Walmart Canada Sees 229% Gain in Digital Sales

Need to Know

• Digital sales grew 229% in the quarter ending January 31 for the retailer’s stores in Canada.
• Net sales at Walmart Canada grew 8.6% in Q4, with comparable sales growing by the same amount.
• Online grocery sales, plus the deployment of pickup capabilities to 300 stores across the country, contributed to Walmart Canada’s e-commerce success.

Analysis

Walmart Canada had a huge digital quarter, the company reported this week, with online net sales spiking 229% in the quarter ending January 31.

Walmart Canada’s net sales for the quarter were up 8.6%, with comparable sales also growing by 8.6%. Overall online sales for Walmart increased 69% in the quarter, up from the 35% increase during the same time last year.

Walmart Canada demonstrated a huge commitment to digital innovation over the course of 2020, as COVID-19 drastically shifted shopping patterns. “COVID accelerated many of our digital aspirations,” Nicolai Salcedo, Walmart Canada’s chief information officer, said in December of last year. “For Walmart Canada, our ideal digital experience, whether it is in-store or online, starts with our customers in mind. We start designing things by listening to what our customers need.”

For Walmart, this included a $3.5 billion investment in “stores of the future,” which included earmarking $110 million for online-focused physical upgrades, such as the construction of two new micro-fulfillment centers. An existing hybrid concept store, in Vaughan, Ontario, currently serves as an incubator to test omnichannel capabilities and features.

The investment also includes a plan for 10 hybrid locations, with expanded fulfillment space; renovations to make space for e-commerce capabilities; the expansion of Walmart Grocery Pickup to 70% of Canadian locations by the end of the year; and the hiring of new staff who will be assigned to omnichannel-related roles. 

Speaking on an earnings call this week, Judith McKenna, Walmart’s President and CEO, also pointed out that Spark—the company’s in-house courier service—was launched first in Canada, further underscoring the company’s Canadian commitment to customer service-led innovation. Spark is now available in the US and Mexico; delivery, McKenna said, is a huge part of Walmart’s current business.

“We’re now doing about 1.5 million deliveries each and every week from stores, which is more than seven times what we were doing a year ago,” she said. “We’re doing this through a combination of our own Spark Driver platform and third-parties. We’re quickly getting items to customers and we expect to see delivery costs to continue to go down as we build volume and density.”

McKenna also noted that Walmart has enabled 586 on-demand stores at 1,390 pickup locations, built 63 stores, opened three new distribution centers, and rolled out Spark’s last-mile delivery program to almost 30 stores. “Going forward, we will double down on each of these fronts,” she added.

Walmart has launched a number of digital initiatives this year that have helped contribute to its e-comm success, including the expansion of its third-party marketplace, a livestream shopping pilot with TikTok, and the launch of Walmart+, its subscription program.