Walmart Restructures and Refocuses to Compete with Amazon: Business Casual
On Tuesday, March 3, Walmart will be launching their new fulfillment services, enabling third-party vendors to showcase their items on Walmart.com’s marketplace and use the company’s logistics to store, pack and ship their products. While sellers will pay a fee, Walmart’s new fulfillment services should drive profitability for these smaller third-party vendors while offloading the stress of logistics.
Hosts Daniel Litwin and Taylor Bagley gave their thoughts on Business Casual, MarketScale’s B2B morning radio show.
Litwin remarked, “So, they’re basically building a third-party network so that they can take in some money from these third-party vendors, but then also, basically create a competing network to go up against Amazon.”
“I think it’s really interesting to see them figure out how to redesign what they’ve established over the past few decades,” replied Bagley. “They’re not new to the space of eCommerce. What they’re really trying to do is figure out, one, how to make this a model that’s going to be profitable, and make this a model that’s going to be able to compete with somebody like Amazon who was built this way from the ground up.”
With a possible investment in fleets to provide shipping and delivery, additional space to store these non-Walmart products, as well as third-party branding and packaging issues, Walmart’s fulfillment services will create a new level of responsibility for the company.
In addition, Walmart is also stepping up their eCommerce game. By combining their big-box buying team with their eCommerce buying team under co-leadership, customers should see a leveling out of pricing which has been somewhat sporadic between their brick and mortar locations and their digital marketplace.
“They are basically doing some internal consolidation to create more consistency between their in-store and their online presence,” Litwin said.
In fact, per a memo from Marc Lore and John Furner, co-execs for this team, this move will better integrate the company while benefitting the customers.
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