close
close

Fashion front and center at Walmart’s online store

Fashion has long been one of the many big businesses of brick-and-mortar giant Walmart Inc., playing a supporting role in the mass retailer’s giant grocery business.

But apparel is now taking center stage in the retailer’s next big growth vector: e-commerce.

More from WWD

When John David Rainey, executive vice president and chief financial officer, appeared at Morgan Stanley’s global consumer and retail conference on Wednesday, the first question was about online operations.

“E-commerce is one of the greatest strengths of our business,” Rainey said.

While Walmart’s U.S. sales rose 4.4 percent to $109 billion in the third quarter, e-commerce grew 24 percent. And its related advertising business, which sells exposure to brands using the company’s platform, grew 26 percent.

“What’s different about Walmart today than maybe a few years ago is that our value proposition is still relevant,” Rainey said. “It’s much more than just prices and value. It’s also convenient. We see it in customer behavior. We see this in customer research. Perhaps the most telling element is what we have seen with online pickup and delivery, which is the single largest element of our e-commerce growth.”

While many companies saw online sales peak during the pandemic and then slow down, the CFO said Walmart has maintained its accelerated growth rate.

“In many ways, we just serve customers (the way) they want to be served,” he said. “We’re known for being a brick-and-mortar retailer, we’ve been doing well for 60 years, but we’re not doing very well in the e-commerce space.”

Walmart has successfully taken a page out of Amazon’s playbook and is selling not only the inventory it purchases, but also providing a marketplace where other brands can also sell to take advantage of the company’s scale and traffic.

“The market is really exciting for us because throughout our history we have been primarily a retailer in our own right,” Rainey said. “And with our marketplace, which allows us to start selling additional inventory, additional goods. Currently, there are approximately 400 million items on our market, half of which are clothing.

“These are items that you traditionally can’t buy at Walmart,” he said. “Thanks to this, we are opening up to a much larger number of customers who want to shop with us. The economics around this also vary in terms of structure (profits and losses). But as more and more customers come to our market, we have more eyes on us, and as a result, we have more advertisers willing to spend their money there.”

The potential for this virtuous cycle puts fashion at Walmart at the forefront at a time when the company becomes increasingly competitive with Amazon and Shein looks to expand her low-cost, fast-growing business.

This action reflects efforts made to improve the clothing offer also in Walmart stores.

The budget battle for the heart and soul of the fashion customer has not begun yet – it is already underway.

The best of WWD