Walmart touts next growth engine
E-commerce was labeled Walmart’s next growth engine by Neil Ashe, the retailer’s president and CEO of global e-commerce during an investor presentation Wednesday morning.
Speaking at the Barclay’s 2013 Retail and Consumer Discretionary Conference in New York, Ashe laid out a vision for Walmart’s approach to e-commerce that involves home-grown technology, a deeper integration with physical stores and a dramatic expansion of product assortments because Walmart is one of the few companies who has brand permission to sell everything to everyone. He also said Walmart was committed to being at the forefront of technological innovation and this week planned to introduce a new home page that reflects how people want to shop. Ashe said Walmart’s simple, yet audacious e-commerce goal is to, “know every product and person in the world and have ability to connect them.”
To do so, Ashe said Walmart made a decision last year to in-source development of its technology which led to the creation of a proprietary search engine.
“We can’t do what we need to do and want to do with off the shelf solutions,” Ashe said.
Development of the search engine and other technological capabilities are essential to the philosophy outline by Ashe which calls for Walmart to excel at the fundamentals of e-commerce.
“If you want to build something really big that is going to last forever you better get the foundation right,” Ashe said.
In addition to technology, Ashe also described other foundational elements of Walmart’s approach as customer acquisition and retention, category development and assortment, customer experience and fulfilling promises.
Although Ashe, who joined Walmart in January 2012, characterized e-commerce as Walmart’s next growth engine he made no reference to Walmart.com’s sales or financial contribution and there was scant discussion of other performance metrics aside publicly available details from third parties. For example, Walmart.com has 45 million unique monthly visitors and the company’s home delivery operation in the United Kingdom is the second largest.
Walmart currently has an e-commerce presence in 10 countries, but is primarily focused on driving growth in the U.S., China, Brazil and the United Kingdom, where an investor field trip was held last week.
Domestically, Ashe was asked about the impact of the Marketplace Fairness Act and the impact of a level taxation playing field. He quoted former Walmart president and CEO Lee Scott who once questioned how a 5% to 10% price difference wasn’t a competitive advantage. According to Ashe, Walmart sees its best growth in states where sales taxes are collected from all players.