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Convenience Commerce

Making sense of Walmart’s online growth

by Ken Cassar - August 24, 2017

Image credit: Leonie Wise (via Unsplash)

In the first two quarters of 2017, Walmart has turned out the strongest US online growth numbers we’ve seen from the retailer since the heady outset of the e-commerce age.


In Q1 2017, Walmart announced that the Gross Merchandise Value of US sales had grown by 69 percent relative to the prior year. In Q2 2017, we saw a similar story with GMV up 67 percent. If you’re like me, when you saw these announcements your instinct was to assume that a retailer as mature as Walmart couldn’t grow this quickly and that the growth must have been the result of Walmart’s acquisitions during 2016 and 2017.


Fortunately for us all, I’ve got access to the world’s largest e-commerce purchase panel at Slice Intelligence and I can check those assumptions. Here’s what we found when we pulled the data:

Walmart’s core brands are doing very well

Walmart’s core brands from before it began its recent e-commerce shopping spree are doing quite well (this is using our sales data, which is similar to Walmart’s GMV measure). Looking at calendar Q1 (January – March 2017), Walmart.com, Walmart Grocery (Walmart.com’s click and carry grocery offering), and Sam’s Club.com posted combined growth of 69 percent. In calendar Q2, Walmart’s core brands grew by 73 percent.

Walmart Grocery is the main growth engine

Walmart.com remains the flagship banner for Walmart’s online empire, but it now accounts for only half of Walmart’s US online sales. Walmart Grocery has been the most important catalyst of growth, going from just a few markets a year ago to a thousand by the end of 2017.


This is having a huge impact on the top line. In June of 2017, Walmart Grocery accounted for 26 percent of Walmart US sales, bigger than Sam’s and Jet combined.

Implications

It goes without saying that even with all of Walmart’s recent online momentum, it has a way to go before it catches up with Amazon. In June 2017 Walmart’s U.S. sales (including Walmart.com, Walmart Grocery, Jet, Sam’s, Modcloth, and Bonobos) account for only 8 percent of Amazon’s U.S. sales.


While this is modest, it is two points higher than this time last year. More importantly, it clearly solidifies Walmart as the top alternative to Amazon for those looking for options. And suppliers to Amazon are looking for alternatives in order to mitigate Amazon’s power in the market, which is outsized in virtually every category where Amazon competes.


The growth of Walmart Grocery is of particular interest to food brands and retailers. While Amazon is the dominant retailer of food online, Walmart Grocery’s growth has proven that a concerted effort to make click and carry easy for consumers yields significant dividends.


We believe that the encroachment of Walmart Grocery on Amazon’s grocery market share might have played a role in Amazon’s decision to acquire Whole Foods rather than to organically grow Amazon Fresh Pickup. We also believe that the combination of Walmart Grocery growth and the Amazon Whole Foods tie-up make it immediately imperative for all non-specialty grocers to kick their e-commerce strategies into high gear.


For the food brands that have gotten into the habit of focusing their e-commerce time and attention on Seattle, I’ve got three letters that ought to become increasingly familiar to you: XNA. That’s the airport code for Northwest Arkansas Regional Airport, servicing the greater Bentonville, Arkansas region. Know it, love it. And for goodness’ sake, try the local barbecue while you’re there.

About this data

With a panel of 5 million online shoppers, Slice Intelligence gives the most detailed, and accurate digital commerce data available, and is reported daily.


Slice Intelligence is the only service to measure digital commerce directly from the consumer, across all retailers, at the item level, and over time. Our retailer-independent methodology precisely measures commerce as it happens. By extracting detailed information from hundreds of millions of aggregated and anonymized e-receipts, Slice can map the entire Purchase Graph, connecting each and every consumer to all their purchases.


Slice gets its data from e-receipts – not a browser, app or software installed by the end-user – so its measurement reflects comprehensive shopping behavior across multiple devices, over time which are key in an increasingly omnichannel retail world. Slice Intelligence is the exclusive e-commerce data provider for the NPD’s Checkout Tracking e-commerce service.

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