Walmart's online sales soar (WMT)

Walmart reported comparable-store sales growth for the 11th straight quarter in Q1 2017, but, even more importantly, the company grew its US e-commerce sales and gross merchandise volume (GMV) by an incredible 63% and 69% year-over-year (YoY), respectively.

That digital growth helped the company increase revenue by 1.4% YoY to $117.5 billion for the quarter.

Although Walmart has acquired a string of startups in recent months, company executives said most of the online sales growth came through Walmart.com. The acquisitions may have contributed to that growth, though, since Walmart has been listing some merchandise from its newly acquired brands on the flagship site. This could be attracting new customers to Walmart.com, as most of the acquired companies appeal to younger and higher-income consumers than the retailer has traditionally drawn.

The growth indicates the company’s overall efforts around digital are paying off. Besides diversifying its product assortment, Walmart’s e-commerce acquisitions have also brought in new talent, including Jet.com founder Marc Lore, who now leads the company’s push to compete with Amazon in digital retail. In addition, it recently rolled out a new two-day, free shipping policy, which prompted Amazon to lower its own free shipping minimum for non-Prime members. Executives attributed some of Walmart.com’s increased traffic and sales to the new policy. Additionally, Walmart recently started discounting online orders that are picked up in-store, rolled out new mobile app features for its pharmacy and money services customers, and opened a new tech incubator in Silicon Valley.

However, Walmart is still far from competing on even ground with Amazon in the US e-commerce sector. Walmart doesn’t break out its total online sales numbers, but Internet Retailer estimated its 2015 online sales were $13.7 billion, and its online sales have hovered at around 3% of total sales in recent years. In comparison, Amazon’s online retail revenue topped $90 billion in 2016, when the e-commerce titan took 43% of all US e-commerce sales, according to research firm Slice Intelligence. Even more alarming, Slice estimated that Amazon captured 53% of the growth in the US e-commerce market last year. Walmart clearly started 2017 on a positive note, but it will have to do far more to catch up with Amazon, which shows no signs of slowing down.

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Walmart's online sales soar (WMT)

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