At present, Walmart Inc (NYSE:WMT) sports just over 4,700 stores in the U.S. and it is relying on such a vast network to compete with Amazon Inc (NASDAQ:AMZN) in the e-commerce realm. This has helped the giant retailer deal with the plunge in online sales as consumers have returned to the store after Covid.
Q1 2022 hedge fund letters, conferences and more
A New Approach
Stores have a critical role in Walmart’s e-commerce business, according to Tom Ward, chief e-commerce officer for Walmart U.S. Ward told CNBC that the company uses its network to support its e-commerce business as it operates as platforms for delivery drones, automatic warehouses for online orders, and ports for direct-to-fridge drop-offs.
“The store is becoming a shoppable fulfillment center. And if the store acts like the fulfillment center, we can send those items the shortest distance in the fastest time.”
According to statistics, 90% of people in the U.S. live within 10 miles of a Walmart store, which makes delivery of online orders easier, especially in groceries, a category dominated by the retailer.
As, due to inflation, online purchases of clothing and other general items have declined and people spend more on groceries and gas, the company has a great opportunity to compete in the e-commerce business with Amazon.
E-Commerce
E-commerce has seen a significant decline as customers returned to stores. Amazon reported its slowest growth rate in almost two decades, while Walmart had a torrid first quarter this year.
Still, the retailer is determined to offer more products, boost customer experience and increase delivery routes to help its e-commerce business grow out of its 7% market share —where Amazon dominates with 39.5% market share.
To challenge the e-commerce giant, Ward asserts the company is betting hard on improving delivery speed via the immense network across the country.
This way, orders might arrive “in a handful of hours after they bought it online, as opposed to a couple of days later. So it’s a transformational experience in terms of speed, which is really hard to replicate without that fantastic footprint that we have.”
Its network allows Walmart to offer same-day deliveries to 80% of people in the U.S, which could also lure third-party sellers into the company’s delivery system.
