Walmart Expands Capabilities as Online Shopping and Traffic Grows

While many retailers struggled over the holidays, Walmart unwrapped rising revenue and e-commerce sales during the important holiday quarter. Revenue, excluding currency, increased 3% to $133.6 billion in retailer's fourth quarter 2016. Comparable store sales in the Walmart U.S. business grew 1.8%, driven by a 1.4% increase in customer traffic.

As the industry tries to adapt to a new omnichannel reality, Walmart has been accelerating its e-commerce growth after acquiring last year and bringing on Marc Lore as CEO of Walmart's U.S. e-commerce business.

"We saw strong growth this quarter in the Walmart U.S. e-commerce business with GMV and sales growth of 36% and 29%, respectively," said Brett Biggs, EVP and CFO.

The company also saw an uptick in its e-commerce business since its January 31 switch to free two-day shipping with a minimum order of $35. 

"Our integrated offering means customers are shopping with us through multiple channels. In fact, over the holidays, Pickup Today, which is available in Walmart U.S. stores, grew by 27% over last year," said Biggs.

Over the holidays, wait times were down for Pickup and the retailer is adding more items to Pickup Today.

"Customers love being able to order an item with an app and get it that day," explained CEO Doug McMillon.

Walmart said it is now the second-largest U.S. online retailer by revenue, one of the top three online retailers by traffic and its Walmart app is among the top three apps in retail.

Walmart is rolling out new capabilities in the Walmart app in March and a new store experience that allows customers to skip traditional service lines using “express lanes” in these areas. The app will now allow for easy refills of prescriptions and simplified money transferring where the shopper can fill out information on the app ahead of time instead of filling out paperwork in store. After using the app for either of these service shoppers will be able to use the “express lane” to move to the front of the line. The new capabilities are expected to be available in Walmart’s 4,700 stores by fall.

“These capabilities are the latest example of how we’re bringing together all of the conveniences of Walmart – great stores, convenient pickup, easy checkout and a top-notch app – to deliver one seamless shopping experience for customers,” said Daniel Eckert, SVP, Walmart Services.

Updates to the app aren’t surprising as mobile becomes increasingly important for Walmart. Black Friday weekend sales marked the first time the number of people shopping online surpassed people shopping in stores for Walmart, and over half did through mobile devices. Further, more than 70% of traffic to during Black Friday and Cyber Monday was driven by mobile. 

Inside the workforce, Walmart said new technology and apps are providing real-time information to improve its in-stock levels and better manage inventory, which is down 7% this quarter versus last year on a comp-store basis.

The company has also been experimenting with customer experience initiatives, opening two new Supercenters in Florida and Texas, with features like scan-and-go, touch-screens where customers can access more items on, virtual item displays, and an integrated Health & Wellness section.

Customer expectations continue to change rapidly, noted McMillon. "They will increasingly expect even more personalization and convenience in their shopping experience. We’re moving quickly to respond to the current opportunities as well as to innovate and transform the shopping experience for our customers in the future."