Walmart Says It Benefitted from Online/In-Store Holiday Synergies

Holiday sales at Walmart were boosted by the retailer’s in-store/online purchase synergy, CEO Bill Simon said Tuesday during a webcast from the Raymond James Institutional Investors Conference. Customers were able to fulfill orders made at Walmart.com through its 4,000 U.S. stores “all the way up to Christmas Eve,” compared with most e-commerce players who are “out of business because of the shipping deadlines,” Simon said. Walmart can “fulfill orders through our business on the ground either through fulfillment from store or a pickup in-store opportunity that others might not be able to do,” he said.

The fulfillment options also helped the retailer “oversell” what it had in stores on Black Friday by fulfilling orders for doorbuster items within days from Walmart.com, he said. Walmart’s one-hour guarantee for a $148 32-inch TV on Black Friday resulted in sales of 600,000 units in an hour in stores and “another 100,000 or so” that were fulfilled online during the promotional hour, Simon said.

The “integration of physical and digital retail” offers Walmart a “huge opportunity” that the retailer will continue to build on, Simon said. Online conversions are occurring at a higher rate since Walmart implemented its homemade Polaris search engine, Simon said. The retailer’s “pay with cash” program -- instituted within the last year as a way for customers with poor credit to participate in e-commerce by paying cash in-store when picking up the product -- has turned out to be popular with customers with credit cards, too, he said. The take from that is that “there are still some people out there who aren’t too sure about the whole Internet credit card thing,” Simon said. Another successful initiative is the Site to Store option, which enables customers to pick up items the same day they order online, he said.

Walmart is testing other e-commerce programs including Scan and Go, which allows shoppers to “self-checkout” using an app on their smartphone. The retailer has also launched a same-day delivery pilot, he noted. Walmart’s goal is “anytime, anywhere” shopping wherever it can expand its reach and offer consumers “our everyday low-price promise,” Simon said.

On the store side, Walmart will rapidly move to smaller formats -- below 50,000-60,000 square feet -- typified by its Neighborhood Markets and Express Stores, Simon said. Currently, 90 percent of Walmart stores are Supercenters, and the company will “continue to build those where we see the opportunities,” Simon said, including 125 this year. Some 115 small-format stores will be added this year, with 40 percent of new store openings now in the smaller footprint, he said. Walmart expects to be operating 500 small-format stores by 2016, he said.