Walmart Finds a New Secret Weapon: E-Commerce

The company’s online sales topped 16% of total sales in its most recent quarter, its highest level yet.

Photo of exterior of a Walmart store
Photo by Mike Mozart via CC BY 2.0

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That greeter’s smile may be looking a little more tentative these days.

Shares of Walmart rallied 3.2% on Tuesday after the retailing giant posted fourth-quarter results that beat Wall Street’s revenue and profit estimates while also flexing its newly gained muscle as an e-commerce powerhouse.

I Found it Online

When you’ve built thousands of massive stores across the US, it’s understandable that a focus on online shopping isn’t top of mind. But Walmart executives have spent the 21st century watching Amazon grow from a fledgling internet bookseller into the future of shopping. At some point, it was probably pretty obvious that Walmart, historically nervous about cannibalizing its in-store customers, was ceding too much ground — and revenue — to Amazon.

Well, actually, that point was around 2015, when Walmart announced that it planned to significantly increase its investment in e-commerce, a move that The New York Times said was a tacit acknowledgment it had fallen far behind Amazon in enticing online customers.

As it turned out, Walmart’s better-late-than-never decision gave it some lead time ahead of the other event that redefined shopping: the covid pandemic. All of a sudden, there existed a significant number of consumers who automatically migrated online, and many of them were never coming back. But Walmart was finally ready:

  • The company said its online sales grew 17% in Q4, hitting a new high of 16.5% of total sales. That’s quite a dramatic rise from 2019, when 9% of the company’s sales came from online shoppers.
  • Walmart has also battled for the low-end consumer, rolling back prices on key grocery items that may be undercutting dollar-store rivals. The retailer managed to keep grocery sales in line with the previous quarter despite cooling inflation.

Viz-ualizing More Revenue: Walmart also confirmed it was acquiring TV maker Vizio in a deal worth roughly $2.3 billion, following reports last week that a deal was in the works. Similar to online shopping, this is Walmart meeting consumers where they now exist, which is not watching old-school linear television. The acquisition will allow Walmart a leg up in the growing retail media sector, where brands are increasingly going because of better ad-tracking and consumer-data scraping. It’s also Sam’s way of saying, we ain’t done yet, Amazon.