Wal-Mart sees success in expanded e-commerce efforts

by Monica Watrous
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Wal-Mart e-commerce
Wal-Mart's better-than-expected sales in the U.S. were driven in part by recent e-commerce efforts.

BENTONVILLE, ARK. — Wal-Mart Stores, Inc. delivered better-than-expected sales results at its U.S. stores in the recent quarter, driven in part by recent e-commerce efforts. Comparable sales increased 1.6%, with traffic up 1.2%.

Doug McMillon, Walmart
Doug McMillon, president and c.e.o. of Wal-Mart

“This was our eighth consecutive quarter of positive comp sales and our seventh consecutive quarter of positive traffic,” said Doug McMillon, president and chief executive officer, during an Aug. 18 earnings call with financial analysts.

Net income attributable to Wal-Mart Stores in the second quarter ended July 31 was $3,773 million, equal to $1.21 per share on the common stock, up 8.6% from $3,475 million, or $1.08 per share, in the same period a year ago. Revenue increased 0.5% to $120,854 million from $120,229 million. Excluding foreign currency translation, revenue increased 2.8% over the past year.

“We continue to see proof that our customers enjoy a seamless shopping experience,” Mr. McMillon said. “The distinctions that we talk about today between stores, apps, pickup, delivery and sites are continuing to blur into the background for customers. For them, it’s just Wal-Mart.”

Jet.com grocery shopping
Wal-Mart's acquisition of Jet.com builds on recent initiatives to expand its on-line grocery.

Building on this foundation, Wal-Mart earlier this month agreed to acquire on-line retailer Jet.com for $3.3 billion in cash in addition to $300 million of Wal-Mart shares to be paid over time.

“Operating Walmart.com and Jet.com will allow us to reach even more customers and drive a higher level of growth more quickly,” Mr. McMillon said. “One of the things we like about the technology they have developed is that it rewards customers in real time with savings on a basket of goods and puts them more in charge of the price they pay. This empowers customers in a way that is true to the spirit of Wal-Mart.

“When customers build a basket of goods on-line rather than ordering one item at a time, shipping economics are in their favor and ours. Wal-Mart’s advantage has always been in providing the lowest prices on a basket, and Jet has created a unique way to deliver the lowest cost basket on-line."

Marc Lore, Jet.com, Wal-Mart
On completion of Wal-Mart's Jet.com acquisition, Marc Lore, president and c.e.o. of Jet.com, will join Wal-Mart as its new president and c.e.o. of e-commerce.

On completion of the acquisition, which remains subject to regulatory approval, Marc Lore, president and c.e.o. of Jet.com, will join Wal-Mart as its new president and c.e.o. of e-commerce. He will be responsible for both the Wal-Mart and Jet brands in the United States.

“Marc is a passionate merchant and innovative thinker who will definitely add value to our business,” Mr. McMillon said. “I look forward to working with him.”

Neil Ashe, who previously led Wal-Mart’s e-commerce effort, will leave the company at the end of the fiscal year.

“During Neil’s tenure, we more than doubled our e-commerce GMV (gross merchandise volume), became the second most trafficked e-commerce site in the U.S., re-platformed Walmart.com, opened a national fulfillment center network and most importantly, became known as a great place to work for talented technologists and e-commerce professionals in Silicon Valley.”

Wal-Mart on-line grocery pickup
Wal-Mart has seen success with its on-line grocery pickup service.

Additionally, Wal-Mart has made advancements in the United States on priorities to build digital relationships with customers, scale its assortment and expand on-line grocery, Mr. McMillon said.

“Customers also continue to enjoy our on-line grocery pickup service and give it high marks,” he said. “We added grocery pickup to 30 more markets this quarter, bringing our total to more than 60 markets and nearly 400 locations. It is gratifying to see how much of this service helps our customers save time.

“Next, we are growing our marketplace offering at a strong pace. Since the beginning of the year, we have added about 7 million new items to the assortment and today offer approximately 15 million s.k.u.s (stock-keeping units).”
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