In January, Walmart President and CEO Doug McMillon disclosed plans to place Walmart’s supercenters at the core of its new strategy to compete against the e-commerce giant Amazon.
During the meeting, McMillon shared his vision of using Walmart’s existing giant boxes to expand their online operations so there’s no need to spend on building new structures.
Walmart’s 180,000 square feet supercenters carry a vast array of products (groceries, electronics, clothing, sports equipment), and offer services such as money transfers, pharmacies, and salons.
These stores are ideal for the company’s planned web business expansion in a bid to take a huge chunk off Amazon’s market.
McMillon’s plan hinges on Walmart’s capacity and ability to draw in many customers 24/7, thereby increasing its profitability by making the most of its existing structures, and customer data.
By streamlining the business process, Walmart will profit from selling its customer data to different brands for online advertisements. Warehousing and shipping will also be offered to third-party online sellers.
Edge Computing To Inform Strategy
The retail giant intends to increase its capacity for “edge computing” so all data can be processed closer to the collection sites.
Establishing a faster and stronger data processing solution now will enable Walmart to handle the fast-changing landscape of edge computing technology in the coming years.
The company believes that improving the IT system of its stores will attract more third-party sellers. Their new platform will allow offline stores to process online orders without having to put up fulfillment centers.
“The time where people might have been worried that our boxes were too big has long passed,” McMillon told investors in a meeting.
“The supercenter footprint and positioning give us a great opportunity to expand services and help the economics of the model.”
Although Walmart’s performance consistently improved over the past years, it struggled with high expenditures which can put the company’s ability to sustain growth on the line.
Amazon Super Centers Vs Walmart
Amazon’s e-commerce dominance is a tough act to follow but with McMillon’s strategy of leveraging and improving the company’s assets, Walmart might be able to narrow Amazon lead.
The plan centers on utilizing the company’s most valuable assets – supercenters, rich customer database, and the centrality of Walmart in American communities – to create a digital structure that can compete with Amazon’s.