Walmart saw Q1 U.S. e-Commerce sales jump 33% year-over year, a quarter after seeing online revenue growth slow down to 23% during the 2017 holiday season. But the retail giant still has work to do if it seeks to reach its lofty guidance goal of 40% e-Commerce growth in 2018.
In Q1 2018, Walmart posted a positive earnings report, seeing:
- Revenue increase 4.4% to $122.69 billion, beating Thomson Reuters estimates of $120.51 billion;
- U.S. same-store sales jump 2.1%, beating Thomson Reuters estimates of 2.0%;
- U.S. foot traffic jump 0.8%, signaling higher ticket sizes; and
- Sam’s Club same-store sales increase 3.8%, driven by comparable traffic growth of 5.6%.
Walmart’s e-Commerce explosion from late 2016 through most of 2017 was driven by a string of acquisitions and a three-fold increase in its online assortment to 70 million products. But even with these brands added to the portfolio, analysts and investors question whether the growth is sustainable.
Investors have been wary of Walmart’s optimistic projections in 2018, with the company’s stock price dipping more than 21% since its peak on Jan. 29.
To make its 2018 revenue goal a reality and quell investor concerns, Walmart is doubling down on e-Commerce investments. The company is encouraging more online purchases, expanding in-store pickup capabilities to 2,200 stores and adding 500 more “pickup towers” by the end of the year.
Walmart rolled out a completely revamped e-Commerce site in May, designed to bring a more human element to the shopping experience with more local and personalized elements and specialty shopping experiences in the home and fashion verticals.
After months of waiting, Lord & Taylor is launching a flagship store on Walmart.com in the coming weeks. To differentiate these offerings from Walmart’s lower-priced labels, customers will see a banner with the words “Premium Brands from Lord & Taylor” on relevant pages.
Walmart even launched its own mattress and bedding company in March, Allswell, which is presently sold exclusively online. Products aren’t sold on Walmart.com or in Walmart stores. The new offering — which Walmart describes as an “Instagram-worthy dream bed” — aims at the more affluent and digitally savvy customer that the retailer has been making a big push to reach in recent years.
Beyond the new partnerships and investments in the U.S., Walmart hopes that its fortunes overseas can supplement income driven at home. The retail giant made its biggest investment yet in acquiring a controlling stake in Indian e-Commerce company Flipkart for nearly $16 billion. While Flipkart wouldn’t contribute to U.S. e-Commerce revenue (and the purchase is a clear hit to Walmart’s short-term income), the potential of online retail growth in India is too significant to ignore. While the market was $20 billion in 2017, it could reach as high as $73 billion by 2022, according to Forrester.