In recent months, Walmart’s shares have dropped 3.6%. In the last quarter of the year, Walmart e-Commerce has become the focus in the tough economy. Throughout the year, the company has redone their entire sales outlook.
At the beginning of fiscal year 2015, the company planned to have 3%-5% revenue. In reality, they are scheduled to have 2%-3% revenue. Walmart has already planned down for fiscal year 2016 at 2%-4% revenue. A recent article shows how greatly the company has changed.
Throughout the company’s lifetime, they have had strong growth. With the economy changing, Walmart’s revenue is hurting like many retail businesses. Consumers have become careful and more cautious in how they spend their money.
Walmart depends on the low to middle class system for their top line sales. But, the lower and middle class now face challenges that make it harder to purchase goods. They have reduced food stamps, stagnate wages, rising gas prices, delayed income tax refunds, and high payroll taxes.
Walmart e-Commerce is Financially Beneficial
As a focus turns on Walmart e-Commerce, they plan to invest $1.2-$1.5 billion. In fiscal year 2015, they planned to spend around $0.8 billion, and actually spent around $1 billion. These investments will go toward building new distribution centers and added new technology.
Walmart e-Commerce is planned to grow their revenue by 25% in fiscal year 2016. Between fiscal year 2016 and 2018, the company plans to grow by 30%-40%.
Walmart invests in e-Commerce because it is a nessecity for maintaining growth in the business. With less resources, consumers are looking for the easiest way to buy whatever they need.
The convince of online selling has become a trend for many companies. Instead of going into the store, consumers want the reliability, convince and ease of buying items in a few minutes. Walmart has relied too heavily on the fact that consumers will come into the store based on their name. Now, Walmart e-Commerce has to sell itself to the online consumer.