Supply Side: Marketplace a Growing Growth Engine for Walmart

Walmart Marketplace’s business helped the Bentonville-based retail giant surpass $100 billion in online sales last year. That was a milestone, but Walmart is doubling down, betting the business has plenty of room to run.

Walmart CEO Doug McMillon said that in the last quarter, sales on the platform were up 32% year over year, and in Mexico alone, sales on the platform were up 60%. The Marketplace platform gives third-party sellers a space to leverage Walmart’s reach and technology.

Walmart Marketplace has achieved sales growth of more than 30% in each of the last four quarters, fueling the retailer’s continued success in e-commerce. Walmart’s U.S. e-commerce business has achieved double-digit growth for six consecutive quarters. The number of sellers listing items on Walmart.com increased by 20% last fiscal year, the retailer reported at its recent Let’s Grow Marketplace Seller event, held in San Francisco in late August. The event was designed to attract more sellers to the site.

“We are executing on strategic priorities at Walmart that help us become customers’ first choice — every day, every season, for every item. Walmart Marketplace is a key part of that mission,” said Tom Ward, chief e-commerce officer, Walmart US

Walmart Marketplace is now second only to Amazon with more than 410 million unique visitors to Walmart.com each month. Statista reports that the number of sellers on Walmart Marketplace surpassed 150,000 earlier this year with more than 400 million items. On Walmart Marketplace, brands like Toms, Eddie Bauer, Dooney & Bourke and Prada sell to customers of all income brackets.

Latriece Watkins, Walmart US chief merchandising officer, said 30 Walmart merchants attended this year’s event to meet and strategize with marketplace sellers. McMillon said Marketplace is a way for Walmart to reach everyone, and it also allows Walmart to partner with entrepreneur sellers and international manufacturers to ensure customers can find the brands they want. Marketplace also generates additional revenue for Walmart and enables additional revenue from fulfillment services, advertising and data sharing offered to sellers.

Jason Goldberg, chief strategy officer at Publicis Groupe, said Walmart’s marketplace is a key reason online sales continue to grow by double digits, and also why the company has had more stable revenue generation in recent quarters. He said the marketplace allows Walmart to compete head-on with almost every retailer for products that consumers want, so the retailer is gaining market share.

NEW MARKET SERVICES
Walmart made several announcements during an August event in San Francisco. Walmart Fulfillment Services (WFS) announced new ways for merchants to move merchandise between marketplaces and use Walmart to fulfill any e-commerce retail order.

Matt Lehr, co-founder of Cate & Chloe, a jewelry brand sold on Walmart Marketplace, said WFS was a game-changer for his company.

“One of the reasons we chose WFS is because we needed to grow, and that was hard to do with our internal fulfillment team. We were already selling on Walmart Marketplace and had some success, but before WFS we had trouble keeping up with demand,” Lehr said.

He said customers want to receive their products within one or two days, and without Walmart, such delivery would not be possible given its logistical capabilities.

Walmart will fulfill orders and manage returns, offering simple, unbranded packaging, fast, reliable shipping and competitive rates that are an average of 15% lower than the competition. Walmart is launching the program on September 10, just in time for holiday deliveries.

In addition, with Walmart’s new Cross-Border Import service for full-container shipments, WFS can now handle the transportation of inbound goods from Asian origin ports directly to WFS’s U.S. facilities. Walmart is also opening up its network of carriers to sellers to fulfill full-truckload shipments. Sellers who use Walmart’s Preferred Carrier program through WFS can now choose to ship multiple items or an entire truckload at special rates through Walmart-vetted carriers.

STORE CONNECTIONS, GROWING STOCKS
Walmart’s blend of digital and physical channels is the driving force behind Walmart Marketplace, according to Manish Joneja, head of marketplace and fulfillment services at Walmart. He said no other marketplace can offer Walmart’s breadth of customer reach, physical proximity and seamless integration of digital and physical convenience.

“Retailers are looking for a smart path forward,” Joneja said. “We’re putting all the pieces together to become more than just a marketplace, and we’re investing in new ways for retailers to serve customers as we grow together.”

Walmart has unveiled Walmart LocalFinds to connect online and offline shopping with direct pickup and delivery from retailers’ physical stores. It introduces a new way for customers to discover retailers in their area. Combined with Walmart’s last-mile delivery network, Walmart LocalFinds speeds deliveries and connects shoppers with local businesses through Walmart’s digital channels.

Walmart said the service will launch in Atlanta and Dallas this fall, with additional cities to follow. Walmart said 1-800-Flowers.com is the first nationwide retailer to participate. Walmart is also trying to boost sales in the beauty category with its new Premium Beauty offering. The new brand has more than 20 new products in its initial lineup of skincare, haircare and hair tools.

Walmart Marketplace also introduces Resold at Walmart, the first digital destination for cross-category and pre-owned items from retailers. The marketplace will have 5 million items from more than 1,700 retailers. A new Collector shop tool lets retailers enable pre-orders to build customer anticipation for product releases, including Walmart-exclusive releases.

Walmart is rolling out several solutions for sellers to support holiday readiness. Walmart said it listened to sellers and their customers to reimagine the Global Seller Center app, which provides easy sign-up for eligible sellers in any market, so they can cross borders to sell in the U.S., Mexico, Chile and Canada. The first sellers to sign up after attending the Let’s Grow event gained access to cross-listing capabilities and free translations.

Walmart is also exempting merchants who ship their inventory to WFS fulfillment centers by September 30 from peak season storage fees. Merchants are encouraged to ship their inventory as early as possible to meet customer demand for holiday shopping and Walmart events. Walmart is also providing access to capital for qualifying merchants in the form of cash advances of up to $5 million.

The site also features a new Deals Dashboard, which should make it easier for sellers to register items for Walmart Deals events. The feature gives sellers more data and insights to improve the quality of deals and provide more deals to customers during the holiday season.

Editor’s Note: Supply Side Section Talk Business & Politics focuses on the companies, organizations, issues and people involved in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Fiery bow.

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