The head of ecommerce for Walmart, Marc Lore, acknowledges that the company has work to do to catch up with Amazon in some respects, but that doesn't mean Amazon has the advantage in every digital matchup.
Speaking at an Advertising Week panel in New York on Wednesday, Lore said Walmart’s more than 1.2 million employees in the US, as well as its more than 4,600 stores located within 10 miles of 90% of the US population, are among its “unique assets.” They give Walmart advantages, he said, such as the ability to offer online ordering for grocery pickup, currently available in 1,000 stores.
That advantage can be seen in data from The NPD Group, showing that more than nine in 10 US consumers made a purchase at Walmart in 2016.
Walmart's ubiquity gives it the ability to try unexpected fulfillment tactics, such as testing a system where employees can make additional money by dropping off customer packages after work. Walmart has found that, on average, drop-offs generally require less than a quarter-mile of additional travel, according to Lore.
These and other edges allow Walmart to deliver fresh goods in a 2-hour delivery window—"cheaper than anybody else,” Lore said. “I like our chances better. The idea of fresh is the next big breakthrough. We are in a great spot.”
The comments came only days after the company announced its partnership with smart-lock startup August Home to test delivering fresh produce straight to customers’ refrigerators. On Wednesday, Lore said more than 1,000 consumers—at least 10 times the needed participation— have volunteered to join the test, which is taking place in California's Silicon Valley.
“The world is changing," Lore said. "People are evolving. Some may be freaked out [about] putting products in people’s refrigerators. But it’s happening.”
As to the other 10% of the US population not within 10 miles of a Walmart store, Lore said in urban markets like New York, Walmart’s Jet.com is meeting the demand, offering free same-day delivery in the “New York surrounding area”—a feature that Walmart will also be offering soon, Lore said. (To be sure, he admits a lot of the remaining 10% of the US population reside in “super rural” areas where there are no Walmart stores.)
Walmart still has a significantly smaller ecommerce footprint than Amazon, but its ecommerce sales are growing faster. According to eMarketer's Retail and Ecommerce database, Walmart's global ecommerce sales rose 25.8% for the latest 12 months, compared with Amazon's 16.9%. In the most recent quarter, Walmart's US Q2 online sales jumped 60%, contributing to the company's 12th straight quarter of comparable sales gains in the US.
As Amazon continues to expand into various areas of consumers’ lives and reshapes how people shop via its successful Alexa-powered voice assistants like the Echo devices, Walmart is partnering with Google to offer a feature where consumers can shop for Walmart items via Google Assistant voice shopping. The partnership also involves Walmart integrating its “Easy Reorder” feature to Google Express so Google can recommend a personalized weekly shopping list based on consumers’ prior purchase history.
How this deal came about also highlights the importance of the partnership for Google. In fact, Google was the one that approached Walmart first about the partnership, said Google’s senior vice president of ads and commerce, Sridhar Ramaswamy, at the Advertising Week panel. Walmart’s purchase of Jet.com, which Ramaswamy said was a “big customer for Google products from early on,” resulted in a Google-Walmart relationship taking off much faster, he said.
“It’s been a perfect partnership,” Lore said. “We are a retailer. We don’t claim to be a tech company. ... Google has more tech prowess. We are looking through the lens of how we can be the best merchant in the world. ... The two of us are stronger than anyone alone.”