Why Walmart Will Likely Continue to Dominate the Grocery Space
Walmart’s latest moves
In a short timespan, Walmart (WMT) has added several customer-friendly services that are helping it gain market share in the grocery segment despite heightened competition. For instance, the company expanded its online grocery services to more than 900 stores by the end of fiscal 2Q18. Moreover, to offer ease of shopping and enhance the shopping experience, Walmart rolled out order dispensers, called pickup towers. Also, the company partnered with Alphabet (GOOGL) to offer voice-based shopping. All these measures have resonated well with consumers and strengthened its digital capabilities against rival Amazon (AMZN).
Interested in WMT? Don't miss the next report.
Receive e-mail alerts for new research on WMT
On the operational front, Walmart managed to reduce its supply-chain days, which has resulted in fresher offerings. Also, the company is testing several other delivery mechanisms including delivery through Uber and its fleet of trucks and associates to reduce delivery time and last-mile shipping costs. Above all, the company managed to keep a tab on pricing, which continues to draw value-driven customers to its stores.
e-Commerce is an integral part of success
As consumers shift to the online mode of shopping and Amazon gains ground in the grocery space, it’s imperative for Walmart to strengthen its digital capabilities to maintain its market-leading position. Walmart hasn’t disappointed either. The company in the past one year has invested heavily in its e-commerce platform, which is evident from the growing digital sales in the US (SPY). The company’s e-commerce sales registered a YoY (year-over-year) increase of 60% in fiscal 2Q18, while sales jumped 63% in fiscal 1Q18. Meanwhile, Walmart is also fast becoming one of the preferred platforms for third-party vendors as reflected through its strong GMV (or gross merchant volume) growth of 67% in fiscal 2Q18.