Walmart Pushes into E-Commerce, Now Offers 40M Products

In August, Walmart purchased Jet.com for $3.3 billion in cash and stock, a vote of confidence that the e-commerce startup’s founder/chief executive Marc Lore understood the way that Walmart could successfully compete with Amazon. Lore believes that Walmart should focus on product areas that are newly popular online, including clothing, fresh food and everyday essentials found in the drugstore. Shortly after acquisition, Lore and his management team took over Walmart’s domestic e-commerce operations, including 15,000 employees.

Bloomberg notes that Lore is engaged in “the most urgent rescue mission in business today: Repurpose Walmart’s historically underachieving Internet operation to compete in the age of Amazon.” ChannelAdvisor Corp. chief executive Scot Wingo succinctly sums up the challenge: “Amazon has run away with it, and Walmart has not executed well.”

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To that, Lore has a ready response. “We’ll need to take the offensive, swim upstream,” he said. “As Sam Walton said, ‘Opportunity lies in the opposite direction’. ”

According to comScore, Walmart ranks No. 2 in domestic e-commerce destinations. A site redesign will be unveiled this summer, and Walmart will offer free delivery from the site for orders of more than $35. Another tactic lets shoppers order online but pickup at one of the 4,700 U.S. stores, for savings on one million products.

Walmart has also acquired mid-level e-commerce startups including Shoebuy.com, fashion site ModCloth and Moosejaw’s outdoor apparel, for $70 million, $45 million and $51 million respectively. Also expected is a $300 million acquisition of Bonobos, a menswear site “that offers well-fitting pants and a team of enthusiastic customer service people” dubbed ninjas.

As a result, Walmart now has more than 40 million products online, puny perhaps compared to Amazon’s 350 million items, but still greatly improved. Walmart’s online sales are fulfilled at a 1.2 million square foot facility in Bethlehem, Pennsylvania, which has improved its turnaround, now shipping products in one day by air and two days by ground.

Amazon, however, is also evolving. Consumer Intelligence Research Partners says that about half of all U.S. households subscribe to Amazon Prime. Macquarie Research says Amazon’s “takes more than $5 out of every $10 spent buying stuff online,” and its market value is “now around twice Walmart’s.”

The company is also exploring new ideas, such as the Amazon Go store, where customers are able to shop and be automatically charged for what they buy, as well as a “hybrid supermarket-and-pickup center for people who order groceries online.”