Wal-Mart has big year of e-commerce investments planned to bring growth back to 40 percent
Investors of Wal-Mart have seen a cooling off of Wal-Mart and accredit it to the fact that Wal-Mart might be unable to stand on equal footings with Amazon, whose internet is all dominating. This resulted in a drastic drop in shares by 9 percent. Despite the fact, analysts and industry experts are of the opinion that Wal-Mart is planning several investments in its website as well as in e-commerce operations.
Oliver Chen of Cowen & Co. says that Wal-Mart is a well-established and colossal foundation and its strength lies in its technology.
Wal-Mart has been working tirelessly to bring itself at par with other companies, still, people take the value of its store fleet too lightly which distinguishes it from Amazon. For the achievement of more grocery orders and same-day deliveries, bricks and mortar will benefit Wal-Mart. Chen believes that the future of e-commerce is both physical and digital.
In addition, a decrease in the sales of e-commerce has been observed i.e. there is only 23 percent increase in the e-commerce sales which is comparatively lower than the 50 percent increase of sales of the previous quarter. In the prior two years, the increase was 60 percent.
Moreover, Jet.com has provided a lift to e-commerce for Wal-Mart. Since the acquisition of Jet.com Wal-Mart has started to move marketing spend on the millennial-centric upstart to reach younger shoppers directly via Walmart.com.
According to CEO Doug McMillon, Jet will not grow at the same pace like the early days but he is sure that it will adjust itself first then it will concentrate on specific markets and opportunities for its growth.
The company has adopted different strategies for its growth. One of them is the partnership with Hudson’s Bay-owned Lord & Taylor. This Spring will come up with a website with the focus on home goods and fashion. Furthermore, the cheap banner of the company is also going through a refresh these days.
Similarly, another strategy is that Wal-Mart is going to feature ‘smart cart’ technology through which the more people pack items together in a single box, the cheaper prices will be granted.
Besides, for the fulfilment of online grocery orders and delivery of those orders, Wal-Mart is transitioning more of its stores. Grocery is also expected to be one of Wal-Mart’s biggest areas of investment this year. Hence, Wal-Mart expects the e-commerce sales to grow 40 percent in the coming years.
In a nutshell, Wal-Mart can develop itself if it adopts some strategies from other companies like Amazon which are frequently preferred by customers. Wal-Mart can deliver its products at lower prices if it has to grow itself and attract more customers. Besides, it can improve its customer service and provide congenial selling environment.