Walmart tries to turn on its e-commerce game

The retailer plans to spend more on e-commerce and slow down store openings, in hopes of catching up to Amazon.

Ben Fox Rubin Former senior reporter
Ben Fox Rubin was a senior reporter for CNET News in Manhattan, reporting on Amazon, e-commerce and mobile payments. He previously worked as a reporter for The Wall Street Journal and got his start at newspapers in New York, Connecticut and Massachusetts.
Ben Fox Rubin
2 min read
Francis Joseph Dean, Corbis via Getty Images

If you've been waiting for a new Walmart supercenter to open in your town, don't hold your breath.

Walmart has become the biggest retailer in the world thanks to its 11,500 stores. But guess what? These days, the big-box operator is a little more interested in talking up its online persona, Walmart.com, which it hopes will help re-energize sales and challenge Amazon.

At an investor event Thursday, Walmart executives laid out a plan to pour billions more dollars into online expansion, while cutting down new store openings.

"This company over time is going to look more like an e-commerce company," CEO Doug McMillon told the crowd.

Walmart is hoping this big investment will build up its marketplace of independent merchants selling on Walmart.com, improve shipping speeds and jump-start its stalled online sales growth. The retailer expects to double its number of large-scale warehouses used for online sales to 10 by year's end, according to a Thursday report from Reuters.

Walmart has gotten much more serious about e-commerce this year. It closed a $3.3 billion purchase last month for online retail startup Jet.com, and on Wednesday it nearly doubled its investment in JD.com, the second-biggest e-commerce player in China.


Walmart bought Jet.com last month to help it take on Amazon, one box at a time.

Ben Fox Rubin/CNET

All these online efforts could help Walmart become a more significant competitor to Amazon -- the dominant player in e-commerce -- giving consumers more shopping choices and helping keep prices down. Also, for smaller merchants, having other strong marketplaces around could ensure they don't have to rely too much on Amazon for their sales.

Amazon representatives didn't respond to a request for comment for this story.

Just about any way you look at it, Walmart still has a very long way to go to catch up to Amazon. Walmart.com's inventory is still a fraction of Amazon's and despite Walmart's plans for 10 big warehouses, Amazon already has about 40, according to the Reuters report. Last year, Walmart's online sales were $13.7 billion. Amazon's sales (excluding its cloud-services business) were $99.1 billion -- seven times more than Walmart's.

Walmart is hoping to change some of its weaknesses with Jet. At Thursday's event, Jet co-founder Marc Lore, who took over as Walmart's head of US e-commerce, said he plans to use smarter logistics to save money on shipping costs. For example, Jet's software can connect local buyers to local merchants on Jet's online marketplace, helping avoid shipping products across the country.

He also plans to use Jet's more urban, younger base of shoppers to bring in more high-end brands to its marketplace, though he didn't mention any specific brand names Thursday.

Walmart and Jet, Lore added, also have a "huge advantage" of having a network of more than 4,600 stores in the US, which the company can use for in-store pickups, returns and shipping for online sales.

But Walmart needs to create new connections between online and retail locations, integrate Jet into its systems and jump into the holiday shopping season. The retailer has plenty of work cut out for it.