This is the first of our six part series on Walmart’s pivot to digital.  Today, we’ll examine three key facets of Walmart’s digital initiatives and what implications this has for brands. Later we’ll examine how Consumer Electronics, Beauty, and Food brands are adapting to Walmart’s new digital shelf, and finish the series with a summary of a few best practices brands should use to win on Walmart’s online properties.  Also included, is a Q&A blog  post published this week with Planet Retail RNG senior analyst David Gray and Clavis Insight Chief Marketing Officer Danny Silverman, as they tackle several key questions generated by attendees of our recent special edition webinar, “Winning on Walmart Part 2: Driving Traffic, Sales and Share on Walmart’s Online Properties,” which can be found here.  

With nearly 12,000 stores, Walmart is the world’s largest brick-and-mortar retailer and controls one of the largest distribution networks around the world. These days, however, the retail giant is cutting back its investments in traditional brick-and-mortar retail and pivoting to digital technology and its online sales channel.  This shift seems to be the right strategy for the long-term health of the company, as it has begun to experience higher eCommerce growth rates compared to brick-and-mortar.  Unsurprisingly, this seismic shift has major implications for brands and manufacturers. To win in eCommerce, brands must now understand how to win with Walmart.com.

Walmart is in the midst of a massive transformation meant to diversify and heavily expand its digital ecosystem.  It aims to become a leader in eCommerce, and turn its massive brick-and-mortar network into a major asset for distribution and Last Mile innovation. Following Jet’s example, it released a completely redesigned website in May, aimed at turning Walmart.com into a direct competitor with Amazon.  Nonetheless, despite the similarities between the two online retail platforms, there are subtle differences with major ramifications for brands, and the path to success on Walmart.com will be very different from the path on other platforms such as Amazon.

In order to benefit from Walmart’s growing share of online sales, brands must understand what is unique about the marketplace, focusing on three key areas:

  • Content: Since Walmart.com rolled out its new design in May, the site’s new product detail pages (PDPs) now place a heavy emphasis on content and the shopping experience as a whole.  The overall look of the site is now much cleaner and less cluttered than Amazon, meaning users will immediately be drawn to the content itself, including consumer generated content and vivid images. To optimize performance, brands need to understand what Walmart considers to be a “Perfect Page.”
  • The Last Mile: Optimizing and innovating last mile fulfillment is arguably the most important emerging trend in eCommerce today. Because of its brick-and-mortar network, Walmart is able to leverage a larger distribution network (its stores) than Amazon and other retailers. In addition, its partnerships with fulfillment providers give Walmart a massive advantage in terms of delivering products to customers quickly and in more places. To win the Last Mile with Walmart, brands must have the ability to track availability, pricing, and promotion at the zip code level. 
  • Private Brands: Walmart is currently investing heavily in its private brand portfolio. These products compete directly with independent brands, so sellers need to understand Walmart’s unique approach in this area in order to compete effectively.  While its  discount house brand Great Value remains its largest seller, Walmart has begun to invest heavily in developing upmarket private brands - meaning that a whole class of manufacturers will suddenly find themselves competing directly with Walmart, across categories. To avoid losing Walmart sales, brands must be able to understand how their products rank in search performance versus these more budget friendly private label brands. 

 

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by Danny Silverman
CMO

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