With over 10k+ stores in 20 countries, Walmart is the largest retailer in the world. It is also the second most preferred e-marketplace platform in the US with a 6.3% market share in the country, to add to a global $70.3 bn of revenue, according to eMarkerter.
Regardless of these numbers, you may already be familiar with the immense scale of this retail giant. But, have you wondered, what is it that sets it apart? What has made Walmart the force it is today?
Consider this: back in 1945, when founder Sam Walton, bought a retail store to set his business dream in motion. He paid a rather large sum of $25,000 for a retail store in a nondescript US city of Newport, AK. It may not have been most noteworthy of business decisions in retail history!
Yet, out of about 2.7 million such retail businesses at that time, Walmart has come to tower over anything and everything in the retail landscape, redefining the evolving industry. What is significant is that during all these years, whether Walmart pioneers transformation with innovation ― or plays catch up, it seems to know just the right ingredients to win.
Likewise, with a legacy spanning more than half a century, it brings a different eCommerce perspective, to achieve “Amazon-esque results”. This emphatically came to the fore, during the pandemic-crisis, when Walmart flipped the narrative and dominated the game ― by out-performing Amazon, the market leader, with higher sales.
Regardless of the scale of this behemoth, its approach to eCommerce is a trendsetting example, to win in the competitive industry. In this blog, let’s put the spotlight on Walmart’s eCommerce business practices, and know how to build an eCommerce platform like Walmart.
In its 60+ years of existence, Walmart is the Tom Brady of retail – consistently winning it all, with sustained resilience and a constant focus on self improvement. Let’s trace its journey from the start and move to eCommerce.
When Sam had bought the stores in the ’40s, he had set the foundation of a simplistic yet effective motto – win over your customers by offering greater value, by leveraging high volumes.
The business kept on expanding in the years to follow, navigating challenges. It’s only in the ’60s that the business took the name of Walmart. Its journey continued, with another significant development coming in 1970, when Walmart registered on NYSE. Similarly ’80s (and beyond) witnessed the Walmart juggernaut propelled ahead underpinned by rapid expansion of stores. It also included multiple acquisitions.
The key to the company’s success has been the following:
One can point out that Walmart’s success strategies are the same ingredients that have spurred the success of online marketplaces – naturally the strategy of leveraging volumes in lieu of higher profit margins, to meet revenue targets, gels well with multivendor eCommerce ethos as well.
In Walmart’s case though, their eCommerce journey didn’t start with a bang. They started online sales as early as 2000, but did not really push for dominance, until 2016.
Few reasons for the same could be: eCommerce, as a sales imperative, gained traction only later on. Moreover, during those times, Walmart could have viewed online sales as a cannibalizing channel to their core offerings. While their investments, attention, and core competence was brick and mortar ― a high-performing online presence, could have undermined the very pillar they have stood on for the past 40 years, compromising their competitive advantage. Or in other words, as Clayton Christensen puts it Walmart faced “The Innovator’s dilemma”.
But, gradually, the global retail landscape evolved…
eCommerce was no longer an additional sales channel for businesses, it became “THE” sales channel, compelling even legacy businesses like Walmart to recalibrate their eCommerce strategy.
And ever since that phase, or the post-2016 period, Walmart accelerated its advance, prioritizing eCommerce as a unified sales channel along with its chain of retail assets. Also in doing so, it met its competitors’ challenge head-on, by setting its business proposition distinctly apart from the market leader.
The key takeaways from Walmart’s eCommerce strategy are as follows:
With more than two decades of existence, eCommerce is an integral part of everyday lives. While western markets have matured some time back – even global markets, that were slow to adapt to online shopping, are now opportune playing fields for global eCommerce orchestration.
Today, consumer expectations are defining the evolution of eCommerce businesses. With brick and mortar advantages of location, personal relations, etc. nullified by a virtual domain address, the eCommerce advantage is purely leveraged by value – prices, faster delivery, exceptional service, et all.
In such scenarios, the Walmart business model has expeditiously achieved user traction to dominate eCommerce in the US, in less than a relatively short span of time.
