Neil Ashe has some explaining to do
President and CEO of Walmart Global eCommerce, Neil Ashe, made a cameo appearance during Walmart’s fourth quarter earnings presentation to shed light on omnichannel investments that caused the company to forecast 2013 profits below analysts’ estimates.
Walmart’s forecast first quarter earnings in the range of $1.11 to $1.16 and full year earnings in the range of $5.20 to $5.40. Embedded in those numbers are huge investments in ecommerce that will cost the company about nine cents a share.
"We are excited about the opportunities these investments will provide," said Walmart CFO Charles Holley.
An expense impact of nine cents a share at a company the size of Walmart is more than material, so Ashe was included in the roster of speakers commenting on results. He provided details on Walmart’s fundamental ecommerce strategy which entails four strategic priorities: to excel in the fundamentals of e-commerce, innovate in new areas like big data, social and mobile, win key markets such as the U.S., the U.K., Brazil, uniting and expanding the Walmart platform to do what no one else can do, and build a best-in-class e-commerce that can be combined with the retail footprint to deliver to customers what no one else can deliver.
"To realize these strategies, we’re developing a global technology platform, and we are investing in local assortment and fulfillment capabilities in each of our markets. We are becoming known for our ability to build and deploy technology for the benefit of our customers," Ashe said.
He noted that in the past year the company developed and launched a product search engine that is regarded as best-in-class and developed pricing optimization tools which allow for the deliver of reliably low prices to customers in the dynamic e-commerce pricing environment. He also said Walmart has made major advancements in mobile commerce and is operating one of the largest and most effective big data initiatives in e-commerce.
"The investments we’ve made so far in our e-commerce business are delivering. Revenue growth is accelerating and ahead of our plans," Ashe said. "During the fourth quarter, we took share in all of our key markets. In the United States, we led on key days and had our largest sales day on Cyber Monday. We served more customers more effectively than we ever have before."
In 2013, Ashe said Walmart will continue to penetrate key markets and drive the development of its global technology platform. The company will also invest in the development of what Ashe called, "the next generation fulfillment network that incorporates stores, distribution centers and online dedicated fulfillment centers," with the goal of being the fastest and most efficient at getting customers the products they want when and where they want them.