4 Secrets to Walmart’s eCommerce Success That You Need to Know
By Tricia McKinnon
With 90% of the US population living within 10 miles of a Walmart, Walmart has had to focus outside of store expansion for growth. Within the last few years it has made significant investments in its eCommerce business to great success. Walmart’s US eCommerce sales were up 40% in 2018 which is slightly higher than the 37% growth in eCommerce sales that Amazon experienced in 2018. Last year Walmart also passed Apple to become the third largest online retailer in the US ahead of Apple.
Walmart’s strategy for accelerating the growth of its eCommerce business has primarily focused on targeting new customer segments, making online grocery shopping more convenient, selling popular brand names and adding personalization to its website. For any organization looking to bolster its eCommerce sales Walmart is becoming the one to watch. Here’s a page out of Walmart’s eCommerce playbook.
1. New customer segments. Walmart’s customer base falls within a lower to middle income demographic. To generate additional revenue it is targeting younger and higher income consumers. Since it would be challenging for Walmart to target that segment within its namesake brand it has acquired several brands including ModCloth and Bonobos in 2017. Both are digital natives and target millennials and higher income consumers. Walmart also acquired online marketplace jet.com in 2016. Speaking about the acquisition, Marc Lore, Walmart's head of US eCommerce said: “we really wanted to position Jet.com and push it more upmarket — really focus on the higher-income urban millennials".
Walmart also added a Lord & Taylor store on its website in 2018. Walmart calls this a “premium destination” for shoppers. This is good move for Lord & Taylor which only had 2.2 million unique visitors in April of 2018 a much smaller amount than the 101 million visitors on walmart.com. Continuing its shopping spree Walmart acquired Eloquii in 2018. Eloquii is a digitally native retailer that is focused on the fast-growing size 14+ market.
In the past Walmart made relatively few acquisitions but clearly it feels that it cannot hit its growth targets organically.
2. Winning with convenience. Walmart has also made a big bet on grocery pickup. It launched the service in 2014 and now more than 2,100 Walmart stores offer grocery pickup pick and that number will grow to 3,100 stores by the end of 2020. Offering grocery pickup provides shoppers with the ease of shopping digitally and the convenience of picking up purchases on the customer’s terms. Best Buy, is another retailer that has seen the benefits of offering this type of service with more than 40% of its online orders picked up in-store.
Walmart also offers free shipping when customers purchase $35 worth of merchandise or more. Previously Walmart offered a three-day shipping guarantee but in 2016 it brought that down to two days to compete with Amazon Prime. Free two-day shipping is now also available for merchandise sold on Walmart’s online marketplace.
3. A personalized online shopping experience. Last May Walmart relaunched its website with a new design and personalized content in order to drive growth of eCommerce sales. Shoppers now see trending items from their area when they are on the site’s home page. For example, mattresses made the list of trending items in Dallas and so did Chicago Cubs tumblers in Illinois.
Other retailers have seen success with personalized online shopping pages. After implementing region specific checkout pages L'Occitane saw a 15% increase in mobile sales. It also generated a 10% increase in sales after it showed customers locally trending items and sales.
Walmart.com also shows the customer’s local store profile and if services such as online grocery are available. The home page also shows customers when an online delivery is scheduled to arrive. Speaking about the personalization initiative Marc Lore, Walmart’s CEO of U.S. E-commerce said: “It just really kind of brings that [regional] flavor to life. “You want the site to make shopping faster and easier, and when you’re showing those items that customers are trending towards, you’re actually making a faster shopping journey for them, which is ultimately the goal.”
4. Brands that lead the way. Walmart’s purchase of jet.com also allows Walmart to tap into the market of big brands that do not want to sell on walmart.com. Jet.com is now selling Blue Apron meal kits and Nike merchandise. Walmart is certainly showing its belief that popular brand names will draw customer in and is quickly becoming a house of high value brand names which will likely be a key to future growth.