In an effort to continue streamlining its online and offline channels, make its e-Commerce operations more profitable and deliver more consistent pricing, Walmart is combining its U.S. online and store product buying teams into one omnichannel merchandising team. Previously, product manufacturers selling items both in Walmart stores and on Walmart.com had to pitch to two separate buying teams.
In a memo to employees, Walmart U.S. e-Commerce head Marc Lore and U.S. stores head John Furner said the buyers will be broken up into six categories: apparel; consumables; entertainment, toys and seasonal; food; hardlines; and home. The teams will buy all of Walmart’s items by category, regardless of where they are sold. While the consumable and food groups will begin joint buying immediately, the other categories will integrate over time.
Chandra Holt will serve as Chief Merchandising and Integration Officer for Walmart eCommerce, and lead the “omni-merchandising” initiative, the memo said. Previously, Holt led merchandising for e-Commerce at Sam’s Club. Holt and the leaders of the six product category teams will report to Scott McCall, who Walmart named Chief Merchandising Officer earlier this year.
Walmart has been slowly integrating executives in different departments; last year the retailer combined its online and store supply chains and finance teams.
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Internal clashes between Walmart’s store and e-Commerce operations have been heavily documented since a July 2019 Recode report indicated that the retail giant projected $1 billion in U.S. e-Commerce losses for the year. The teams have collided over pricing differences between online and offline products, as well as developing plans to leverage stores as vehicles for home delivery, according to The Wall Street Journal, which reported the story ahead of the memo.
“Our customers see one Walmart, and they expect the same low prices and seamless experience no matter how they choose to shop with us,” Walmart spokesperson Kevin Gardner said in a statement. “Today we are making changes that put the customer at the center of how we buy and sell merchandise.”
Walmart has since responded to some of the store/e-Commerce conflicts by selling off ModCloth, laying off hundreds of Bonobos employees (alongside the exit of Founder and former CEO Andy Dunn in January), folding Jet.com operations into Walmart.com and most recently shuttering its NYC-based Jet black shopping service.
Despite the reported e-Commerce losses, Walmart continues to see significant sales growth in the channel: online sales jumped 35% in Q4 and 37% overall for the year. The company expects e-Commerce growth to slow to approximately 30% in fiscal 2021, but said it’s focused on driving up the sale of general merchandise such as apparel. Walmart CFO Brett Biggs said the company expects e-Commerce to be flat or slightly lower than last year, suggesting that there is still a long way to go for this division to reach profitability.
