Commentary

Walmart Banking On E-Commerce Boom

Walmart e-Commerce is thinking about lifting an idea from the digital ethosphere -- Reuters’ Alistair Barr and Jessica Wohl compare it to “crowd-sourcing” or the “sharing economy” in an exclusive this morning -- that would use its in-store customers to deliver packages to its online buyers.

“A plethora of start-ups now help people make money by renting out a spare room, a car, or even a cocktail dress, and Walmart would in effect be inviting people to rent out space in their vehicle and their willingness to deliver packages to others,” Barr and Wohl write. 

The idea is “at the brain-storming stage, but it’s possible in a year or two,” Jeff McAllister, SVP of Walmart U.S. innovations, tells the reporters, who point out that there would be many legal, regulatory and privacy bumps on the road to such a scheme getting implemented. Indeed, Engadget’s Steve Dent calls the concept “slightly insane” and “slightly skeevy” in separate paragraphs.

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But who knows? Maybe it’s a partial, if somewhat depressing, answer to the larger question posed in a New York Times Magazine article forthcoming in print this Sunday: “Do Millennials Stand a Chance in the Real World?” (A sidebar to Annie Lowery’s story posits that “1. The Millennials have developed an obsession with money. 2. Partly because they don’t have any.”)

Walmart’s e-commerce honchos briefed the media on other initiatives it has been undertaking at an event at its digital commerce headquarters in San Bruno, Calif., Tuesday. One definite development is that it “will be testing this summer an option for consumers to be able to order product on its website and then have it kept in a physical locker at the store so they can pick it up without having to wait in line or talk to a store clerk,” as the AP’s Anne D’Innocenzio reports. The test will be in about a dozen stores in an undisclosed market.

The company has also improved its “scan and go” shopping app “so customers can immediately download coupons personalized to them,” D’Innocenzio writes. Walmart expanded the app, which is available on iPhone now and Android soon, to about 200 stores in 12 new markets, Reuters reported last week. It also “lets you pay for things without taking them out of your shopping cart. Really!” comments Rick Dees on Rick.com. When you get to the self-pay area, you just cough up your credit card “and you’re out.” 

Make no mistake, Walmart’s digital expansion is both grand and frantic as it attempts “to stay relevant in the 21st century,” as Marcus Wohlsen puts it in Wired.” Over the past year and a half or so, Walmart has gone on a tech hiring frenzy,” Wohlsen reports in a piece titled “Why Walmart Wishes It Were a Startup.” 

“Its e-commerce operation now employs about 1,500 people, and the company expects to hire hundreds more in the near future, most of them in Northern California. These days, Walmart battles the Googles and Facebooks of Silicon Valley for engineering talent and sometimes wins.”

And, without going too deeply into competitive details, it’s also winning shoppers. 

“We’ve dramatically accelerated customer acquisition online,” Neil Ashe, CEO of Walmart global e-commerce told reporters. “We’ve got to be there. We weren’t there before and now we’re realizing the benefit of that.”

“The company is on pace to surpass $9 billion in online sales this year, and Ashe said about one-third of online traffic comes from mobile devices,” Heather Somerville divulges in the San Jose Mercury-News.

“The point, Mr. Ashe said,” writes the New York Times’ Claire Cain Miller, “is to offer Walmart products anywhere a consumer wants to shop…. What [Ashe] didn’t say is that Walmart is also fighting Amazon, the biggest online mall, which has been encroaching on its turf.

“At one point, responding to a reporter’s question about Amazon, Mr. Ashe asked, with a smile, “Who?”

Ashe was evidently less circumspect in an interview with Financial Times’ Barney Jopson, telling him, “We own what we own, and we’re going after what we don’t.” That means, as Jopson writes in his lede, that “Walmart is moving beyond its core low-income customers in its ecommerce business as the retailer challenges Amazon head-on by wooing better-off Americans.”

Amplifying on how they define that demographic, Joel Anderson, who is CEO of Walmart’s e-commerce business in the U.S., said: “Certainly we have the $30,000 to $60,000 [customer], but we also have the $60,000-plus and the $100,000-plus customer.”

All this chasing of the more affluent customer could prove to be an exercise in futility, of course, if Millennials -- materialistic as they may be in spirit and yearning -- aren’t able to bridge an “income gap” that threatens to become a “wealth gap,” as Lowery writes in the Times

Boomer parents everywhere, like Walmart executives, are watching with great interest.

1 comment about "Walmart Banking On E-Commerce Boom".
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  1. Robert McMath from New Product Showcase, March 28, 2013 at 3:17 p.m.

    I continue to write monthly for a publication in Taiwan, and was specifically requested to comment on Walmart vs Amazon here. Taiwan is VERY interested in activities here in the U.S. and the trends affecting us in all areas of commerce.

    RMM

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