On shaky ground, Walmart regroups for a big e-commerce push

Walmart CEO Doug McMillon

Walmart CEO Doug McMillon addresses the audience at last week’s Shareholders Meeting (photo courtesy Walmart News & Views)

It may be the biggest retailer in the world, but Walmart’s been facing its share of challenges lately. The company’s leadership blamed disappointing winter revenues on the weather, is contending with an ongoing US investigation into charges that they spent millions on bribing Mexican bureaucrats, and is struggling to keep labor unions tolerant of its wage structures.

Senior management believes the solution to all these woes can be found online. E-commerce currently drives under 3% of the company’s revenues, so there’s certainly room for growth. And stats available via SimilarWeb PRO point to some dramatic reasons to seek an e-commerce turnaround.

In recent weeks and months, Walmart has made a slew of announcements that speak to dramatic and aggressive changes in Walmart e-commerce leadership personnel, infrastructure and technology. And they’re approaching these changes using an unconventional model – instead of mimicking what has worked well domestically to implement change overseas, which is how big American companies usually go about business, Walmart is taking cues from its Latin American division to inform its US e-commerce strategy.

The company’s new CEO, Doug McMillon, started at his current position four months ago following five years at the helm of Walmart International. At the Annual Shareholders Meeting last week, McMillon said, “We need to be at the forefront of innovation and technology. We will lead with urgency to get ahead of change.”

We’re already seeing this with facts on the ground. Since early 2013, Walmart.com’s Silicon Valley office has hired approximately 1000 people. Since early 2014, they’ve announced the establishment of new e-commerce depots in Indiana, Pennsylvania and Texas. And they’re seeing some success with new mobile apps like Savings Catcher and Walmart to Go.

Now Walmart is betting the digital farm on wunderkind executive Fernando Madeira, named last week as the new US e-commerce unit’s CEO. Madeira was promoted from his position as CEO of the Latin American e-commerce unit, a job he held for about two years, but during that time, he has managed to generate spikes in some key metrics that have turned stakeholders’ heads. His emphases have been reducing fulfillment lag time, diversifying the product lines and improving customer support.

Visit_Duration_From_Jun__2013_to_May__2014

SimilarWeb PRO’s crawlers weren’t able to confirm Ashe’s specific metrics claims about growth at Walmart.com.br under Madeira, but the site’s average visit duration did nearly double between August and February

“We’ve seen Brazil grow twice as fast as the market, while increasing traffic fourfold,” said Neil Ashe, the company’s CEO of global e-commerce. Walmart Argentina, Chile and Mexico have experienced surging revenues and popularity with customers. The company has also diversified its operations into satellite retail brands such as Sam’s Club (Mexico), Todo Dia (Brazil) and Changomas (Argentina) to help fuel this growth.

With Madeira overseeing Walmart’s reinvigorated e-commerce properties, the retail giant is poised for a big turnaround, maybe driving enough growth to chip away at Amazon’s gargantuan market share. However, the data so far this year suggests that Walmart.com is losing ground to Amazon, so Walmart will have to act fast to reverse the losing trend.

market-share-growth-2013-vs-2014

Comparing US market share growth between 2013 and 2014 – Stats by SimilarWeb PRO

About the Author -

Ben Jacobson is a freelancer specializing in digital marketing, content and community management for startups, small businesses, travel publications and entertainment brands.

Discover the secrets of online success

Comments