Walmart's E-Commerce Sales Soared In Its Latest Quarter

Walmart showed healthy growth in its e-commerce business in Q4 2016, with global e-commerce sales increasing more than 15% year-over-year (YoY), and US e-commerce sales gaining 36% on the prior year's quarter.

However, even with a 1.4% YoY uptick in foot traffic at brick-and-mortar locations, and comparable store sales growth of 1.8% YoY, total revenue was relatively flat at $130.9 billion for the quarter. This signals that Walmart still has work to do in increasing e-commerce as a portion of total sales, particularly as it looks to better compete with Amazon.

Walmart highlighted several recent e-commerce and omnichannel investments that helped drive its online sales growth: 

Walmart didn’t break out separate numbers for Jet.com, but said the newly acquired e-commerce startup contributed heavily to its US e-commerce growth.

Orders through the Pickup Today service, which enables same-day pickup for items ordered online and is available in domestic Walmart stores, grew 27% YoY.

The Scan & Go app, which launched last year for Sam’s Club stores, contributed to increased online sales for the warehouse chain. The app allows shoppers to scan items as they add them to their carts in-store, and then pay the final bill through the app.

Walmart launched a Global Import Store on JD.com, the China-based e-commerce giant in which it owns a 12% stake.

In order to ward off competition from Amazon, Walmart is continuing to enhance its online presence, while exploring ways to bridge its online and in-store sales and operations. Walmart recently began offering free two-day shipping on online orders of more than $35, and company executives say they have seen an uptick in online sales in response. The new shipping policy is clearly aimed at undercutting Amazon, which offers free two-day shipping for Amazon Prime members who pay a $99 annual membership fee. Walmart also recently acquired online shoe retailer ShoeBuy, as well as outdoor apparel and gear e-tailer Moosejaw, in an effort to gain more online sales and expand its product offerings for a higher-end customer segment.

However, even with its impressive growth numbers and various investments, Walmart's total e-commerce sales still make up a small portion of its business. Online sales only make up 3% of Walmart’s total sales, which means that even with double-digit gains in e-commerce, the retailer still isn't keeping pace with Amazon — Internet Retailer estimated that Walmart's 2015 e-commerce sales were $13.7 billion, while Amazon’s were $92.4 billion. Walmart’s various e-commerce and omnichannel initiatives are triggering impressive growth, but it's not yet enough to catch up with Amazon in the e-commerce market.

(Business Insider)