Walmart's efforts to stay on Amazon are worth it

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Walmart (NYSE: WMT) has invested billions in its e-commerce activities in the domestic market for the past three years, since the acquisition of Jet.com and the installation of Marc Lore at the head of e-commerce in the United States. She has purchased several native brands, including Bonobos and Modcloth, and has successfully attracted new brands to Walmart.com and created her own brands in-house. "N n"; data-reactid = "11">Walmart (NYSE: WMT) has invested billions in its e-commerce activities in the domestic market for the past three years, since the acquisition of Jet.com and the installation of Marc Lore at the head of e-commerce in the United States. He has purchased several digital native brands, including Bonobos and Modcloth, and has successfully attracted new brands to Walmart.com and created his own brands in-house.

But its online grocery business, an activity that existed prior to the acquisition of Jet.com, has been the show's star in recent years. The online grocery store enabled Walmart's US online business to generate 40% revenue growth last year. A similar level of growth will help Walmart reach $ 21-22 billion in online sales this year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Although the grocery store is an exceptional winner, Walmart's efforts Capturing more traditional online shopping shares at a huge cost: The company is expected to lose more than $ 1 billion this year from its US e-commerce business, according to a report from & nbsp ;recoding. & nbsp; "data-reactid =" 13 "> While the grocery store is a remarkable winner, Walmart's efforts to capture its share of more traditional online shopping have been very expensive.The company should lose more money. 39, a billion dollars this year e-commerce operations in the United States, according to a report from Recode.

<p class = "canvas-canvas-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This is the cost of support Amazon.com (NASDAQ: AMZN)but there would be detractors within Walmart who are unwilling to continue to lose money on e – commerce. "data-reactid =" 14 "> C & # 39; is the cost of care Amazon.com (NASDAQ: AMZN)but there would be detractors within Walmart who are unwilling to continue to lose money on e – commerce.

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Source of the image: Walmart.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "You have to spend money to earn money"data-reactid =" 27 ">You have to spend money to earn money

Walmart has agreed to spend hundreds of millions of dollars for small acquisitions in ecommerce over the past few years, as well as to invest in its digital grocery shopping platform and other shopping activities. line, but the direction does not seem to have the courage to lose.

Lore reportedly pushed Walmart's warehouse network for online orders, but encountered significant resistance from CEO Doug McMillon. Amazon has 110 distribution centers across the country, while Walmart has at most 20, according to Recode. Building more warehouses would cost hundreds of millions of dollars at Walmart. This can take several years from the day a warehouse is opened until it runs at full capacity.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "These are long-term investments Amazon is more than The Chief Financial Officer, Brian Olsavsky, recently told analysts that the company would invest a 800 million dollars In the second quarter, improve its distribution network to facilitate the one – day shipping of the 100 million unique items currently shipped from its warehouses. He is already able to ship 10 millions data-reactid = "30"> These are long-term investments that Amazon is more than willing to do and has been doing for 20 years. Chief Financial Officer Brian Olsavsky recently told analysts that the company During the second quarter, an additional $ 800 million was invested to improve its distribution network to facilitate the one-day shipment of $ 100 million. Unique items currently shipped from its warehouses. It is already able to ship 10 million different items to customers with a one – day warranty. .

<p class = "canvas-atom-web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Walmart has decided to compete with Amazon with its own program. 39, one day expedition, The next day. The service is deployed in certain metropolitan areas throughout the year. More than 200,000 items will be shipped to customers within 24 hours. Walmart says its strategy of only shipping NextDay orders from a single warehouse and relatively short distances will be more profitable than average online orders. & Nbsp; "Meanwhile, Walmart has decided to compete with Amazon 's one – day shipping program, NextDay: the service extends to some metropolitan areas all over the world. throughout the year and will allow more than 200,000 items to be shipped to its customers within 24 hours. "Walmart says its strategy is to ship NextDay orders from a single warehouse and Short distances will be more profitable than average online orders.

But Jason Del Rey of Recode points out that the elements available via NextDay generally have very thin margins. Even with lower shipping costs, Walmart will have trouble generating a profit on NextDay orders.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "E-commerce acquisitions do not work"data-reactid =" 33 ">E-commerce acquisitions do not work

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "As part of the online shopping frenzy of 39; Amazon, she bought several fashion brands, including Bonobos, Modcloth and most recently Eloquii, which she managed to recover after failing to raise other venture capital due to slower growth Sales. imprudent at the time, the three companies were still not profitable, according to Recode sources. "data-reactid =" 34 "> As part of Amazon's online shopping frenzy, she bought several fashion brands, including Bonobos, Modcloth and Lately, Eloquii, which had seemed unwise at the time, was able to attract those companies that had failed to raise a new wave of venture capital because of slower sales growth.

The story continues