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Online Groceries Driving Walmart’s Growth, CFO Says

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By Published On: March 18, 20190 Comments

Speaking to investors last week, Walmart’s Chief Financial Officer, Brett Biggs said that online groceries have been a “brand halo” for the cross-channel department store chain.

As the business moves to solidify its role as an e-commerce player, Biggs says that Walmart’s online grocery offer has attracted new customers and proven the company’s expanding digital capabilities.

Speaking at the Bank of America Merrill Lynch 2019 Consumer & Retail Technology Conference last week, he emphasised the role Walmart’s online grocery service will play in its e-commerce growth over the next 12-months.

“When we see things that are working, online grocery could be one of them,” he said. “We roll that out much more quickly than we used to… and time will tell if we invested the right amount.”

According to Biggs, e-commerce will account for roughly 35 percent of the company’s sales in 2019, with the number of stores offering grocery pick-up expected to increase from 2,000 to 3,000 by the end of the year. Grocery delivery is also expected to double from 800 stores to almost 2,000.

In the last financial quarter, Walmart grew e-commerce sales by 43 percent (40 percent over the last fiscal year) and reported a 3.3 percent growth in overall ticket sales in its grocery segment.

Biggs also believes that the combination of online and in-store offerings is helping the business thrive in what’s an otherwise tough e-commerce climate.

“For us, the real sweet spot is getting people to come in-store and buy online,” he said. When Walmart engages shoppers across its two key sales platforms, Biggs says that overall brand engagement is boosted across both channels.

However, he has acknowledged that further work is required if Walmart wants to make the most of its online and in-store grocery offering. Tinkering with the tricky logistics of online orders is one example Biggs discussed at the conference. Moving forward, he says the business will be more flexible, using a combination of third-party delivery partners, crowd-sourcing platform’s such as Spark Delivery, and in-store picking and packing by store associates. The company is also reportedly investigating the benefits of using store associates to complete local deliveries on a more permanent basis.

According to the CFO and Vice President, the company’s bricks-and-mortar supercenters are a vital cog in its e-commerce machine, as they are a major asset in getting online orders to customers’ car trunks and doorsteps.

“E-commerce is challenging. Running a physical footprint is also really challenging, and we’re really, really good at this, and we’re getting better on the e-commerce side,” he said.

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