Walmart is Betting on Stronger Online Sales for 2018
In preparation for its annual investor’s conference, retail giant Walmart hinted at a future when the company would be a strong competitor to Amazon, the absolute global leader in online sales and ecommerce operations.
Investors reacted very positively to the news, including a projection by Brett Briggs, Walmart’s Chief Financial Officer, who believes the company will see an increase of 40 percent in online sales over the next two years. By the end of the press conference, Walmart’s stock had gained 4.5 amidst heavy trading.
Ecommerce has thus far been a hit-and-miss affair for Walmart, the most recognized American brand in discount retail stores. The retail chain made a series of investments in digital assets around 2009 and 2010, but they did not work out as expected because they needed further development. At one point, Walmart was leading in online sales of digital music, particularly in the country and western genres; however, the company fell short of getting into the streaming revolution.
Now that the company intends to increase its ecommerce footprint in the next two years, some analysts are concerned about Walmart’s announcement as it relates to brick-and-mortar stores in the U.S. In 2018, the company will only expand by 10 Supercenters and 15 neighborhood stores; this is effectively a 50 percent reduction compared to the current pace of expansion.
Walmart has a clear advantage in terms of its large network of stores around the country; as the company continues to expand its e-commerce offerings, customers can pick up their orders at a store near their homes, schools or jobs. This added convenience is something that Amazon had considered when it evaluated the acquisition of gourmet supermarket chain Whole Foods earlier this year.
The Arkansas-based company has also announced that it is working with Google and its smart home automation division to develop voice apps for the Google Home smart speaker. The search engine giant has been slow to catch up to Amazon, the current leader of the smart speaker segment. While Google was more concerned about making its Home speaker a control center for smart appliances, Amazon expanded the online shopping functionality of its Echo speaker. Now that owners of Google Home devices are able to order Walmart items with by means of voice commands, the e-commerce world is going to get more interesting and competitive.
