In retail, obstacles come and go. But there are a few factors that remain seemingly constant—not the least of which is the omnipresence of Walmart.
With over 11,000 storefronts worldwide, it's hard to argue that Walmart suffers from underexposure. Yet at the same time, it's been a long-standing argument that what has been dubbed the "Walmart-ification" of American commerce has placed a considerable strain on the resources of small businesses, if not their very survival.
For better or for worse, Walmart is to brick-and-mortar retail what Amazon is to eCommerce. And while the Arkansas titan may be their largest competitor in the digital sphere, not even the legendary price advantage Walmart provides has been enough to make even the slightest dent in Amazon's armor.
At least not yet. But Amazon's also notoriously tightlipped about its own proprietary solutions. And while it may not be the only reason for their dominance in eCommerce, it certainly contributes to it.
So why is Walmart selling its eCommerce technology to small businesses?
Walmart and eCommerce: The $47.8 Billion Engine That Could?
Amazon may have a market share advantage in eCommerce of almost 33 percent over Walmart, its chief competitor. But there's one advantage the latter has which Amazon simply can't duplicate: its omnichannel strength.
Having established its first online store in 2000, Walmart isn't exactly a newcomer to retail eCommerce sales. And despite some admitted mistakes as well as significant partnerships during their eCommerce journey, they've helped pioneer omnichannel delivery solutions including BOPIS (buy online pick up in store) and curbside delivery—all of which proved critical during the pandemic, when Walmart enjoyed a 79 percent increase in online sales.
Walmart, choice and consumer perception
But Walmart is far from being considered a pioneer. Most businesses looking to gain a foothold in eCommerce will invariably choose Amazon as their primary starting point. And with good reason.
One of the primary differences between online shopping and brick and mortar is that of sheer convenience. While Amazon may have accelerated from a simple idea of an online bookstore to an everything shop offering an increasingly diverse array of product lines, there's something that gets lost in the process of online transactions: the element of control.
Online shoppers don't just want a wide variety. Or the best price. They want control over every aspect of the user experience, from selection to delivery and fulfillment. And nowhere else was that demand for control in delivery options more prevalent than in 2022, when curbside click-and-collect pickup options saw an increase of over 19 percent in customer orders.
Next-day shipping may be one of the key selling points for Amazon Prime members. But Amazon's noted failure to establish successful physical storefronts has been one of Walmart's key advantages during the pandemic. And it's not just curbside pick-up that continues to draw online shoppers to Walmart. Nor is it familiarity and name recognition.
It's a question of choice. Customer loyalty may seem like an elusive ideal for many brands, but online customers are just as demanding of variety as they are inventory. Walmart Marketplace may provide a similar level of value, personalization and variety as Amazon. And ideally, that should make for a healthy level of competition. But competitiveness and consumer perception aren't always synonymous.
The reality is that many of the same allegations of monopolization currently leveled at Amazon were once leveled at Walmart, as well. And while the retail graveyard may be cluttered with many of Walmart's once-thriving competitors, the nearly $5 Trillion in revenue in the US during 2022 being generated by mass retailers suggests that neither Walmart nor Amazon are from the only games in town.
They're simply the most visible ones. And much like physical retail, visibility counts for 90 percent of digital commerce. But can Walmart's eCommerce business solutions help bridge the gap between accessibility and small business traffic?
How Small Businesses Can Tap Into the Strength of Walmart
Despite the continuing consumer focus on eCommerce enabled by the pandemic, brick-and-mortar are still far from dead. It's not even flatlining.
While it was estimated that over 80 percent of retail sales occurred at a physical location prior to 2020, the National Retail Federation has predicted that over $4.86 Trillion will be spent by US consumers on both brick-and-mortar and electronic commerce by the end of 2022—only a quarter of which will be spent through online channels.
But smaller businesses found themselves particularly vulnerable during the pandemic. Strictly brick-and-mortar retailers declined by a reported 20 percent in 2020, leaving reliance on eCommerce business as one of the few viable solutions left in the face of increasing physical costs estimated nationally to be in excess of $38/square foot by the end of 2022.
While eCommerce may have seen approximately 10 years of growth during the first three months of the pandemic, the overwhelming focus on Amazon as a marketplace innovator also accelerated the rise of new sellers with neither the experience nor a fully-fledged product line to meet customer demand.
To make matters worse, both active and new customers became acutely aware of a persistent nuisance that third-party sellers have been complaining of for decades: the proliferation of shoddy and disreputable sellers plaguing Amazon.
That impact may not have had an immediate effect on Amazon's sales. But it was enough to make many sellers reevaluate additional platforms for their campaigns.
