[ad_1]
To avoid Amazon and remain the largest retailer in the world, Walmart is stepping up its grocery game and buying trendy digital brands. The company restructures its stores and strengthens its assets online.
"We are changing, we are adapting, and we continue to transform," Chief Executive Doug McMillon said at Walmart's annual investor meeting on Tuesday.
"This is one of the few incumbents to have managed to thwart Amazon," said Jason Goldberg, head of commerce at SapientRazorfish.
Battle of food
Walmart's proximity to buyers' homes gives the company a head start over its rivals in the grocery race. About 90% of Americans live within 10 miles of a Walmart.
The grocery store is the main driver of traffic at Walmart stores. They represent 56% of its annual turnover of about 500 billion dollars.
Under McMillon, the company has enhanced the quality of its selection of fresh groceries and has invested in private labels, such as Great Value and wine labels. Walmart also lowered prices to compete and modernized its supply chain to keep groceries fresh longer.
In 2014, Walmart introduced curbside recycling. Buyers can order online, choose a pick-up time and go shopping in thousands of stores without leaving their car. Walmart has 25,000 trained "pickers" who select products and meat for online orders.
Retail experts believe that this option is more attractive for shoppers looking to shop and who do not have the time to wait for them to arrive home.
By the end of 2019, door-to-door pickup will be available at 3,100 Walmart supermarkets and neighborhood markets. Whole Foods has only about 470 stores and attracts a narrow segment of the grocery market.
Walmart is also marshaling its real estate. He will have 700 in-store pickups – vending machines to pick up orders online – by the end of the year.
Although online delivery still represents only a fraction of the estimated $ 800 billion market in the grocery market, Walmart is taking steps to prepare.
Climb upscale
Protecting the grocery store is not enough and building new stores will no longer suffice.
Walmart will only add 10 stores next year to the United States after saturating the country with 182,000 square feet of supercentres. Walmart is trying to bring wealthier Americans with more income to spend on clothes, essentials and household items.
According to an analysis of Morgan Stanley's data, Walmart dominates low-income consumers, who represent 30% of the $ 4 trillion retail market on which the two are competing.
But Amazon wins in the high end, which is half of the available market.
Walmart has developed a smart acquisition strategy to reach these richer customers and minimize Amazon's benefits.
Instead of betting on the Walmart name, the company buys brands such as Bonobos and online specialty stores such as Moosejaw, Hayneedle and Shoebuy. In October alone, Walmart attracted Eloquii, the large-format digital brand, and lingerie retailer Bare Necessities.
Walmart also has a new modern website. He has added more than 2,000 brands to the site in areas ranging from cookware to outdoor wear.
"We really wanted to position Jet.com and push it upscale – to focus on the higher-income urban Millennials," said Marc Lore, head of US e-commerce at Walmart. Jet attracts high-end brands like Nike on the site. He will start selling Bonobos clothes next week.
The integration of startups into the ecosystem Walmart also expands the talent pool and the expertise of the company, which strives to reach tech-savvy marketers.
For example, Andy Dunn, founder of Bonobos, now leads Walmart's online brand portfolio. Bare Necessities' CEO and co-founder, Noah Wrubel, will lead Walmart.com and the intimate category of Jet.
"When they make acquisitions, they do it a lot for the intellectual capital that they can build around that," said Alan Ellstrand, associate dean of Walton College of Business, University of California. # 39; Arkansas.
All roads lead to Amazon
The challenges Walmart faces are steep and expensive.
Walmart's investments to accelerate online release will also reduce the company's profit margins. "We expect an increase in losses next year," Chief Financial Officer Brett Biggs said Tuesday.
The company is far behind Amazon in strengthening its online shipping capabilities: it operates fewer than 10 dedicated e-commerce facilities, compared to Amazon's 122 core fulfillment centers, said Gutman Morgan Stanley.
Goldberg, of SapientRazorfish, asked if Walmart had the agility and speed needed to disrupt itself in time to protect itself from Amazon.
Walmart has a well-established supply chain and distribution model that has made it the largest retailer in the world, but the same infrastructure makes it hard to navigate.
"My main concern about Walmart remains the competition from Amazon," said Ellstrand. "While Walmart continues to innovate in the online sector through the acquisitions it has made, its Walmart.com platform continues to follow Amazon."
Source link
