Wal-Mart E-Commerce Gains on Amazon, Staples

Wal-Mart Stores' sales last quarter grew at the slowest rate in five years, but the retail chain’s online shopping grew faster than Amazon's during 2013, placing it in the running to overtake Staples as the second largest online retailer during 2014.

 

Wal-Mart has invested heavily in the growing mobile and Internet shopping space, buying 12 e-commerce companies since 2011 to boost its customer services, while some brick-and-mortar stores adapted too late to online shopping and even went out of business. It’s good for Wal-Mart to boost its online shopping, but e-commerce still only accounts for 6.2 percent of total retail sales, according to the Department of Commerce.

 

During its second quarter, Wal-Mart said sales at its stores were relatively flat, and total revenue rose 0.8 percent to $114.96 billion, which fell short of analyst expectations. The company reported the lackluster profit was due to factors including the rising costs of health care, taxes, the use of food stamps instead of money by its customers, and a harsh winter that froze retail sales. A bright spot for the world’s largest retailer was the 27 percent growth of global e-commerce sales during the same quarter, matching an overall 30 percent growth for online shopping during 2013. Online shopping for Wal-Mart during its recent quarter was only 0.3 percent of its total online sales.

 

“Our goal is to bring physical and online shopping together; to build online shopping inside the world’s largest retailer,” says Wal-Mart spokesman Ravi Jariwala. “It gives customers flexibility on how to shop.”

 

Most Americans still buy products in stores, but online shopping gives businesses an edge by creating an opportunity to look for items and compare prices before driving to the store and making a purchase, says Leslie Hand, research director at International Data Corporation Retail Insights.

 

“Shopping patterns have changed as more and more the consumers have already figured out what they want when they get to the store,” Hand says. “Mobile shopping is a part of the expected retail experience now. Having a physical presence helps.”

 

Large retail stores including Macy’s, Staples, Nordstrom and Sears have each boosted e-commerce investments in recent years trying to add a digital level to the shopping experience that people still want from a brick-and-mortar store, Hand says. As a result of Wal-Mart’s vast resources and willingness to add new services like mobile shopping applications, the company is poised to overtake Staples as the second largest online retailer, placing it behind the top online retailer Amazon, Hand says.

 

Wal-Mart makes approximately half of its sales from groceries, so the company has followed Amazon into sales of online groceries. Amazon Prime Fresh offers same-day or next-morning delivery of grocery orders greater than $35 in San Francisco, Los Angeles and Seattle. Wal-Mart is testing sales of groceries through its Walmart To Go service in Denver, San Jose and San Francisco, offering free pickup to its Denver customers who order online and come to the store, Jariwala says.

 

“We're hearing from customers the free pickup process is saving customers a lot of time…What used to take an hour or more is now taking 5-10 minutes as they never even have to leave their vehicle,” Jariwala says.





From：http://www.usnews.com/news/articles/2014/05/19/wal-mart-e-commerce-gains-on-amazon-staples