Wal-Mart’s second-quarter results make it crystal clear the retailer is committed to growing its e-commerce business, with Jet.com founder Marc Lore at the helm of it all.
Faced with the threat of Amazon encroaching on its turf, Wal-Mart has been rolling out initiatives like “easy reorder,” free two-day shipping with no membership required, and an online grocery service, which is slated to hit 1,100 Wal-Mart stores this year.
Unlike Amazon, Wal-Mart can use its physical stores to its advantage in order to grow digital sales, Cowen & Co. analyst Oliver Chen said in a note to clients Thursday.
Offerings like “ship-from-store,” discounted pick up in store and Wal-Mart’s associate delivery tests are “competitive weapons” that will help the traditionally brick-and-mortar retailer steal a larger share of the online market, Chen said.
Wal-Mart’s e-commerce sales grew an impressive 60 percent in the latest period, on top of last year’s 11.8 percent growth. However, this quarter’s pace was slightly slower than the first quarter, when e-commerce sales rose 63 percent. But prior to that, in the fourth quarter of last year, online sales were up 29 percent.
“I think one of the things I’m most excited about is that we continued to bring together what we are doing in the stores with what we are doing online,” Wal-Mart CFO Brett Biggs told CNBC.
Wal-Mart completed its acquisition of Jet.com last September, bringing Lore to head up Wal-Mart’s e-commerce division.
“We’re leveraging the strength of our stores,” Lore said on a call with media Thursday.
By increasing the number of items sold online, making key acquisitions in apparel and home categories and keeping prices low, Lore said Walmart.com is seeing growth in new customers, repeat customers and many customers repeating the same orders.
“Amazon is an unbelievably good competitor,” Walmart U.S. CEO Greg Foran said on the call. “It lifts our performance to do well. … In a market that is improving, you have to do better yourself.”
In its push to save shoppers time and money, Wal-Mart is now turning the tables on Amazon, giving the internet giant a run for its money.
Based on a survey of U.S. consumers’ desktop and mobile traffic, Amazon’s websites were the most visited in July, bringing in more than 180 million unique clicks, analytics monitor comScore found.
Then comes eBay and Wal-Mart, each pulling about 90 million unique visitors. Another traditional retailer, Target, falls into fifth place with nearly 48 million views, comScore said.
“The addition of firms like Moosejaw, Shoebuy, and Bonobos not only give Walmart more of a stake in the digital marketplace but also expand its reach into higher margin categories, niche areas, and more affluent shopper segments,” GlobalData Retail managing director Neil Saunders said in a note to clients.
“Acquisitions made a big contribution to this, but schemes like free two-day shipping and discounts for products collected in stores have also increased shopper numbers and encouraged more people to use Walmart.com.”
Looking ahead, Wal-Mart said speed of delivery is a top focus, as well as continuing to add more stock keeping units, or SKUs, to Wal-Mart’s website. The retailer will no doubt continue to leverage its vast portfolio of stores as pick-up destinations for shoppers — something Amazon can’t do.
“We don’t know what Amazon will do,” Foran said when asked about the Whole Foods deal. “We keep our eyes crossed on what a strong competitor does in the marketplace.”