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 storefront in 2000, Walmart isn’t exactly a newcomer to digital retail. 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.
You’d think that the largest retailer in the US might choose to keep proprietary solutions to themselves. So why is Walmart selling its eCommerce technology to other retailers?
How Small Retailers Can Tap Into the Strength of Walmart
Despite the overwhelming focus on eCommerce enabled by the pandemic, brick and mortar is still far from 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 $4.44 Trillion will be spent by US consumers on both brick and mortar and digital retail by the end of this year—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 online storefronts as the only viable solution. Approximately $10 Billion may have been spent on eCommerce investments by physical retailers between May and July of 2020 alone, yet there was still some reluctance from smaller businesses. Flexible and responsive solutions were necessary to address the uncertainty but they still needed to meet small retail’s bottom line: proven efficacy.
And that’s been the advantage of Walmart. They may not have disrupted online retail as dramatically as Amazon, 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 their Walmart+ membership program in 2020, an estimated 48 percent of weekly online shoppers indicated the likelihood of joining the online subscription only service.
But 2021 is an entirely new retail climate. While analysts have predicted brick and mortar will see a resurgence as the US reopens, even formerly hesitant consumers have now indicated that the shift in their shopping habits towards online purchases are here to stay. Can Walmart’s solutions help bridge the gap for smaller retailers?
Walmart’s Partnership with Adobe
One of the key facets of Walmart’s decision to distribute their online technologies is the ease of availability. Through a strategic partnership with Adobe Commerce and Magento Open Source, small businesses can scale their eCommerce capabilities from the ground up. Whether it’s operating a basic storefront 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 over 100,000 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 availability of stock as well as leverage Walmart’s guaranteed two-day delivery fulfillment; an additional tool in their continued fight to seize a chunk of Amazon’s market share.
But the accessibility of Walmart’s marketplace doesn’t necessarily mean accessibility of eCommerce management solutions. Walmart Marketplace itself has also been met with frustration from many smaller sellers, 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 retailers 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, they can provide a unique perspective on current marketing trends based on their experiences off Walmart.
While Walmart still has a substantial leap before they 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 omnichannel sales.
Color More Lines can help you maximize your presence on Walmart and beyond. We provide white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and grow faster. Find out more at Color More Lines.