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Walmart Launches Gauntlet to Amazon

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Walmart announced Tuesday its intention to develop 40% of its crucially important e-commerce business in the United States in the next fiscal year. The company intends to take advantage of a series of key acquisitions and its more than 4,600 physical locations to launch a direct challenge to Amazon millennials.

Walmart – the world's largest retail company and Amazon's largest competitor – presented its goals at its annual meeting with Wall Street analysts, where CEO Doug McMillon said that the company was committed to becoming a digital powerhouse.

"We are undoubtedly in a period of historical transformation," McMillon said at the meeting. "Business is changing, and Walmart is transforming too."

Not your father's big box

Walmart plans an aggressive expansion of its online grocery store business, with 1,000 new locations in the US, said McMillon. The company also experienced delivery to customers in the United States, the use of automated tours to speed up the in-store pickup experience and ways to expand the use of Walmart Pay .

Customers who shop at Walmart in stores and online spend almost twice as much as customers who shop at the retail store only in stores, McMillon noted.

Customers who began shopping at Walmart.com after previously shopping only in physical stores also increased their in-store purchases, he said.

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The US retail market is expected to reach $ 3.5 trillion in 2017, according to data from Forrester Research, which represents a growth of 3.8%, said Mr. McMillon. Brick and mortar sales are expected to reach $ 3.1 trillion, increasing to just over 2%. The e-commerce market, which is expected to grow by 14%, will represent sales of $ 450 billion.

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The online grocery store is an untapped market in the e-commerce space, and this category is a major goal for Walmart, according to McMillon.

Walmart hopes to leverage its ability to supply grocery products directly from its thousands of stores located near 90% of the US population and to work with employees and external services such as Deliv .

Delivering last month began testing the delivery in the refrigerator with Walmart and the August smart-lock firm in the San Francisco Bay Area.

Enthusiastic analysts

Walmart surprised Wall Street earlier this year by announcing a startling breakthrough in e-commerce following the acquisition of Jet.com last year, as well as the purchase of several other brands, including Bonobos, men's clothing retailer, Moosejaw, manufacturer of outdoor clothing and vintage women's clothing. Modcloth retailer.

"I think Walmart is doing a great job challenging the status quo," said Robert Hetu, director of research and head of business management at Gartner.

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"It took them awhile to wake up, but the answer was a wave of transformational approaches," he told the E-Commerce Times.

However, e-commerce still represents a small percentage of Walmart's overall makeup, noted Paula Rosenblum, managing partner at RSR Research.

Rival department stores like Target have also experienced surges in ecommerce from a lower base figure, she told the E-Commerce Times.

During the first half of fiscal year 2018, Walmart announced a staggering 62% growth in eCommerce sales, compared with 12% in the prior period.

"We want to be the destination for customers to save money, no matter how they want to shop," said Marc Lore, CEO of Walmart, USA, at Tuesday's meeting .

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The company aims to enhance the Walmart.com brand, revamp the website, make Jet.com a more attractive supplier for high-income millennials, and attract more premium brands. he adds.

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"Walmart's recent incursions in innovative technology, from facial recognition to returns via their application, are bold, ranking them in a category reserved for brands like Apple," said Andrew Park, senior director of the strategy of the experiment. customer at
InMoment.

"The plan for inexpensive retailers to expand their ecommerce business exponentially can be part of a broader strategy – to create a new digital sandbox where they can test, learn and iterate quickly, rivaling Amazon "he told the E-Commerce Times.

Surprisingly, Walmart has emerged as a favorite brand of Millennials in the 2017 Food Love List list published by Conde Nast and Goldman Sachs, Park noted, and these customers may wonder if the retailer can make the transition to a true innovator. -commerce

"These investments in technology, if done correctly, can turn that plot into long-term loyalty and trust," Park said, "but the only way to succeed is to stay connected to humans at the heart of every business, which includes both customers and employees. "


David Jones is a freelance writer based in Essex County, New Jersey. He wrote for Reuters, Bloomberg, New York Crain Affairs and The New York Times .

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