Not surprisingly, that included Walmart.
Walmart and the eCommerce Business Shift
Approximately $10 Billion may have been spent by online retailers between the months of May and July of 2020 alone, yet there was still some reluctance from small businesses towards online investments.
With the cost of digital advertising reaching maximum numbers, flexible and responsive solutions are necessary. But they still need to meet the bottom line for any company: proven efficacy.
And proven efficacy is just one of the advantages of Walmart's eCommerce business solutions. Walmart's search engine optimization may not be as nuanced as Amazon's (although as many sellers will tell you, that isn't necessarily a bad thing.) And they may not have disrupted online retail as dramatically. But they've successfully made the transition from physical to digital commerce with relative ease.
Not only ease but with an online footprint able to compete with Amazon. When Walmart announced the launch of its Walmart+ membership program in 2020, an estimated 48 percent of weekly online shoppers indicated the likelihood of joining the online subscription-only service.
But small businesses are going to find that 2023 will be an entirely different retail climate than 2020. While analysts have predicted the resurgence of brick and mortar, even formerly begrudging consumers have now indicated that the shift towards online shopping is here to stay.
Walmart Marketplace: The underdog advantage?
But not all brands will achieve digital success, either on their own or with Walmart's name recognition. Yet the same is also true with Amazon, except for one fundamental difference: oversaturation.
In comparison with the estimated 6 million active Amazon sellers, the 100,000 or so third-party sellers currently using Walmart Marketplace sellers may seem like an underwhelming number. At first glance, at least. But Amazon's advantage is actually Walmart's competitive one, as well.
It may sound ridiculous to think of Walmart as being an underdog. But in eCommerce, that's precisely what they are. For new businesses, the Amazon digital ecosystem can seem bewildering. That's because it is. Amazon has its own protocol, its own quirks, and above all, a playing field that is unique to Amazon and Amazon alone.
Competition is fierce on Amazon because it has to be. That's not the case with Walmart Marketplace. For many brands, it can be entirely uncharted territory—one which can propel them to success. It may not command the same sort of attention that Amazon does. But it also doesn't have the recurring stigma that has haunted Amazon for the past three years, either. And for small businesses looking to break into online sales, alignment with a retail marketplace that's less competitive as well as an increasingly critical public perception can be an extremely attractive option.
More importantly, Walmart's suite of retail marketing solutions is garnering no small share of attention, only bolstered by their recent announcement of a formalized partnership with Shopify.
But marketing solutions are one thing. Partnering with one of the world's largest software providers is another.
Walmart's Partnership with Adobe
One of the key motivations behind Walmart's decision to distribute its online technologies is the ease of availability for new businesses.
Through a strategic partnership with Adobe Commerce and Magento Open Source, small businesses can now scale their eCommerce capabilities from the ground up. Whether it's helping small businesses to operate their own eCommerce store or employing cloud-based hosting and AI-driven solutions for predictive suggestions, the accessibility of Walmart's online marketplace has proven an incredible boon for the hundreds of thousands of sellers who currently rely on it as one of their primary retail channels.
“The core mission of helping people save money and live better is at the heart of every idea including Scan & Go and checkout technologies, AI-powered smart substitutions, and pickup and delivery,” stated Walmart CTO Suresh Kumar, in a press release.
“Combining Adobe's strength in powering commerce experiences with our unmatched omni-customer expertise, we can accelerate other companies' digital transformations.”
Through the partnership, retailers hoping to provide a seamless omnichannel experience can provide curbside pickup and in-store delivery options including real-time indicators of stock availability as well as leveraging Walmart's guaranteed two-day delivery fulfillment; an additional tool in their continued fight to seize a chunk of Amazon's market share.
Walmart Marketplace Accessibility
But the accessibility of Walmart's eCommerce business management solutions doesn't necessarily mean the accessibility of Walmart Marketplace.
The platform has been met with a certain level of frustration from many smaller eCommerce businesses, with complaints of lengthy approval periods being common as well as competitive listing discrepancies leading to lower profitability.
Combined with the relatively complicated navigability of Walmart's seller system, many small businesses are choosing to turn to outside agencies to help manage their accounts successfully.
Not only can outside agencies help sellers navigate the complexities of Walmart's digital platforms and optimize their sales, but they can also provide a unique perspective on current marketing trends based on their experiences at Walmart.
But while Walmart still has a substantial leap before it can effectively compete with Amazon, it remains one of the most successful alternatives for brands and sellers looking to diversify sales channels.
Selling their eCommerce solutions may not have a significant impact on their revenue in the short term. But it may make all the difference in the world in bolstering long-term sales for both Walmart and sellers alike.
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