Walmart to sell e-commerce tech to smaller rivals in latest challenge to Amazon
Walmart has found a new source of revenue: selling the state-of-the-art e-commerce tech it has developed to small and medium sized retailers.
The retailer said on Wednesday that it would make available for purchase the technology it has developed to allow shoppers to order items online and pickup them up at a store. Walmart is also providing the tech needed to add these smaller retailers’ products to Walmart’s online marketplace easily, something that will also expand Walmart’s online marketplace assortment, a top priority for Walmart U.S. CEO John Furner.
While it might seem counterintuitive that Walmart would help competitors, they are smaller and will find the tech from another vendor anyway if need be. It’s the same pragmatic approach that has seen Amazon develop its technology and sell it to rivals. For Walmart, it means more pay-off for the tech it develops.
“Commercializing our technologies and capabilities helps us sustainably reinvest back into our customer value proposition,” Furner said in a press release. It is also consistent with Walmart’s efforts to generate more revenue beyond its core retail operations, such as its bigger push into providing space for advertising in its stores and website.
More specifically, Walmart will be selling the technology that enables the picking and packing of online purchases by employees and the geofencing technology that lets a store know when customers are on their way. To offer cloud-based services, Walmart will work with Adobe, which will sell the software via a subscription.
Buy online and pick-up in store is becoming an increasingly important feature for even small retailers to offer rushed shoppers and those less willing to linger for a long time in a store. Adobe’s Digital Economy Index has found that U.S. retailers with the option saw 22% of ordered completed that way last month, compared to 7% only three years, with the pandemic speeding up the already growing trend.
While Walmart lagged Amazon.com for years, most recently it has made to blitz to better hold its own against its rival. In 2020, U.S. e-commerce sales rose 79% to above $65 billion, though Walmart’s e-commerce remained much smaller that Amazon’s. But having thousands of stores where customers can retrieve orders has given it an edge over Amazon on that front. And this initiative is a way to get even more bang for its tech buck.
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