Wal-Mart Continues to Push Ahead in Online Retail

Discount retail giant Wal-Mart has just reported its first fiscal quarter revenue improved by 1.4 percent—to $117.54—falling only slightly short of analyst forecasts of $117.74 billion. Perhaps more importantly, the earnings per share rose by 2 percent—up from $0.98 to $1—from this period one year ago; and that profit was higher than a Thomson Reuters consensus estimate, which had been $0.96 cents per share.

According to Wal-Mart CEO Doug McMillon, on an earnings conference call, Thursday, “Inside the company we can see that we’re moving faster to combine our digital and physical assets to make shopping easier and more enjoyable for customers, but we can also see plenty of room to improve.”

You may be aware that the big-box retailer has been made a concerted effort to expand in the realm of e-commerce, in an attempt to corner as much of the digital online market that remains after Amazon continues to thrive. For example, the company recently acquired Jet.com, which also means Wal-Mart was able to absorb the talents and experience of founder Marc Lore, who is now Wal-Mart e-commerce division CEO.

Acquiring this platform, of course, was only the first step. Wal-Mart has also rolled out strategies like free two-day shipping on orders over $35, another direct vie for Amazon’s benefits (of a Prime Membership).
McMillon goes on to say, “We need to scale our e-commerce business further and see some additional strength in our store comps to deliver the results we know we’re capable of — so that’s what we’re focused on.”

And, sure enough, Wal-Mart’s online gross margin values rose by 69 percent. As such, Barclay’s food and staples retail analyst Karen Short recently accounted, “E-commerce is working [for Wal-Mart]. And it’s not coming at the expense of brick-and-mortar, because you need both to survive.”

And then, Short goes on to say that even with Amazon’s overbearing web presence and success, Wal-Mart continues to stand out from its peers and contemporaries. Buying Jet.com, of course, had a lot to do with Wal-Mart’s strides to stay ahead. Online-only discounts, in-store pickup, and a new incubator lab focused on robotics continues to help Wal-Mart push the online retail envelope in ways that no other company can, so time will tell just who does emerge on top in the end.

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