With US online retail sales on pace to reach a record $350 billion this year, conventional wisdom might suggest that traditional brick and mortar retailers are losing to online competitors. But Walmart, the classic example of a brick and mortar business, is reinventing the customer experience to bring together the best of digital and physical commerce in ways that pure-online retailers like Amazon and Jet cannot offer. As delineations between physical and digital storefronts fade, Walmart has recognized that the future lies in “omnichannel” retail — a world where retailers serve customers seamlessly through online, mobile, and in-store interactions.
Want to order a prescription on your phone and pick it up while grocery shopping? Want to have an out-of-stock item shipped to your home from a different store? Want to drop off an online return at the store instead of shipping it back? Done, done, and done. Consumers increasingly value the ability to shop anywhere, anytime, and an omnichannel approach allows retailers to meet those needs while presenting a consistent brand experience across the digital and physical worlds.
Omnichannel retail is a goal for most large retailers, but Walmart is both highly focused and uniquely positioned. With the world’s largest brick and mortar retail business and the third-largest US online retail business, Walmart is more capable than any other company to bring customers the best of both worlds. Its incredible scale (Walmart sales account for 2% of US GDP), a longstanding expertise in big data analytics, and a world-class logistics operation give Walmart an unmatched combination of assets to make omnichannel retail a reality. And the company is investing heavily, having hired over 2,500 employees at its ecommerce headquarters in Silicon Valley and dedicating over $1 billion annually to build a global technology platform to support its omnichannel vision.
The goal for Walmart.com is thus not to replicate Amazon but rather to use Walmart’s impressive network of digital and physical assets to deliver the best possible integrated experience to customers both online and offline. This intersection of virtual and physical worlds is one where Walmart clearly has the upper hand against competitors, and so far it seems to be working — Walmart’s online sales have reached $13 billion, and its ecommerce growth has outpaced Amazon’s since 2013.
As online retailers like Warby Parker and Bonobos open more brick and mortar stores, there is growing evidence to suggest that omnichannel is indeed the right path forward. Only time will tell whether Walmart will be able to execute effectively on its omnichannel vision, but for now I’m betting it’s a #winner.