Walmart is banking on e-commerce sales growth to hit 40% by 2019
Walmart is stepping up investments related to the “connected customer,” efforts that will drive strong e-commerce growth for the next fiscal year.
On Tuesday, the discount giant augmented its fiscal year 2019 guidance with an expectation that e-commerce sales growth in the United States will increase by a staggering 40% in the fiscal year ending January 2019. Walmart also predicts that consolidated net sales will grow at or above 3%, driven by comp-sales and e-commerce growth.
During Walmart’s annual investor day in Bentonville, Arkansas, Marc Lore, president of Walmart’s U.S. e-commerce business, revealed one project that will support this growth: a website redesign that will be revealed in the first quarter of next year, according to CNBC.
The company also plans to add 1,000 online grocery locations across its U.S. operation by the end of 2018.
With the acquisition of Jet.com in September 2016, the company has stepped up its e-commerce game by expanding its online assortment, adding two-day free shipping with no membership fee, and operating over 1,000 online grocery pickup locations. These efforts have contributed to both traffic and comp sales improvements, as well strong e-commerce growth over the past year.
The company credits its strong start in the e-commerce game to “the customer, who is more connected than ever and embracing tools that will save them both time and money,” said Walmart president and CEO Doug McMillon.
“We’re combining the accessibility of our stores with e-commerce to provide new and exciting ways for customers to shop,” he added. “I’m proud of the team we have in place, the work we have underway and how we are positioned for success in the future.”
To stay on track, Walmart.com plans to adopt Jet.com’s “smart-cart” system, a feature that offers shoppers cheaper prices if they pack more items together in one box, use a debit card when paying for purchases, or opt out of returns. The company is also committed to improving Walmart.com’s digital merchandising efforts, including aligning a team that will monitor the company’s website and rewrite item descriptions, among other tasks.
Walmart has already hired 250 specialists and is now bringing in about 50 each month, according to CNBC.
McMillon used the event to highlight Walmart’s global innovations, such as one-hour delivery from stores in China, commitments to sustainability, and service to communities, especially in times of disaster.
The company has also successfully invested in associates, empowering them to drive results and better serve customers. Specifically, the company is equipping associates “with training and technology so they will continue to innovate in our stores, clubs and through e-commerce to find ways to deliver an enjoyable shopping experience that is easy, fast, friendly and fun,” McMillon added.
Where the company is pulling back once again is new store openings. The discounter expects capital expenditures to be approximately $11 billion for fiscal years 2018 and 2019 focused mainly on store remodels and digital experiences vs. investing in new stores.
Overall, the company expects global unit growth of approximately 280 locations, including new, expanded and relocated units, for each of the fiscal years 2018 and 2019. Specifically, Walmart U.S. expects to open fewer than 15 Supercenters and fewer than 10 Neighborhood Markets in fiscal year 2019.
Walmart International expects to open approximately 255 new stores with a focus in key markets, such as Mexico and China. In addition, Walmart International will invest in fulfillment capabilities, according to the company.
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Report: Amazon still toying with selling drugs online
Amazon is deciding how to get a foothold into the multibillion-dollar prescription drug market.
The online giant is expected to make a decision before Thanksgiving of whether it will sell prescription drugs online. These details came from an email from Amazon, as well as a source familiar with the situation, according to CNBC.
If Amazon moves forward with this new offering, the company will begin expanding its senior team with drug supply chain experts. This is in addition to the dozens of people it has already hired and consulted with regarding its potential move into the pharmacy market. Among them is Amazon’s consumables team’s VP, Eric French, the report said.
According to an anonymous source, Amazon is still evaluating — and aware of — the complexities this segment presents, CNBC reported.
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