6 Things We Learned About Walmart’s Love-Hate Relationship With Online Sales

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Despite decades of being the biggest name in bricks-and-mortar retail, Walmart has yet to repeat that success online. The company recently went on an e-commerce buying spree — snapping up Jet.com, ModCloth, MooseJaw, ShoeBuy, and possibly Bonobos — but will that be enough to compete with Amazon?

Bloomberg recently published a piece detailing Walmart’s mission to beat Amazon, from experimenting with free shipping offers to establishing Jet.com’s Marc Lore as the e-commerce guru at the retailer.

But in order to understand Walmart’s recent aggressive push toward online retail, you first have to understand the company’s back-and-forth with the entire concept. Bloomberg’s post includes a wealth of information on Walmart’s journey, but here are the six things we found interesting.

1. If At First You Don’t Succeed…

Walmart’s first foray into online sales came in 2000 when the company spun out its website to a separate company, Bloomberg reports. But after a year and a half, Walmart bought back the online business.

The result was disappointing sales and an over-abundance of inventory. The company had bet big that consumers would seek apparel online, when in reality it was all about electronics.

In wake of this sad showing the company continued its focus on creating superstores and expanding its bricks-and-mortar footprint.

2. …Try, Try Again

Bloomberg reports that Walmart once again jumped into the e-commerce ring in 2009 when it began a holiday price war with rival Amazon. The company also toyed with the idea of buying Lore’s first online retail juggernaut, Quidsi, but lost out to Amazon in the end. Instead, the company spent $300 million to buy a search engine, Kosmix.

In 2012, Walmart hired Neil Ashe to increase the retailers online investment. The new team, Bloomberg reports rebuilt the tech used on Walmart.com, introduced smartphone apps, and were instrumental in building six fulfillment centers.

3. Not Everything Is For Online

While Walmart steadily increased its online presence and sales, Bloomberg notes the company ran into issues, namely its promise of “Everyday Low Price.”

While the promise worked in-store, it didn’t translate online. Executives worried that when prices online dropped below the price in-store, customers would leave the physical locations to shop online.

Additionally, the company was hesitant to enter into a “marketplace” where third-party sellers could promote their products through Walmart’s online infrastructure.

And so, the company went back to focusing on building its physical footprint, Bloomberg reports.

4. The Reckoning

Bloomberg reports that when Doug McMillon took over in 2014, Walmart finally tuned its focus toward online.

Under McMillon, Walmart has begun to follow the shifting retail landscape by closing hundreds of stores and looking for the next big idea online. The company also began playing with the idea of creating an Amazon Prime competitor — ShippingPass — that offered free two-day deliveries.

“There was a realization that you have one shot to get that customer back in the door, so you better make sure you get it right.” Sanford C. Bernstein & Co. analyst Brandon Fletcher tells Bloomberg. “This is their last window to get it right.”

5. Coming Together

Bloomberg notes that the Aug. 2016 deal between Jet.com and Walmart was mutually beneficial: Jet.com needed an influx of cash and Walmart needed a push to beat Amazon.

Once the $3 billion deal was finished, Lore and his team took over all of Walmart’s e-commerce division.

Since then the company has implemented a number of online strategies: It ditched ShippingPass in favor of offering free two-day shipping on millions of products with a lower minimum purchase price and began offering discounts on products ordered online but picked up in-store. Just last month, the company began testing in-store screens that let shoppers buy things online if they couldn’t find them while inside the big box store.

The company has also worked to expand its reach by purchasing a handful of online retailers, including woman’s clothier Modcloth, shoe store ShoeBuy, outdoor retailer Moosejaw, and men’s fashion retailer Bonobos, although that deal has not been completed.

6. The Future

Under Lore’s direction, Bloomberg reports, Walmart’s online activities will continue to evolve. For example, Lore is focusing on groceries by adding more stores to the company’s online ordering, in-store pickup process.

The company has also been testing an in-store pick up tower that is meant to get online customers inside stores, with the thought that they might just pick up more items before heading home.

Additionally, Lore is working to expand the Easy Reorder service, Bloomberg reports. The program takes everything you purchase in-store to your Walmart.com account. When you run out, you just go online click buy and the product would be ready to either ship or pick up at a local store.

Of course, with every step Walmart takes to meet Amazon, Amazon takes one of its own, crowding into Walmart’s long-time advantages: physical stores.

Amazon is currently prepping the launch of its Amazon Go stores, opening new bookstores, toying with the idea of opening a fleet of physical stores or just buying someone else’s.