Walmart: the reasons behind its success

As advanced in a previous article, Walmart revealed its second-quarter earnings which were beyond expectations and it is set to become an online giant competing with firms like Amazon. Besides investment in e-commerce and new technologies, what are the reasons behind its success?

According to an analyst at CRRA, a research company, the key for Walmart has been to pay less attention to Amazon and to shift the focus of its online business to grocery. This is its strongest feature in physical outlets. Moreover, instead of taking down the online giant, more success is attained if it turns its efforts towards clobbering other offline stores as retailing in general consolidates and this is something the supermarket has been doing ever since it opened its doors.

Another important factor that has contributed to its growth is the expansion into other categories such as apparel and shoes. These have wider profit margins than groceries. The analyst advanced that thanks to these, Walmart has “found [its] footing in e-commerce and focus — and that’s mostly grocery so far. [It has] been spending a lot of capital expenditures, and it will pay off in higher same-store sales growth”. Moreover, it is spending more on new strategies. For instance, by January, it is going to offer in-store grocery pickup at 3,100 stores.

Walmart will offer offline in-store grocery pickup at more outlets