup, expanded mobile check-in capabilities and extended drive-through or curbside options. Sam's Club also soft launched its new website.


With leading retailers looking at every social channel as a potential purchase platform, the lines between media and retail are blurring. To find out more, join Sam's Club's Chief Member Officer Tracey Brown and other experts as they share how to enhance the physical store with digital content, why retail strategies must be delivered through search and explore a future were new innovations become shopping portals for tomorrow’s consumers in the "Path to Purchase: The Intersection of Content and Commerce" session at NRF's Big Show 2016. 


 

Walmart's earnings per share were $1.03 and the company posted total revenue of $117.4 billion.

"I want to highlight that on a constant currency basis, our total revenue would have been $122.4 billion," commented McMillon. "That's growth of $3.4 billion or 2.8% on a constant currency basis, which is solid growth. Even if the percentage doesn't sound high because we have such a large denominator, not many companies grow by this amount in a quarter. I call this out because I don't want the currency impacts to obscure the strength of our business. We are a growth company and we're growing."
 
During the third quarter, global e-commerce sales and GMB growth both came in at around 10%, due primarily to continued economic challenges in international markets including Brazil China and the U.K, according to the company. Overall, e-commerce sales contributed approximately 15 basis points to Walmart's comp. Overall in the third quarter reported net sales declined 11.4%. 

 

 

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