Brief

Wal-Mart ramping up e-commerce strategy via marketplace

Dive Brief:

  • Wal-Mart is planning to add 1 million products per month to Walmart.com, primarily through the third-party marketplace integrated into its e-commerce site.
  • Walmart.com offers about 11 million products, compared to about 260 million on Amazon. It had 88 million online visitors in February, compared to more than 1.7 billion for Amazon, according to comScore.
  • Wal-Mart's online sales rose about 7% during its fiscal first quarter, but its rate of growth has been slowing.

Dive Insight:

Wal-Mart lately has been doing its best to embrace all of the different technology innovations—e-commerce, mobile payments, premium fulfillment memberships, drones, even robotics—that would otherwise help obliterate its traditional business model if it didn't embrace them. Maybe the brick-and-mortar retail world isn't going away quite that quickly, but if you want to run with the new giants of retail, you need to do it with technology.

It's certainly looking like the right rime to do that, as Wal-Mart warned analysts last year that its financial picture was looking pretty cloudy throughout this year and into next. Of course, increasing technology investment to the point where Wal-Mart was the world's biggest tech spender last year also has a way of further clouding the company's financial picture.

With all of this technology focus, Wal-Mart is taking more than a few pages from Amazon's success story. By focusing a good deal of the near-term expansion on its third-party marketplace, Wal-Mart is mimicking Amazon's growth of its own successful marketplace, which the e-commerce giant has used to extend its brand into some new market segments without actually having to market and sell the products in these segments.

Can Wal-Mart catch up with Amazon? Well, if it sticks to this plan of adding a million new products a month to its site, it should take Wal-Mart until, oh, about 2037 to hit that 260 million products mark Amazon currently is sitting on. Do you think Amazon will hold still for that long?

Filed Under: Technology E-commerce