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Walmart’s e-Commerce Sales Could Continue to Rise

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e-Commerce business remains strong

Walmart’s (WMT) e-commerce business forms a small part of its total revenue. However, it’s the key catalyst that’s expected to drive the company’s sales higher in coming quarters. Walmart’s digital sales grew 50% during the last reported quarter. Its sales rose 63% and 50% in fiscal 1Q18 and 2Q18, respectively.

Walmart’s management expects its e-commerce sales to grow at a brisk pace in coming years due to its customer-friendly initiatives and innovative offerings. Walmart expects its digital sales to come in at $11.5 billion in fiscal 2018. Its digital sales are estimated to rise 40% in fiscal 2019.

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Walmart’s digital initiatives

Walmart increased its digital initiatives with its acquisition of Jet.com, which proved to be a game-changer. Walmart made series of other acquisitions in the past one year that fortified its competitive positioning against Amazon.com (AMZN).

To bolster its online offerings, Walmart acquired ModCloth, ShoeBuy, Moosejaw, and Bonobos. Recently, Walmart partnered with upscale fashion brand Lord & Taylor to have its flagship store on Walmart.com. Walmart is bringing in people known as “category specialists” to improve its merchandising. Jet.com is rolling out its private-label brand “Uniquely J.” The exclusivity associated with the products catches young customers’ attention.

Target (TGT) has also been focusing on rolling out exclusive brands. Target is seeing high demand for its exclusive in-house brands and plans to launch 12 new exclusive brands by fiscal 2018.

Besides merchandising, Walmart has quickly revamped its delivery mechanism. It’s offering popular services like online grocery pickup and two-day free delivery on orders over $35. Meanwhile, the company is testing innovative services like delivery through Uber and its own associates. Walmart is testing unattended delivery in partnership with August Home. It also acquired Parcel, which would help Walmart offer same-day delivery service in New York City.

Walmart offered pickup discounts, introduced pickup towers, and partnered with Google (GOOGL) to provide voice-based shopping. All of these measures will likely support the company’s top-line growth. In comparison, Costco (COST) and Target are also investing in their digital arm. They’re offering faster delivery options.

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