Walmart Bets On Ever Faster Delivery to Compete With Amazon
Research firm eMarketer’s recent prediction that Amazon.com (AMZN) would control nearly half of all U.S. e-commerce this year prompted many analysts to focus on the converse—that Amazon’s online competitors continue to fall further behind.
But Walmart.com CEO Marc Lore says not so fast.
The retailer’s extensive network of 4,700 stores gives Walmart the distribution points it needs near most Americans to achieve its ultimate goal within five years: same-day delivery of fresh and frozen food, as well as other Walmart wares, to most of the country. That’s something Amazon also has its eye on and was a key factor in its $13 billion decision to buy Whole Foods last year.
“We’re playing to our strengths right now,” Lore said at Fortune’s Brainstorm Tech conference in Aspen, Colo., on Monday. “Everyone is racing toward same-day delivery and I think we’re set up really well.”
Lore has promised Walmart investors that its U.S. e-commerce would grow 40% this year, making new strides in grocery delivery even more crucial. Last week, its jet.com division announced a new distribution center in New York City’s Bronx borough, a facility likely to handle walmart.com orders down the line.
Though Lore has played his cards close to the vest, he made clear that Walmart (WMT), which he joined two years after selling jet.com to the giant for $3 billion, will invest aggressively in faster delivery.
“We can see where the puck is going- it’s toward faster delivery time,” said Lore.
Same-day delivery will be the bare minimum a retailer needs to offer customers, especially for the 100,000 or so items Walmart sells most commonly. So a web site that is only transactional and about convenience won’t be enough for consumers.
That is why Walmart has been busy in the last year and a half buying brands such as Bonobos, Modcloth and Moosejaw, and recently started to host a section on its e-commerce site for struggling fashion retailer HBC’s (HBC) Lord & Taylor, the first of many such deals Lore has said people should expect. “Proprietary product and assortment is going to be key,” he said.
Yet building up Walmart’s delivery speed will remain a key objective, and an area where Lore believes Walmart can effectively fight Amazon.
“That’s a big place where we’re going to play offense and ultimately win,” he added.