Walmart is serious about growing its online marketplace business. The retailer has teamed up with Shopify to enable sellers from the platform to sell their goods on walmart.com. The agreement between the two companies is potentially bad news for Amazon.com. Walmart is the second biggest e-commerce site in the U.S. and growing its business at a rapid pace (74 percent in the last quarter). Shopify is the second largest online platform in the country with more than one million companies.
Jeff Clementz, vice president, Walmart Marketplace, wrote in a company blog that the retailer is committed to growing its third-party seller base and is focused on recruiting small and medium businesses with product assortments that complement its own and with stellar records of customer service. Initially, 1,200 Shopify sellers will list products for sale on walmart.com.
Research published earlier this year by Tinuiti puts the number of third-party sellers on Walmart at 33,000. Fifty-seven percent of Amazon shoppers also shop on walmart.com. Shopify sellers will be able to “seamlessly list” products for sale on Walmart’s site, according to Mr. Clementz’s post. A spokesperson for Walmart told RetailWire that Shopify sellers “can apply to utilize Walmart Fulfillment Services (WFS).” The service is positioned as a low-cost way for third-parties to use Walmart to pick, pack and ship items ordered from walmart.com.
Discussion Questions: What is your take on the significance of the Walmart/Shopify deal? What will it mean for Amazon and others such as Target that also have online marketplaces?
Comments from the RetailWire BrainTrust:
This represents a fantastic opportunity for Walmart to ramp up their assortment in a decidedly non-Amazon way which is to closely vet all incoming merchants. All merchants through this system (like their regular onboarding channels) will be monitored. Thus avoiding the problems that Amazon has faced with having an open-door policy: counterfeiting, gray market resellers, and fake reviews being the most concerning. However, Walmart only plans to add 1,200 new merchants to their platform via this initiative this year. Either that is a comment designed to downplay their hand, or it will be a drop in the ocean versus the ocean of sellers Amazon recruits each month.
Kiri Masters, Founder and CEO, Bobsled Marketing
Walmart proves once again, the path to dominating retail will require continued investment in digital partnerships, supply chain collaboration, and data monetization strategies that too many other retailers still lack the courage (vision or cash) to “lean in” on. Kudos to Walmart for continued smart investments, even in the era of COVID-19. The gloves were off long ago versus Amazon. Walmart has been all in on digital transformation for years now, with a superior supply chain and brick and mortar foundation, now leap-frogging other traditional retailers still sitting on the sidelines.
Brent Biddulph, General Manager, Retail & Consumer Goods, Cloudera
This year’s e-commerce wars are my favorite reality show. Since splitting with Jet.com, Walmart faced an urgent need for a new partner to catapult its e-commerce strategy into the 2020s. Partnering with Shopify helps Walmart access tech expertise, scale fast and boost assortment variety. Notably, Walmart could finally win with young, urban shoppers – some of whom may also be Shopify vendors. This play could boost their loyalty by deepening Walmart’s commitment to small businesses and local communities. Shopify wins by helping its small vendors access a massive market, especially since the pandemic ignited a shift to value shopping.
Lisa Goller, Content Marketing Strategist
This relationship will benefit both partners, but Walmart is definitely getting the best end of the deal. Toby Lutke has built a unique and powerful platform in Shopify that makes large scale e-commerce as accessible as eBay and Marketplace. Walmart online shoppers and resellers will certainly benefit from that.
Ben Ball, Senior Vice President, Dechert-Hampe
Never underestimate Walmart! They have a specific goal in mind for the percentage of revenue they want to have by 2024 and they have the logistics bones to make it happen. The combination of store fulfillment may make the difference in their approach and will be very interesting to watch. Fasten your seatbelts!
Zel Bianco, President, founder and CEO Interactive Edge
I think this is yet another good move by Walmart – they seem to be out-Amazoning Amazon. Logistics is a huge challenge for small online retailers, and so utilizing Walmart’s significant logistics capabilities will be extremely helpful. This coupled with Shopify’s leading online platform makes for a strong offering. Given the bad press Amazon has received about how they harvest information from their third-party “partners” to inform their own products, this definitely puts Walmart in the preferred partner category.
Mark Ryski, Founder, CEO & Author, HeadCount Corporation
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