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Why Walmart’s Digital Sales Could Grow at a Stellar Rate

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Acquisitions and partnerships

Walmart’s (WMT) focus on the expansion of digital fulfillment options and the recent acquisitions of online brands are expected to support the momentum in its digital sales. Walmart continues to buy online retailers to offer differentiated offerings, gain category expertise, and strengthen its digital offerings. Recently, the company acquired Art.com, a leading retailer of art and wall décor. Meanwhile, it acquired Bare Necessities, an online retailer of intimate garments, and ELOQUII, an exclusive fashion retailer for plus-sized women. Earlier, it acquired Moosejaw, Bonobos, and ModCloth.

The company’s strategy to acquire these in-vogue brands is expected to attract young customers who look for differentiated and exclusive products.

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Besides focusing on merchandising, Walmart has significantly expanded its delivery mechanism by partnering with on-demand delivery service providers. Recently, the company partnered with Point Pickup, Skipcart, AxleHire, and Roadie to offer online grocery delivery in cities across four states. Earlier, it partnered with Postmates, DoorDash, and Deliv to further strengthen and speed up its delivery process.

Walmart’s e-commerce offerings are expected to drive sales growth at its e-commerce business. The retailer plans to expand its online grocery pickup services to 3,100 stores by the end of this year and plans to offer doorstep delivery from about 1,600 stores.

Recent performance

Walmart’s digital sales have accelerated in the first nine months of the current fiscal year. The company’s e-commerce sales have increased by 33%, 40%, and 43% in the first, second, and third quarters of fiscal 2019, respectively.

However, rivals are slowly matching Walmart’s offerings. Target (TGT) has grown its digital sales at a stellar rate in the recent past thanks to the company’s expanded digital fulfillment options and exclusive brand launches. Meanwhile, Amazon (AMZN) is also growing its delivery business through Whole Foods in newer markets.

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