Wal-Mart's e-commerce business: Can it move the needle, be material?

Wal-Mart's e-commerce business: Can it move the needle, be material?

Summary: Global e-commerce sales were up 27 percent in the first quarter, but still account for just 0.3 percent of U.S. sales.

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TOPICS: E-Commerce
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Wal-Mart is talking about e-commerce as a way to grow the retailer, but it's unclear how long it'll take to move the needle on the company's sales.

When Wal-Mart reported its earnings on Thursday it noted that global e-commerce sales were up 27 percent for the first quarter. But hard numbers take some remedial math and guess work.

The company said that e-commerce was 0.3 percent of U.S. sales of $67.85 billion, or $203.5 million. International e-commerce sales are lumped in with overall sales and largely remain a mystery.

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Nevertheless, Wal-Mart highlighted the following:

  • E-commerce is about .3 percent of U.S. sales.
  • "Our e-commerce business delivered double-digit sales growth and contributed approximately 30 basis points to total Wal-Mart U.S. comp sales," said Bill Simon, CEO of Wal-Mart U.S. "Approximately two-thirds came from the walmart.com fulfilled sales and the remainder from store fulfilled orders. We saw particular strength in home, hardlines, toys and seasonal, and apparel, which was somewhat offset by softer results in electronics."
  • E-commerce sales for Sam's Clubs are 0.2 percent of the first quarter sales pie of $12.2 billion excluding fuel.
  • In the U.K., Wal-Mart's Asda's Click & Collect online grocery home shopping business has a market share of more than 19 percent. E-commerce sales were up 19 percent in the first quarter. 
  • In China, the company's Yihaodian e-commerce effort saw traffic surge in triple digits and has 3 million items available. 
  • Wal-Mart will invest 2 cents a share to 4 cents a share of its earnings in e-commerce investments.

The most pressing issue for Wal-Mart is that it has to meld e-commerce with physical sales and generate a virtuous cycle. The jury will be out on Wal-Mart's ability to use e-commerce to turbo charge the overall business for the foreseeable future.

Topic: E-Commerce

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2 comments
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  • Are they saving sales they would otherwise lose?

    I live a mile from a walmart and have used 'site-to-store' quite a bit and like it. They seem to have a broad and deep selection. Compared to folks like BestBuy they don't seem to be as 'at risk' of shoppers checking out products at brick and mortar then buying online. They could be saving sales they would otherwise lose.
    bgarvey_z
  • Walmart Site to Store?

    I used it several times last year to buy Samsung Note 10 refurbished Tablets. Got a good deal on them, and it was really easy to conduct business. I just entered my order on line and picked it up at my local Walmart which is less than 1 mile away. I also bought a lot of goods from Amazon last year and had the product delivered to my home. With the things that I got from Amazon, I would have had to go to 7 or 8 different stores and probably would not have been able to find exactly what I wanted in a store. I haven't bought from them this year since I am buying for myself and friends and did not have any requirements. I do buy locally if I can find what I want at a reasonable price and they have it on hand. Companies like Amazon are frequented by lots of buyers since you can get a conglomeration of things all in one order that you would be unable to find anywhere else at one place.
    rgeiken@...