Walmart tries to grow third-party market with Las Vegas event
LAS VEGAS – Walmart is looking for new ways to attract sellers to its third-party marketplace, as it pushes to drive more online sales and close a wide gap with competitors Amazon.
On Wednesday, the big-box retailer launched its first Walmart Marketplace Vendor Conference, a two-day invitation-only event of how-to sessions drawing more than 1,500 people from businesses that sells clothing, party supplies, jewelry and more on the Walmart website. . The event will be headlined by some of Walmart’s top leaders, including CEO Doug McMillon.
The company on Wednesday also announced new efforts to attract and retain salespeople. Starting early next year, its market will expand to Chile, the first country outside of North America. It is increasing the number of brand stores on its website, a way for retailers to create their own digital storefronts where they can highlight certain products.
It is also adds an option that allows Walmart sellers to pay to fulfill online orders of larger, bulkier items, such as canoes, or items that come in multiple boxes, such as a patio set. It also makes it possible for in-store retailers to use Walmart’s technology to power curbside pickup or the company’s network of delivery drivers to drop online purchases at customers’ doorsteps.
Walmart is increasing its focus on its third-party marketplace, as the company drives higher-margin e-commerce sales and promises to grow its profits at a faster rate than its revenue. -in over the next five years. To do that, Walmart is adding automation to more warehouses and stores. It has also ventured into more lucrative non-retail businesses, such as advertising sales, last-mile delivery and fulfillment services.
In Wednesday’s blog post announcing the market changes, Manish Joneja, senior vice president of Walmart Marketplace and Walmart Fulfillment Services, described the business as “an endless aisle where retailers of all sizes can find the products they need and love to offer to customers.”
He said shoppers will have a wider selection of items to buy, whether those items are from Walmart or a third-party retailer. Walmart and the retailer’s business will grow at the same time, he said. Retailers share some of their market profits with Walmart.
Joneja is one of the Amazon veterans that Walmart has poached to grow its marketplace business. He also worked for a marketplace eBay. Walmart also hired another Amazon veteran, Jare’ Buckley-Cox, as vice president of Walmart Fulfillment Services.
Retailers participating in the marketplace are also potential customers for Walmart’s new businesses because they can hire Walmart to pack and ship orders or advertise their products. The number of retailers using Walmart Fulfillment Services grew more than 50% in the most recent fiscal quarter, Chief Financial Officer John David Rainey said on an earnings call earlier this month.
Walmart is the nation’s largest retailer, but it lags behind Amazon in online market share and e-commerce sales. Walmart’s annual online sales were less than a fifth of Amazon’s last year, according to Insider Intelligence. Walmart is second in market share to Amazon, which captured nearly 38% of e-commerce sales in the U.S. last year compared to Walmart’s roughly 7%, according to market researcher estimates.
Walmart’s marketplace is also much smaller than Amazon’s, despite launching in 2009. Walmart has not disclosed how many vendors are part of its marketplace, but it sells to customers in the USA, Canada and Mexico.
Amazon, on the other hand, operates a store website open to sellers in 22 countries, including Australia, Germany, Japan and the United Arab Emirates. It has used its Amazon Prime membership program to drive higher online sales volumes.
Although lagging far behind Amazon, Walmart has shown signs of movement. For the past two quarters, its US business has posted double-digit online growth as other major retailers such as Target, Best Buy and Macy’s at has posted a decline. E-commerce sales for Walmart US jumped 27% in the first fiscal quarter and 24% in the second fiscal quarter compared to a year ago.
On an earnings call earlier this month, Rainey said the number of shoppers shopping at Walmart’s marketplace was up 14% in the second fiscal quarter. He said general merchandise sold well on the platform in the three months, with double-digit growth in the home and apparel categories, even as Walmart and other retailers have seen weaker discretionary spending.