Wal-Mart is putting its considerable muscle behind beefing up its e-commerce business.
In a week where Amazon officially overcame the Bentonville, Ark.-based company to become the world’s most valuable retailer by market capitalization, the big differentiator between the two companies remains its e-commerce presence.
Although Wal-Mart’s overall sales continue to dwarf Amazon’s, the opposite is true when it comes to online sales. In 2014, Amazon’s online sales were $89 billion, easily surpassing Wal-Mart’s $12.2 billion, according to Business Insider.
But Wal-Mart is not about to sit by and let Amazon eat its lunch when it comes to doing commerce in cyberspace.
In a presentation on Tuesday, Jane Ewing, senior vice president of business development for Wal-Mart U.S., said the company’s spirit of entrepreneurism and innovation is alive and well and it is striving to reach the goal recently articulated by its chief executive officer Douglas McMillon: to be the first to deliver a seamless shopping experience at scale.
Ewing said customers have proven that they don’t care which channel they use to shop, they simply seek a “consistent and great experience.”
With that in mind, she said Wal-Mart built a “stand-alone” e-commerce business and sales have doubled over the past three years.
Ewing said most of Wal-Mart’s customers use the Internet to do their research before visiting a store. And 80 percent of customers who use both online and in-store visits actually wind up spending more.
A key piece of the puzzle for Wal-Mart has been its mobile app, which Ewing said has been “very popular.”
But its primary use is to ”enhance the experience in-store,” she said, adding the customers use the app to research product ratings, scan gift registries, refill their medications or check prices to ensure they’ve gotten the lowest possible option.
Among the most successful offerings embraced by customers, she said, has been in-store pickup, which she said is a “hugely growing area.”
Wal-Mart is also investing heavily in its online grocery shopping, which she said will be available in more than 20 markets by the end of the year.
Part and parcel with this is the company’s experimentation of other customer-centric initiatives such as automated collection points for orders, drive-through pickups for groceries and pop-up pickup locations for other merchandise. In China, for example, the company is testing delivery to large apartment complexes so customers are spared having to visit a store to get their orders.
“There are lots of trials,” she said, pointing to the company’s sophisticated supply chain logistics as another leg up.
“It’s all about making it easier for the customer,” she said.
That includes the company’s newest request to use drones for home delivery, curbside pickup and warehouse inventories. Ewing said this is just one of the many strategies the company is testing and if it is approved, Wal-Mart will take the lessons learned from this strategy and decide if it’s worthwhile to roll out.
Whether it’s by providing drone deliveries or in-store pickup, Ewing said Wal-Mart’s primary focus, established by founder Sam Walton 53 years ago, remains the same: to offer affordable product to small-town America.
Today, 260 million customers visit one of its stores each week and the total amount of retail space it occupies could fill Manhattan 1.5 times, she said.
More than half of the U.S. population lives within three miles of one of its stores and the store appeals to a wide range of income levels.
She said that some months, Wal-Mart sells enough jeans to stretch the length of the U.S., but it continues to concentrate primarily on “getting basics right.” Providing basic activewear, sportswear, underwear, jeans and T-shirts is where Wal-Mart reigns.
But while knowing its strengths is key, evolution is essential, and Ewing said Wal-Mart will continue to work to make life easier for its customers, no matter what form that may take.
