It may be walmart.com, but on the retailer’s site, customers can shop the offerings of hundreds of retail sources, in a new development that reflects Walmart’s continued efforts to expand its online presence and leverage the retailer’s superior analytical and supply chain capabilities.
The expanded marketplace options on walmart.com include approximately 600 external merchants, though that number continues to grow. These merchants usually represent specializers in their particular product offerings: Christmas Central, for example, sells mainly holiday-themed items, with about 109,000 stockkeeping units in its assortment. Although it sells on several other marketplaces as well, such as Amazon and eBay, Christmas Central has found its greatest success through Walmart’s website.
The reason for this success likely has to do with the benefits that Walmart offers, including ship-to-store options and the availability of nearby store locations to visit in case of any problems. When they place orders through Walmart’s website, customers can rest assured that they can have the product delivered to their local store, then check its quality before taking possession. Thus if the color or size ordered from the external merchant is not quite right, they can leave the products with a Walmart sales clerk for return, without having to deal with it themselves.
Another source of advantage comes from Walmart’s strong ability to work behind the scenes and make it easy for its partner retailers to sell through its site. In particular, in collaborations with several marketing and technology firms, Walmart has created means for retailers to provide their specific product data automatically to Walmart, for updating and analysis. Furthermore, they can link their own e-commerce methods to Walmart’s site through the available technology. Such efforts are resonant with Walmart’s famous collaborations with consumer goods companies, such as Procter & Gamble, in which the partners share their data to ensure their strategies are aligned and offering the best value to consumers.
It also applies a vetting process to all potential retail partners, to confirm that they are a good fit for Walmart’s customers. For example, it checks the seller’s prices, in comparison with those of competitors, to ensure that anything being sold through walmart.com fits with the broader goal of offering everyday low prices and strong value to customers.
Walmart rolled out its marketplace capabilities relatively slowly, causing some experts to worry that it would never be able to catch up to rivals such as Amazon and eBay that have long supported independent retailers’ sales efforts. Indeed, while Walmart seeks to hit 1000 merchants on its site, Amazon already has about 2 million, and eBay features more than 25 million separate sellers. But the slow rollout and extended trial period also has enabled Walmart to ensure that its technology resources are sufficient to make the process easy, safe, and valuable for both its retailer partners and its customers.
Discussion Questions:
- How does Walmart’s online marketplace work?
- Do other retailers have similar programs? If so, which ones?
Source: Fareeha Ali, Internet Retailer, July 19, 2016.