To understand how Walmart was able to achieve such accelerated growth, let’s know the key areas over how it has differentiated its value from other eCommerce platforms, particularly Amazon, eBay, and the likes:
In summary, by executing its business model, Walmart has built an ecosystem for all business participants. For buyers, they are offering low prices, last mile shipping, multichannel shopping experiences, a vast product range, and more. For sellers there is an ecosystem to scale and relatively a more conducive ecosystem. For the business itself, there is a limitless opportunity to grow even further.
Significantly, the most detrimental aspect is low prices for Walmart. While intrinsically the business will involve multiple considerations, from the outset it is a low-price. Notably, this strategy is also one the most easy to gain traction with the users. Walmart has taken the low price business model to scale and this opens up opportunities as also discussed later in the blog.
Unarguably, the scale and legacy of Walmart will be difficult to match from the word go, yet, notably, if one analyzes Walmart’s business over time – it is a journey of sustained business sense defined by a clear value proposition – executed by purpose-driven business resilience.
Walmart started its journey with a well defined positioning of its brand. Over the years, it has built the business around that core message – adding predictability and in the process garnering buyer expectations. Its processes and policies turn these expectations into experiences. Likewise, even as an eCommerce force, it has leveraged its clear USPs, as mentioned above, to establish itself among the top three.
In fact, back in the day, when eCommerce emerged as a disruptor of brick-and-mortar retail, it was speculated that Walmart, with all its eggs in the offline retail basket, will struggle to exist. What ensued in the years to follow, was contrary to these expectations.
As mentioned earlier, even though Walmart truly entered the eCommerce race post 2016, following its acquisition of Jet.com, Walmart caught up to its key competitors, by leveraging its key strengths, and gaining traction over users, with its defined USPs. Here again the retail behemoth emphasizes the significance of well defined business objectives, especially in the competitive eCommerce space.
For the success of your endeavor, the first thing is to define this “value”. This value is best defined when it solves a key problem/need/roadblock for a buyer.
Identify this problem/need by conducting extensive market research. You can consider the following steps to execute a market analysis.
All efforts made at this phase can serve as a stepping stone for the platform. Insights driven by data contribute to mitigating uncertainties and aid in creating robust market tactics.
An eCommerce platform offers both direct and indirect revenue streams. The direct streams are as follows:
While these are direct revenue streams, there are multiple indirect sources of revenue from an eCommerce platform, especially once the business starts to scale. Consider the following:
A Walmart-styled business can potentially scale big, which means higher volumes like the retail giant itself. Hence, these revenue streams are just some of the many ways an e-marketplace like Walmart can earn.
After conceptualizing your eCommerce strategy, the next consideration will be the important thread in the eCommerce business – the platform to conduct the business.
For an eCommerce platform like Walmart, you first need to analyze what are the features that allow users on the platform to conduct their eCommerce activities smoothly – and marketplace operators to manage operations efficiently.
Multichannel capabilities: For seamless multichannel experience, there are features such as Walmart’s pickup service, or Buy Online and Pay In Store (BOPIS), to allow buyers to buy products online. They can complete the checkout at the physical store, by paying and collecting the item.
Data insights: In today’s world, you need quantifiable insights to feed your decision making. Data is the quintessential tool that drives results-oriented business decisions, for both the sellers and the marketplace operators.
Seamless Fulfillment: eCommerce is driven by fast, efficient, cost-effective shipping. Automations, optimized operations, as well as lower carrier rates can bring desired results.
Platform workflows: Automated and synched operations, logic-driven UX, a high performing engine are some of the critical components that foster enhanced workflows, rendering a sustainable advantage to businesses.
Optimized overheads: In the competitive domain of eCommerce, business overheads can be make or break for businesses pushing for that minutest of advantage over competitors. In these scenarios, a lower overhead baggage can minimize the drag coefficient for the business to propel forward.
You can go about building your platform in a number of ways, depending upon the degree of involvement you want to invest in the process, both in terms of time and capital.
