Walmart’s E-commerce Sales Crossed $100 Billion in 2023, Closing the Gap with Amazon.
Walmart, the world’s largest retailer, achieved a remarkable feat in 2023: it surpassed $100 billion in e-commerce sales for the first time, growing by 23 percent from the previous year. This put Walmart closer to its main rival, Amazon, which still dominated the online market with $255.9 billion in product sales, up by 5.3 percent.
Walmart’s impressive performance in e-commerce gave it a new edge in the competitive retail landscape, as it pursued its growth strategy while chasing Amazon. Doug McMillon, Walmart’s CEO, said on a call with analysts that “scale has helped a lot” in achieving this milestone.
Walmart’s growth strategy involved offering an omnichannel experience to its customers, combining its physical stores with its online platform. Walmart invested in remodeling its stores to improve the shopping experience and enhance its supply chain to speed up delivery. McMillon said that Walmart was “in execution mode” and confident in its ability to grow further, as it could provide value and convenience to its customers and members. He also said that Walmart’s supply chain was becoming “more intelligent, more connected, more automated”, which would help improve execution.
Walmart also showed its ambition to expand its tech capabilities, announcing a $2.3 billion acquisition of Vizio, a connected home and television company, on Tuesday. This move aimed to strengthen Walmart’s position as sales trends were expected to slow down in the coming year.
Walmart’s fourth-quarter results beat analysts’ expectations, as its adjusted earnings per share were $1.80, compared to the forecast of $1.64, according to FactSet. However, its net income declined by 12.4 percent to $5.5 billion, due to gains on its investments.
Walmart, the world’s biggest retailer, had a strong year in e-commerce in 2023, as it increased its online sales by 23 percent to over $100 billion for the first time. This brought Walmart closer to its main competitor, Amazon, which still led the online market with $255.9 billion in product sales.
Walmart’s e-commerce success was driven by its omnichannel strategy, which combined its physical stores with its online platform. Walmart also leveraged its ancillary businesses, such as its advertising offering and its fulfillment services for its online marketplace sellers, to boost its revenues and margins.
Walmart’s total revenues for the quarter ending on Jan. 26 rose by 5.7 percent to $173.4 billion, with its advertising business growing by 33 percent. Walmart’s U.S. comparable sales increased by 4 percent, with strong performance in grocery and health and wellness segments, but weak performance in general merchandise segments.
Walmart’s general merchandise sales were affected by deflation, or falling prices, in some categories, such as home, seasonal goods, and toys. However, Walmart’s CEO, Doug McMillon, said that this also meant that Walmart’s customers were finding value in areas like apparel and hardlines. He also said that Walmart’s unit sales in fashion, home, and hardlines increased, indicating market share gains and new customers, especially from higher-income households.
Walmart’s e-commerce business was still not profitable, but it was getting closer to reaching that goal. Walmart also announced a $2.3 billion acquisition of Vizio, a connected home and television company, on Tuesday, showing its ambition to expand its tech capabilities and position itself for future growth.
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Walmart, the world’s largest retailer, saw its e-commerce business grow significantly in 2023, as it attracted more customers and transactions, both online and offline. Walmart’s U.S. transactions, excluding fuel, increased by 4.3 percent, while its average ticket prices decreased by 0.3 percent.
John Furner, Walmart’s U.S. CEO and president said that Walmart was seeing “more customers, more often, and a lot of new customers”. He also said that Walmart’s e-commerce weekly average customers rose by 17 percent, which was a strong number. He added that more customers were using same-day services and express deliveries across a wide range of categories.
Furner also emphasized the importance of having a short last mile in e-commerce, which enabled Walmart to deliver orders that would have been traditionally e-commerce or food delivery orders, or a mix of both, from its stores. He said that this was “really helping the brand”.
Walmart’s total revenues for the year increased by 6 percent to $648.1 billion. Walmart expected to continue growing this year, but at a slower rate, with its net sales projected to rise by 3 percent to 4 percent.
Walmart’s growth over the years and decades has made it a retail giant, but it has also transformed itself in recent years with its new focus on e-commerce and automation. Walmart had become more agile and innovative, as it experimented with new ideas and technologies.
One of these ideas was drone delivery, which McMillon, Walmart’s CEO, highlighted as an example of how Walmart could offer faster and more convenient service to its customers. He said that Walmart already offered express delivery in the U.S., where customers could get their orders delivered quickly. But he also asked, “What if you need something faster?” He gave an example of a customer who needed chili seasoning for a pot of chili on the stove. He said that drone delivery could get it to the customer in 15 minutes or less. He also said that drone delivery was not new to Walmart, as it had operated 37 hubs across seven states and completed 20,000 deliveries in the last two years. He said that by the end of the year, Walmart would make drone delivery available to about 75 percent of households in Dallas-Fort Worth.
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