Walmart Has Big Year Of E-Commerce Investments Planned To Bring Growth Back To 40 Percent

by MR Magazine Staff

Investors are spooked that a cooling off of Walmart’s online sales could mean the company isn’t positioned to fend off Amazon’s internet dominance after all. That fear sent shares tumbling more than 9 percent Tuesday, when Walmart said e-commerce sales grew just 23 percent during the latest quarter, lagging prior periods’ results. But analysts and industry experts alike have been quick to point out Walmart is planning a number of investments in its website and overall e-commerce operations that should start to take hold later this year. “It’s a well-positioned huge foundation,” said Oliver Chen of Cowen & Co. “What’s ahead is technology … further digitization of supply chain, & strategic use of M&A to drive [e-commerce] share.” People are still underestimating the value of Walmart’s store fleet — something Amazon doesn’t have — and how bricks and mortar will aid the company in fulfilling more grocery orders and same-day deliveries, Chen wrote in a note to clients. “The theme here is leverage of WMT’s physical assets and our view is that the future of eCommerce is physical + digital – this strategy will drive a ‘productivity loop.'” A 23 percent increase in e-commerce sales during the fourth quarter pales in comparison with Walmart’s reported growth of 50 percent in the previous quarter. It saw growth of 60 percent in the two periods prior to that. Read more at CNBC.