Fashion has long been one of brick-and-mortar giant Walmart’s many major businesses, supporting the retailer’s massive food business.
But apparel is now at the center of e-commerce, the next big growth vector for retailers.
WWD details
When Executive Vice President and Chief Financial Officer John David Rainey attended the Morgan Stanley Global Consumer and Retail Conference on Wednesday, the first question he asked was about online operations.
“E-commerce is one of the real bright spots in our business,” Rainey says.
Walmart US sales rose 4.4% to $109 billion in the third quarter, while e-commerce grew 24%. The company’s related advertising business, which uses its platform to sell brand exposure, also grew 26%.
“What’s probably different about Walmart today than it was a few years ago is that our value proposition is right,” Rainey said. “It’s more than just price and value. It’s also about convenience. We see that in our customer behavior. We see it in our customer surveys. And perhaps most distinctive in this regard, our e-commerce That’s what we’ve seen with online pickup and delivery being the biggest driver of growth.”
While many companies saw online sales growth peak during the pandemic and then slow, Walmart has maintained an accelerated growth rate, the CFO said.
“In many ways, we’re just serving our customers.” [the way] They want to be served,” he said. “While we are known as a brick-and-mortar retailer and have been doing so for 60 years, we have outperformed ourselves in the e-commerce space.”
Walmart has managed to take a page out of Amazon’s playbook, offering a marketplace platform where it not only sells the inventory it buys, but also uses the company’s scale and traffic to sell other brands as well. .
“The marketplace is really exciting for us because we’ve traditionally been primarily a first-party retailer,” Rainey said. “And our marketplace will allow us to start selling additional assortments and additional products. Currently, we have approximately 400 million items on our marketplace, half of which are apparel. .
“These are products that traditionally weren’t available in Walmart stores,” he said. “So it opens up us to more customers who want to shop with us. The economic conditions around that are also different. [profit and loss] structure. But as more customers come to our marketplace, we get more attention and more advertisers spend money with us. ”
The potential for a virtuous cycle puts Walmart’s fashion on the cutting edge, just as Walmart ramps up competition with Amazon and Shein looks to expand its low-price, fast-delivery business.
The move reflects efforts made to improve the apparel selection in Walmart stores.
The budget battle for the hearts and souls of fashion customers hasn’t just begun, it’s already underway.
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