Walmart Merges E-Commerce and Product Buying Teams

Need to Know

• Walmart announced plans to combine its online and in-store buying teams to form one unit in an effort to make prices and the customer experience more consistent.
• The shuffle is also resulting in six executive-led category teams that will be responsible for every item sold by Walmart in the US. The consumable and food groups categories will begin joint buying immediately, while the rest of the buying categories teams will roll out over time. 
• With its online grocery business booming, Walmart predicts its global e-commerce sales will reach $50 billion this year.

Analysis

Thanks to an expansive digital push, Walmart recently reported e-commerce growth of 37%. Hoping to build on that momentum, the retailer has devised a plan to merge the e-commerce and in-store buying teams creating a consistent in-store and online shopping experience. 

Currently, manufacturers interested in selling their products both on Walmart.com and in Walmart’s physical stores had to pitch two separate buying teams, a process that often led to clashes in assortment decisions and pricing. With e-commerce sales predictions reaching $50 billion this year, the new structure will not only improve internal processes but place the retailer in a better position to compete with online giant Amazon.

The retailer will create six category teams falling under consumables, apparel, and entertainment and others. Each focused team will be led by an executive and eventually be responsible for buying every item sold by Walmart in the US. This siloed approach will allow each dedicated department to focus on growth in a specific way, which is particularly helpful for departments such as consumables. 

Walmart recently announced plans to expand its online grocery offering to include more profitable non-grocery items, targeting Amazon’s customer base. The retailer is also taking on Amazon when it comes to fulfillment with its recent rollout of Walmart Fulfillment Services (WFS). Competing with Fulfillment By Amazon, WFS is a service for online sellers that gives them access to the retail giant’s extensive fulfillment capabilities including storing, picking, packing and shipping.

Hoping to get more customers on board with its mobile app and shop its e-commerce platform, Walmart pivoted its social strategy to include a more conversational brand tone and increased social presence. So far the pivot is working, Walmart saw app downloads increasing 50% week-over-week. 

While Amazon continues to hold down first place in the e-commerce world, Walmart’s focused efforts continue to place it closer and closer to the top.