On one end of the spectrum, you can hire developers to code your eCommerce platform right from the ground up. For obvious reasons, this is the most resource intensive process and will require your team’s involvement during the entire time.
The other end of the spectrum is using a self-hosted readymade solution. Because eCommerce platforms globally are connected by some common underpinnings, there is a scope for readymade eCommerce solutions.
For example, a platform based on Amazon will have more in common with a platform based on Walmart, than there are differences. The reason is the constant evolution of these marketplace platforms, which in turn is foundationed on competitor analysis.
Hence readymade solutions, built, (and constantly evolved) by studying popular market platforms, have a universal application. Unless a business has a unique set of requirements, a well-built readymade solution will help them bypass the need for coding the eCommerce platform from scratch.
These two are the most popularly adopted since they maximize benefits either way. Then there are also other options in between. For instance, you can choose SaaS-based solutions, if you are still unsure of your business idea. Since these come with recurring costs, an achilles heel for eCommerce competitiveness ― such solutions can undermine success once the business grows, with significant costs.
Now that you have the eCommerce platform set up, the next would be getting users onboard. Deciding between onboarding sellers or buyers, is itself a business strategy. Popular marketplaces like Walmart have had their unique way to approach this conundrum. Once the plan is in place, you can follow these steps to market your business.
These are some ways in which you can work towards marketing your eCommerce marketplace business.
FATbit Technologies offers a holistic approach to help you get started in eCommerce, launch your platform, and scale – in the following ways:
FATbit offers readymade solutions – Yo!Kart to build a marketplace like Walmart, right off the bat. Yo!Kart gives businesses the advantage of 10 years of development invested in the solution. The self-hosted solution has all the bases covered with essential eCommerce features and multiple business APIs pre-integrated, logic-driven UX and pleasing UI, extensive data-insights, and more – all encapsulated in a high performing system.
Apart from being a rich-featured solution, Yo!Kart gives businesses the advantage of low overheads. The solution can be purchased for a lifetime of use with a single payment package. There are no recurring or any hidden charges thereafter. This helps businesses keep overheads low, and transfer this benefit in the form of low prices or additional services to the users.
Furthermore, there is an in-house team that covers any need for customization.
Yo!Kart comes with standard inclusions that include free installation on a server of choice. Further, there is free technical support for upto 1 year. Also there is bundled Digital Marketing services that can help businesses build a robust launchpad for growth in the competitive eCommerce market.
Yo!Kart is built to scale – an imperative for multivendor platforms like Walmart, which have high volumes as their core strategy. The solution has a robust, secure and reliable underpinnings that is the growth engine of large scale marketplace businesses.
Moreover, the in-house customization team can give you the technology-driven innovation to lead, aligned with Walmart’s business strategy. For instance, if you plan to introduce a functionality in the platform, to outperform your competitors, you can rely on the customizable Yo!Kart-powered platform and the expertise of the team.
Thus FATbit’s business relation with clients is a sustained support of a technology partner that starts with offering a leading eCommerce product – Yo!Kart and can continue to cover comprehensive requirements of the client.
Walmart, is a half a century long story of tenacious business resilience, forged over time, underpinned by being steadfast, taking challenges head-on, consistently leveraging innovation, and being proactive against the competitors.
Starting a marketplace like Walmart means not only getting inspired by Walmart’s business strategies, but also Sam Walton’s visionary providence and pertinacity towards his vision. Moreover, Walmart highlights the critical part operations and technology play collectively in eCommerce success.
That said, eCommerce is a complex business that will require you to be dynamic with your plans. While we have touched on some brief considerations in this article, your eCommerce journey will be unique in itself. A sustained and holistic focus towards the aspired objectives, can give you a competitive advantage in the market.
While you focus on achieving your business goals, you can rely on eCommerce technology solutions from FATbit Technologies. With a versatile and readymade solution, Yo!Kart gives you reliance on contemporary technology, to set you forth for dominance in eCommerce.
We create future-focused content to help you stay updated. Follow us on Twitter to get notified about latest tips, trends and product updates.
Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.