Walmart, which remains the world’s largest department store chain, has reported impressive fourth-quarter 2019 financial results (announced on Tuesday, February 19, 2019). Key to the success has been Walmart’s digital transformation, which is noted by CEO Doug McMillon: “Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share. We’re excited about the work we’re doing to reach customers in a more digitally-connected way. Our commitment to the customer is clear.”
As to how this digital strategy was put together and where Walmart will focus on next has been reviewed by leading experts in the retail space, and they’ve provided Digital Journal with their analysis.
Making a success of online services
A proportion of Walmart’s success can be put down to its strong online presence, notes Michael Lagoni, CEO and founder of Stackline: “Walmart has been successfully executing its online-forward strategy, laying down aggressive e-commerce growth targets and making some savvy geographic expansions and acquisitions across key verticals, like specialty apparel and grocery. ”
This model is set to pay further dividends, Lagoni predicts: “As Walmart continues to expand its digital footprint and adds new advertising and merchandising toolkits for brands, we see huge opportunities for accelerated revenue growth on the e-commerce side of the business.”
The figures produced from Walmart signal that the chain remains robust and able to stand-up to disruptors that only maintain an online presence. This is noted by Harry Chemko, CEO and co-founder of Elastic Path: “Walmart is the only retail giant that has enough competitive strengths to challenge Amazon’s e-commerce lead – they have the physical locations, strength in grocery and scale. They’ve been investing very heavily in e-commerce, and their year-over-year growth shows that it’s paying off.”
While Walmart is behind Amazon in terms of online sales it has the potential to become an even bigger player if is seeks to monetize the massive amount of data the company has on hand.
Digital transformation success
Digital transformation has played a key part in Walmart’s success, according to Eli Finkelshteyn, CEO and co-founder of Constructor.io. He tells Digital Journal: “Walmart’s recently released Q4 2018 earnings report validates the company’s emphasis and investment in technological innovation.”
The types of digital initiatives have included a focus on engaging with the customer: “Walmart and its subsidiaries have been putting a lot of effort into making online grocery shopping an easier, faster, and more comfortable experience for their customers, and it shows based on grocery growth last quarter.”
Developing good technology challenges assumptions that customers are only interested in lower prices, as Finkelshteyn explains: “Repeated studies have shown that customers are willing to pay and buy more when the online customer experience is improved. At the same time, fewer customers become frustrated and leave without buying anything. We can see both Walmart and its subsidiaries like Jet.com making great strides here.”
Based on the recent success, Finkelshteyn predicts further customer-focused digital transformation initiatives: “Going forward, we expect to see Walmart and other retailers will continue to improve their online customer experience as more and more grocery sales move from brick and mortar to online. This is a nascent, but growing market, and one where retailers will either innovate or lose.”