Walmart Revamps Website and Shifts Profits Focus

(Photo Credit: Marques Tomas/Unsplash)
(Photo Credit: Marques Tomas/Unsplash)

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Walmart put a fresh coat of paint on its website, giving it the social media flair of a Pinterest board or Instagram feed designed to keep you scrolling and buying and scrolling and buying and scrolling and buying…

It’s the latest attempt from an e-commerce giant to adapt to spending trends and entice customers to buy things they weren’t necessarily looking for when they first signed on.

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The timing of Walmart’s digital renovation is perhaps no coincidence. The big box retailer finds itself in the curious position of facing both crisis and opportunity. The American consumer is wading through a post-pandemic malaise. While overall spending has remained persistently high (much to Jerome Powell’s annoyance), the average consumer may be starting to feel a hangover from a Covid-era YOLO spending spree. February marked a 4% year-over-year dropoff of discretionary general merchandise sales in the U.S., according to market research firm Circana.

Still, there may be an opportunity to sap up e-commerce market share. It’s no secret that Amazon is starting to feel more like an ad marketplace than a digital supermarket. According to The Washington Post, its e-commerce platform averages 8.5 sponsored — or “shill” — results on the first page of product search queries. And now its online sales have declined in four of the past five quarters, suggesting vulnerability. (To be fair, it’s also no secret why Amazon has quietly transformed its flagship service: ad margins are ridiculously high, and last year the company scored nearly $38 billion selling ad space, good for a solid third place behind Google and Meta.)

With its website redesign, Walmart seems to be attempting to thread the needle of capitalizing on the enormous potential of online sales while also creating a user experience less alienating than Amazon’s:

  • Walmart e-commerce Chief Tom Ward says the company is trying to “curate an experience when customers walk through our doors, whether they’re physical doors or digital” and provide “a more engaging way to browse.”
  • CFO John Rainey recently said the business is looking to boost profits through ad sales, B2B services, and third-party marketplace sellers. While 55% of Walmart’s sales come through its grocery business, it has a small margin, but ad margins typically fall in the 70% to 80% range, Rainy said.

Anything You Can Do: Ironically, as Walmart ups its e-commerce game, Amazon is aggressively upping its brick-and-mortar efforts. CEO Andy Jassy told the Financial Times in February the company still plans to “go big” on in-person shopping despite barely making a dent in the space since its 2017 Whole Foods acquisition — though he blamed the stagnation on a lack of “normalcy” during the pandemic. Then again, these comments came before a very abnormal banking crisis, so what normalcy is he expecting?