Walmart Is Using Its Real Estate Portfolio to Push Into E-Commerce

Walmart announced it’s earning during its quarterly report last week and industry observers were understandably impressed. Their share price rose around 9% due to increased sales and what is on pace to be a 40% yearly increase in online sales. Walmart and it’s subsidiary Jet.com are working towards making the company a true omnichannel presence.

One of the best ways to do that is to use Walmart’s already far-reaching real estate portfolio as pick-up and distribution centers. Doug McMillion, the President and CEO of the retail giant spoke on that a bit:

“We’re also expanding our omnichannel capabilities and innovating to save customers time. We’re leaning into automated pickup towers for general merchandise. Two years ago, we had no pickup towers and by the end of this year, we’ll have more than 700. We’re serving more grocery pickup and delivery customers and now have more than 1,800 locations with grocery pickup. We’re also making good progress on activating grocery delivery to cover 40 percent of the U.S. population by year-end. Grocery pickup wait times continue to come down and our grocery delivery times are improving. We’re continuing to innovate with trials of self-driving cars in Arizona for our grocery pickup customers and automated picking capabilities for grocery pickup in our store in Salem, New Hampshire.”

Walmart now even has a realty page that has listings for leases of underperforming stores and a nifty infographic that mimics the CEO’s talking points:

WalmartAnother channel in the omnichannel playbook is the subscription model. Walmart was one of the first companies to use this “warehousing” type arrangement with their Sam’s Club memberships. Now they are taking a cue from Amazon and offering a subscription to a priority delivery service, particularly their one-day delivery to New York City:

“Jet announced plans to open a fresh fulfillment center that will offer a same-day grocery delivery to customers in New York City. We also continue to innovate and incubate technologies that will shape commerce tomorrow. We announced JetBlack, a subscription service that allows customers in New York City to simply text what they need and have it delivered the same day. We have a waiting list of potential customers wanting to join JetBlack.”

So, where Amazon had the headstart on the digital infrastructure and thus took the lead as consumers adopted online shopping, Walmart has long been the leader in physical space and is looking to take back some of the pie as online shopping becomes more of an omnichannel competition. This is far from just a competition happening on American soil. Walmart has also just purchased Flipkart, one of the leaders of e-commerce in India, so the showdown between Amazon and Walmart will be fought on many fronts. One of the downsides to Amazon’s strategy to take on the world is that it creates a lot of foes, who can use their collective fear to form partnerships. This seems to be the case with the Microsoft/Walmart partnership and could also be the reasoning behind Walmart pursuing selective engagements with companies like Google, JD.com, and Rakuten.

For a while the sentiment seemed to be that Amazon could not be stopped. But this might have been shortsighted as it did not take into account the company that had previously been the world’s largerst retailer and the king of low prices, Walmart.

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