In the US, the titanic struggle in ecommerce is between the twin titans of Walmart and Amazon. But according to reports, Walmart didn’t have a stellar fourth quarter in 2017. The news has impacted the Walmart stock price negatively and raises the question as to whether Amazon (which gave an excellent set of 2017 results) is now pulling firmly ahead of the bricks and mortar retailer in the ecommerce stakes.
Both companies have deep pockets and well-known brands. Obviously Walmart has a strong network of stores across the USA that it has been leveraging for click & collect. And it also bought Jet.com in 2016, the discount online marketplace that was hugely successful in promoting bulk buying. And don’t forget that Walmart isn’t just an online retailer, but it also offers an online marketplace for third party sellers to sell on.
All told, online sales showed growth of 23% in Q417, which would be considered healthy in any normal situation but does represent a significant slow down on growth shown previously by the retailer. Chief Financial Officer Brett Biggs said off the results: “We were a bit lower than plan. We had a few operational issues from an inventory replenishment perspective.”
Although it is by no means clear exactly what the reasons were for the slowdown, these are disappointing results for anyone who believes that strong competition to Amazon is a good thing. It’s a shame none of the big UK retailers can challenge Amazon in a similar fashion.
Walmart’s great advantage in ecommerce lies with its astonishingly comprehensive network of stores across the USA and, to some extent, that’s something that Amazon has been seeking to emulate with its purchase of the much smaller chain Whole Foods. It’s been widely reported that 90% of Americans live within a 15 minute drive of a Walmart store. And, even if that’s overstated, it gives them a tremendous click & collect opportunity.
