This week Walmart announced its fourth quarter earnings for 2018 which includes significant improvements in its online revenues.
For the quarter, online sales increased by 43 percent YoY. For the year, Walmart’s online sales are up 40 percent, nearly doubling that business over the last two years.
While these sales gains are impressive, the company is still losing money on eCommerce and warns its losses in that market may even increase from investments it still has to make to build out its online business.
The company expects to continue to grow its eCommerce sales between 30 to 40 percent each quarter.
As expected, analysts in the earnings call asked many questions about Flipkart and India, considering the recent regulatory challenges the company now faces.
The Walmart executives also spent a lot of time discussing its expanding online grocery business, including delivery strategies.
What was missing from the earnings call was any mention of the marketplace business on Walmart.com. It seems Walmart’s short-term strategy in eCommerce is with its own product mix and integrating grocery into that mix.
When one compares how often Amazon touts its marketplace sellers and how they contribute to the company’s product and sales mix, Walmart not even discussing its third-party marketplace could worry small business owners that typically are marketplace sellers.
If the company’s focus is elsewhere to grow its eCommerce business, then it seems Walmart may not be the third-party marketplace opportunity of the future some thought.
Earnings Call Highlights On eCommerce
Doug McMillon – President & CEO
“We’re even more convinced they [consumers] want us and expect us to bring our stores and eCommerce business together, an additionally connected seamless way that make shopping easier.”
“…eCommerce sales increased 43% and we gained market share in key categories such as grocery and toys, according to Nielsen and the NPD Group.”
“We are making progress in eCommerce… We’re expanding our assortment, improving search enhancing our website and executing better on the fundamentals such as product reviews, inventory mirroring, and on-time delivery to accomplish this.”
“Sales in eCommerce increased 40% for the year.”
“At Sam’s Club… comp sales for the year increased 5.7% and eCommerce sales grew 27%.”
“In India, we remain optimistic about the eCommerce opportunity given the size of the market… In terms of the regulatory environment, we were disappointed in the recent change in law and the lack of consultation, but the team has worked to ensure that we’re in compliance with the new rules.”
“We see the future as a frictionless experience across stores and eCommerce but we have more work to do as customers raise their expectations, competition persist, and the omni retail story continues to evolve.”
” the thing that’s taking longer than what I would have guessed is to build that merchandise assortment including the brands that we’re trying to add to a place where we got a repeatable healthy mix of business online.”
“…a year ago we had some fulfillment center challenges and the team did a great job of preparing for peak and executing it this year and the customer experience was a lot better. So I was really pleased to see that.”
“On Jet I’m really pleased with the role that it’s playing, attracting new brands. And our focus as we mentioned before is on urban markets. So it’s an opportunity to learn and to try new items and different items in some cases that we have at wallmart.com so that’s the role it’s playing.”
Brett Biggs – EVP & Chief Financial Officer
“As we outlined in October, we expect our losses in eCommerce to increase this coming year reflecting investments in infrastructure, people, online grocery and store number 8 initiatives.”
“Walmart U.S. eCommerce is expected to grow sales around 35% in FY’20 and we expect the quarterly growth to range from around 30% to below 40% range.”
What do you think about Walmart not even mentioning its third-party marketplace when discussing eCommerce? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.