Walmart is hosting its first seller summit businesses that are part of its third-party marketplace. The two-day event includes how-to sessions and remarks by the retailer’s top leaders.
Melissa Repko | CNBC
LAS VEGAS — Walmart is looking for new ways to woo sellers to its third-party marketplace, as it pushes to drive more online sales and close a wide gap with rival Amazon.
On Wednesday, the big-box retailer kicked off its inaugural Walmart Marketplace Seller Summit, a two-day invitation-only event of how-to sessions drawing more than 1,500 people from businesses that sell clothing, party supplies, jewelry and more on Walmart’s website. The event will be headlined by some of Walmart’s top leaders, including CEO Doug McMillon.
The company on Wednesday also announced new efforts to attract and retain sellers. Starting early next year, its marketplace will expand to Chile, the first country beyond North America. It is increasing the number of brand shops on its website, a way for sellers to create their own eye-catching digital storefronts where they can highlight certain products.
It is also adding an option that allows sellers to pay Walmart to fulfill online orders of bigger and bulkier items, such as canoes, or items that come in multiple boxes, such as a patio set. And it’s making it possible for sellers with a store to use Walmart’s technology to power curbside pickup or the company’s network of delivery drivers to drop online purchases at customers’ doorsteps.
Walmart is ramping up its focus on its third-party marketplace, as the company chases higher-margin e-commerce sales and pledges to grow its profits at a faster rate than revenue over the next five years. To do that, Walmart is adding automation to more warehouses and stores. It has also gotten into businesses outside of retail that are more lucrative, such as selling advertising, last-mile delivery and fulfillment services.
In a blog post announcing the marketplace changes on Wednesday, Manish Joneja, the senior vice president of Walmart Marketplace and Walmart Fulfillment Services, described the business as an “endless aisle where sellers of all sizes can offer customers the items they need and love.”
He said customers get a wider selection of items to buy, whether that merchandise is owned by Walmart or a third-party seller. And Walmart and the seller’s business grow at the same time, he added. Sellers share a portion of their marketplace profits with Walmart.
Joneja is one of the Amazon veterans that Walmart has poached to grow its marketplace business. He also previously worked for marketplace, eBay. Walmart also hired another Amazon veteran, Jare’ Buckley-Cox, as vice president of Walmart Fulfillment Services.
Sellers that participate in the marketplace are also potential customers for Walmart’s newer businesses, since they can hire Walmart to pack and ship orders or to advertise their products. The number of sellers using Walmart Fulfillment Services grew more than 50% in the most recent fiscal quarter, Chief Financial Officer John David Rainey said on an earnings call earlier this month.
Walmart is the nation’s largest retailer, but it lags far behind Amazon in online market share and e-commerce sales. Walmart’s annual online sales were less than one-fifth of Amazon’s last year, according to Insider Intelligence. Walmart is a distant second in market share to Amazon, which captured nearly 38% of e-commerce sales in the U.S. last year compared to Walmart’s roughly 7%, according to the market researcher’s estimates.
Walmart’s marketplace is also much smaller than Amazon’s, despite launching in 2009. Walmart has not disclosed how many vendors are part of its marketplace, but it sells to customers in the U.S., Canada and Mexico.
Amazon, on the other hand, operates a store website that’s open to sellers in 22 countries, including Australia, Germany, Japan and the United Arab Emirates. It has used its Amazon Prime membership program to drive higher online sales volumes.
Though it trails far behind Amazon, Walmart has shown signs of momentum. For the past two quarters, its U.S. business has posted double-digit online growth as other major retailers like Target, Best Buy and Macy’s have posted declines. E-commerce sales for Walmart U.S. jumped 27% in the fiscal first quarter and 24% in the fiscal second quarter, respectively, compared with the year-ago periods.
On an earnings call earlier this month, Rainey said customers buying items on Walmart’s marketplace increased 14% in the fiscal second quarter. He said general merchandise sold well on the platform in the three-month period, with double-digit growth across the home and apparel categories, even as Walmart and other retailers have seen weaker discretionary spending.
