Walmart's E-Com Sales Jump 30% in Q1

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Walmart's E-Com Sales Jump 30% in Q1

By Jessica Binns - 05/20/2013
Walmart's investments in e-commerce yielded 30% channel growth during Q1 2013, company executives said last week. Beyond its online operations, the world's largest retailer is pouring resources into building a strong global compliance program and improving workforce efficiency.
 
"I have no doubt that we are making the right investments in [e-commerce] to differentiate ourselves and become a better Walmart," Mike Duke, president and CEO, said on a recent analyst call.  "With e-commerce sales growing more than 30% in the first quarter versus last year, these investments are paying off."
 
With more than 45 million U.S. visitors to walmart.com, growth and conversion are up, according to Simon. Walmart is the UK's second-largest Internet grocer and has the most web traffic in Brazil. Walmart's Neil Ashe, president and CEO of global e-commerce, "has assembled the talent necessary" to build on success in these large developing markets, especially with the acquisition of Yihaodian, an online grocer that's one of China's fastest-growing e-tailers.
 
Walmart's e-commerce investments primarily will strengthen its global technology platform and next-gen fulfillment networks, Charles Holley, CFO, added.
 
The growing online business also advances Walmart's multichannel operations. "Our e-commerce strategy complements a growing real estate portfolio," added president Bill Simon. "We're in a unique position to serve our customers whenever and wherever they want to shop, integrating our walmart.com capabilities with an expanding presence of supercenters and small formats."
 
Among Walmart's top priorities is expanding its Ship from Store program, leveraging its physical footprint as an additional fulfillment asset. "We're currently shipping certain orders from 35 stores straight to customers' homes," Simon said.
 
The retailer's Scan & Go self-service checkout initiative expanded in the first quarter, with 38% more stores offering the mobile-based convenience feature, Simon said. "Customer response has been positive, with utilization across the chain up over 300 basis points year over year."
 
Doug McMillon, CEO and president of Walmart International, said the retailer is developing a strong compliance program. "Our comprehensive program spans 14 different compliance dimensions that address areas from ethical sourcing to licenses and permits," he explained. "We are strengthening what already existed in each market, adding subject matter expertise, significant investments in talent, process, systems, and training."
 
To improve workforce productivity and efficiency, Walmart has implemented MyGuide and OneTouch, projects which streamline moving merchandise from truck to shelf and prioritizing associates' workload, said Simon, yielding a 3% increased in cases handled per work hour in Q1 2013. "There are a number of metrics we monitor to ensure strong operational execution, including customer line lengths, customer experience scores, and merchandise in-stock levels."
 
While Walmart's net sales rose 1% to $113.billion, the company's support and corporate costs inched higher during Q1, mostly due to investments in global e-commerce, increasing compliance costs, and "leverage initiatives," Duke said, with the remainder going toward improving enterprise information management, leveraging its scale and developing global capabilities.
 
Sam's Club performed well for the quarter, with $12.2 billion in sales coming out slightly higher than Q1 2012.
 
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