Walmart had been hearing complaints for years owing to poor customer service. But, it seems like everything is back on the right track for Walmart, as it has seen a higher-than-expected 10% increase in shares in the first quarter, this year.
They have invested a whopping $ 2.7 billion last year for improving customer service, and directed this amount towards wage increases, scheduling improvements, employee training, improving its stores and and better syncing of inventory in order to avoid stock-outs.
The result of this effort is quite evident.
- The retailer’s customer service scores have increased for 79 weeks straight
- An increase of Walmart’s U.S same-store sales by 1% in the most recent quarter, and an increase of 1.5% traffic has been seen
- Last year, Walmart provided all sales personnel with handheld smart devices to better support customers, and not have to run back and forth on the floor
But, amidst all the excitement of increased offline sales at Walmart, the online part of the business is seeing declining growth rate steadily over the different quarters that just passed.
Walmart is the second biggest online retailer in the world and Amazon is the first. But, the statistics that talk about how the first and second position holders are performing tells Walmart that they have to scale up their e-commerce efforts a lot in order to catch up with the online retail giant.
While Walmart’s e-commerce sales have only increased by 7% this quarter, Amazon’s increased by 24%.
While Amazon’s e-commerce sales amount to around $ 79,268 million (74.1% of total e-commerce sales), Walmart’s e-commerce sales amount to around $ 13, 484 million (2.8% of total e-commerce sales). This is a huge disparity we can observe between the 2 retail companies.
Image Credit: Fortune
Unarguably, Amazon has the widest online presence globally, larger selection of products, more successful mobile app and customer loyalty program on Amazon Prime. Walmart had invested billions in 2015, for hiking up its online sales.
Related: How to sell on Amazon.com?
What is Walmart doing to improve its e-commerce sales?
- Walmart has invested in its mobile app and fulfillment of online grocery orders( from which more than half of Walmart’s revenue flows in). Number of unique visitors to its mobile app increases 20% year over year, but Amazon’s rose 64% at the same time.
- Walmart is constantly expanding its online assortment- it now has around 10 million different products. But that again is a fraction of Amazon’s 250 million.
- They have increased the number of stores where customers can pick up their groceries by ordering online to 150 in 20 markets from 140 a few months ago.
- The company also launched its own Walmart Pay Mobile System
- To pit against Amazon, Walmart is also planning to test drone delivery
- Walmart introduced a rival Amazon Prime called Shipping Pass. This offers unlimited 3 day shipping costing $ 50 year, which is almost half of what Amazon charges for 2-day shipping through Prime. But, Shipping Pass would offer only 1 million items to be shipped compared to 20 million through Amazon Prime.