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How Walmart’s Digital Initiatives Could Pay Off

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Walmart expands digital offerings

As Walmart’s (WMT) e-commerce business was the primary catalyst behind its impressive stock performance in 2017, the slowdown in its digital sales has irked investors. However, Walmart has expanded its digital offerings, which are expected to reaccelerate its e-commerce growth, and in turn, its stock.

Walmart has expanded its online grocery pickup services to more than 1,400 stores and expects to close fiscal 2019 with 2,100 locations offering the service. This expansion is projected to grow its e-commerce sales, as its online grocery pickup services are popular among shoppers.

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To make customers’ shopping experience easier and more convenient, Walmart is expanding its doorstep delivery offerings by partnering with on-demand services such as DoorDash and Postmates. Additionally, Walmart is adding pickup towers with lockers to save time. Walmart has revamped its website and added exclusive brands, and continues to invest in price, all moves that are expected to strengthen its competitive positioning.

Outlook

Walmart is confident in its digital initiatives. The company expects e-commerce sales to grow 40% in fiscal 2019, suggesting sequential improvement in future quarters.

However, the competitive landscape poses challenges and could affect Walmart’s e-commerce sales. Amazon (AMZN) is expanding delivery through Whole Foods to newer markets, while Target (TGT) is matching Walmart’s offerings. Costco’s value proposition continues to attract shoppers to its stores, while Kroger is strengthening its grocery business. We believe Walmart’s second-quarter results could provide more insight into its prospects, as the company is expected to update its fiscal guidance with the release.

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