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they expected delivery within three days as standard, while 40% reported that delivery times of more than two days would stop them from making a
they expected delivery within three days as standard, while 40% reported that delivery times of more than two days would stop them from making a purchase.30 Grocery: The Next Battlefront in Ecommerce In August 2017, Amazon had purchased Whole Foods Market for $13.7 billion, thereby acquiring 460 brick-and-mortar grocery stores.31 In 2018, however, Walmart remained the leading grocery retailer in the US, with US food and beverage grocery sales of approximately $146.5 billion, or 21% of the market." Groceries comprised about 55% of its total sales.35 Amazon/ Whole Foods held about 3.7% of the US food and beverage market, or $25.4 billion. Walmart operated a total of over 5,000 US stores (including Sam's Clubs), 35 4,600 of which acted as fulfillment centers for its online grocery business.36 In October 2018, Walmart held about 13.5% of the US online grocery market, vs. 14% for Amazon.37 Analysts predicted that it would surpass Amazon by the end of the year.38 In 2018, Walmart relaunched its grocery delivery service. By the end of 2018, approximately 1,200 Walmart stores offered same-day grocery delivery,3 with delivery fees of $9.95 or less per order." In addition, 2,100 stores offered free curbside grocery pickup, a number that was expected to reach 3,100 by the end of 2019," while over 700 locations featured automated pickup towers for general merchandise." These pick-up options helped cut shipping costs and drive additional traffic to the stores. " In June 2019, Walmart began testing a subscription service that provided unlimited grocery delivery for orders of $30 or more," with no per-order fee, for $98 per year or $12.95 per month.45 Walmart's Omnichannel Strategy In 2018, Walmart remained the leading US retailer, with domestic sales of $331.7 billion (including online sales), compared to sales of $141.4 billion for Amazon's North America segment (excludes revenues from Amazon Web Services).* Walmart's US ecommerce sales increased 44% in 2017 and 40% in 2018.45. According to one estimate, its US ecommerce revenue was approximately $20.8 billion in 2018.49 Amazon's US retail ecommerce sales grew about 30.4% in 2017 and 29.1% in 2018.50 Walmart's biggest shareholder was Walmart Enterprises, a holding company co-owned by the three living children of Walmart's founder Sam Walton (one son, John Walton, had died in a plane crash in 2005). Sam's son Rob Walton sat on the board of directors, along with Stewart Walton, grandson of Sam and son of James Walton, who served on the board until 2016. In total, the Walton family owned 50% of Walmart's stock." The family took a long-term view of the company and was willing to invest heavily in Walmart's ongoing innovation. Going forward, Marc Lore described Walmart's ecommerce strategy as falling into three buckets: 1) master the fundamentals of ecommerce; 2) play offense using Walmart's unique assets; and 3) innovate, developing solutions for 10-20 years in the future. 52 Mastering the Fundamentals To Walmart, the fundamentals of ecommerce included developing digital tools for customers and associates; making the customer experience simple and easy across all channels; ensuring that customers could find whatever they were looking for; pricing items competitively; and providing those
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