Walmart CFO Touts Online Grocery Advantages

Assortment can boost margins, voice can boost frequency
Photograph: Shutterstock

While lots of retailers are rushing to participate in the growth of grocery e-commerce, few have the potential to do it as profitably as Walmart, CFO Brett Biggs said.

Speaking at the Evercore ISI Retail Summit in Atlanta last week, Biggs said the retailer would increasingly look to its wide assortment as a means to improve the margin mix of its orders while further developing convenient means of replenishmentincluding voice shopping and deliveries inside customers’ homesthat will boost frequency.

Brett Biggs
Photograph courtesy of Walmart

These abilities will become unique advantages for Walmart over time, Biggs predicted, explaining how increased assortments available in Walmart stores—as well as its massive online business—is resulting in more items being available every time a customer visits its website or app.

“Over time, our ability to better mix up that basket from a margin perspective is a real benefit,” Biggs said, according to a transcript from financial documents firm Sentieo. “There’s a lot of our competitors that are doing online grocery. But we'll be able to mix that basket out much differently than our competitors, and that will be a big advantage.”

Biggs added that Walmart would “get more and more involved with [the] customer in their home,” saying the company was continuing to test ideas such as having personal shoppers deliver straight into homes, as it had done in partnership with a delivery company and August Home smart locks in 2017. Biggs also referenced “things we’ve tested with Google”presumably a voice-enabled shopping capability reportedly set to roll out later this year.

“We’re going to get more and more involved in that customer’s life to where they don’t even have to think about shopping with Walmart,” he said. “They’re just shopping and we’re keeping them in stock.”

Online grocery has become a “significant” driver of e-commerce sales at Walmart, which totaled $15.7 billion in the U.S. in the fiscal year ended Jan. 31, the company said in its annual report. Its rapid rollout—it will be in 3,000 stores this year, Biggs said—is helping the company burnish its reputation with shoppers while prompting shoppers to reprioritize their choices.

“It’s been a real halo with our customer,” he said, explaining that the company “leaned into” growth on favorable customer reaction, “and it’s caused the customer to look at us in different way.”

“When that search goes through someone’s head of ‘Where am I going to shop?’ Walmart is top of that search,” he said. “And we're always there in the stores, certainly. But now with stores, with e-commerce and all the new brands we put on e-commerce, the partnerships we've done, online grocery and delivery, we are definitely getting higher and higher on that list with customers.”



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