Wal-Mart has once again shown its resilience and readiness to face Amazon and protect its turf as it strengthens its presence online and maintains a grip on its brick-and-mortar presence.
The retailer has narrowed its attention on three critical areas; keeping prices low but reasonable, growing the grocery pickup business and attracting top brands to sell their products on its portal at Walmart.com. This dedication has translated into a boost of over 10 percent on its stock on a single day last week based on third quarter results as investors remain bullish on the company’s thrust as the holiday season approaches.
The increased partnerships with associates, growth in its food business, acquisitions and a focus on improving the technology base has positioned Wal-Mart to be able to fight any battle fronted by Amazon.
The onslaught from Target, which has reduced prices to reflect Wal-Mart’s “everyday low price” model, and Amazon’s acquisition of Whole Foods, which led to huge price cuts on dozens of everyday items, has put pressure on the big-box retailer. However, according to Wal-Mart, customer numbers have been swelling and volumes have been up for meat, fresh produce and bakery items. The company added that online grocery orders can now be fulfilled across 1,100 locations in the U.S. for pickup customers and plans are underway to bring the service to 1,000 additional stores next year.
Doug McMillon, Wal-Mart’s Chief Executive was upbeat with investors on a call, saying that the company is attracting a variety of premium brands that are now selling on Walmart.com tripling the stock keeping units on the site to over 70 million. With brands such as Bose, Lord & Taylor and KitchenAid, the company is not only bringing on board new suppliers and partnerships but also new customers.
Wal-Mart’s head of U.S. e-commerce, Marc Lore has emphasized that Walmart.com will be redesigned to spotlight home goods and fashion. Its acquisition of Jet.com last year has given it access to younger shoppers and unique technology. The website will introduce Jet.com’s “smart-cart” feature to attract users with low prices when they bundle more items. The feature also gifts shoppers with lower prices if they opt out of returns or use debit cards on the platform.
Amazon has focused on partnerships that bring known brands to Amazon.com. The company has inked deals with Tapestry’s Kate Spade, Nike, and Levi Strauss in a bid to appeal to a wider audience. Calvin Klein will also be launching new underwear styles exclusively on Amazon.
But Wal-Mart still holds the trump card going into e-commerce because of its physical footprint. It will just need to position itself to attracting the more affluent shoppers and maintain the sales momentum.