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Walmart Marketplace Expands to Better Compete with Amazon

Walmart is ramping up its competition against Amazon to become a dominant force in e-commerce. Describing itself as the world’s largest omnichannel retailer, Walmart’s online platform has expanded considerably over the past year. According to Marketplace Pulse data, more than 25,000 sellers have joined Walmart Marketplace during the pandemic, bringing the total to around 60,000. This is only a fraction of Amazon’s 2.5+ million active sellers, but the recent growth spike along with Walmart’s well-established base of more than 265 million customers gives Walmart Marketplace the potential to become a strong competitor. Below is a summary of Walmart’s latest expansions and developments to its e-commerce platform that are designed to attract more sellers and customers.

Walmart Expands Vision for Connecting Brands with Customers

In late January, Walmart announced an expanded vision and new name for its media business, now called Walmart Connect. Formerly known as Walmart Media Group, the new name is intended to reflect the company’s unique ability to accelerate the connection between brands and its 150 million weekly in-store customers. Walmart Connect is creating ways for partners to be top of mind in Walmart stores, on its digital properties, and across the internet in a way that is additive to customers’ experiences. The business will harness Walmart’s vast omnichannel presence, the power of its closed-loop system, and knowledge of its customer base to bring brands measurably closer to their intended audience no matter how they shop.

Walmart Announces New Self-Serve Display Platform

In early February, Walmart announced it was developing a new self-serve display platform to enable sellers to activate and manage their display campaigns with automation powered by the tech firm Thunder. According to Walmart, Thunder’s technology will be integrated with Walmart’s self-serve platform to help brands automate their creative. Expected to launch later this year, Walmart’s new display platform is expected to increase ad effectiveness over time with creative versioning, testing, and optimization – unlocking advertiser-specific insights for a higher return on ad spend.

Walmart Invests $14 Billion to Boost E-Commerce

In mid-February, Walmart announced plans to become “the primary destination for customers” – a possible reference to its e-commerce rival Amazon. In its fourth-quarter announcement, the retail giant stated it will spend $14 billion on enhancements to automation, supply chain, and other areas that might boost long-term sales. While details remain unclear, Walmart CEO Doug McMillon emphasized the company’s interest in prioritizing e-commerce, reporting a 69% growth in digital sales for Q4 and forecasting $100 billion in revenue from its online marketplace over the next few years.

Walmart Launches New Promotion for Marketplace Sellers

Just days following its Q4 statement, Walmart announced a program designed to attract new sellers to its online platform. The “New-Seller Savings” promotion promises 30 days of commission-free sales for new, eligible sellers. To qualify for the offer, sellers must meet the following criteria:

  • Must be a new seller
  • Must submit their application by March 31, 2021
  • Must finish onboarding and go live before May 1, 2021
  • Must meet all standard Walmart Marketplace requirements

The New-Seller Savings promotion also includes a virtual event that will help brands learn more about Walmart Marketplace. According to a press release, the promotion is designed to provide a growth opportunity for small and medium-size businesses who may be experiencing challenges during the pandemic.

Walmart Partners with BigCommerce to Grow its Online Marketplace

Most recently, Walmart announced a partnership with BigCommerce, a leading Open SaaS e-commerce platform for fast-growing and established brands. Eligible BigCommerce merchants will be able to sell products directly on Walmart Marketplace, giving them access to the 120 million customers who visit Walmart.com each month. BigCommerce merchants looking to sell through Walmart Marketplace will also receive an expedited application review to get up and running quickly. BigCommerce will automatically keep products synced with Walmart.com, making it easy for sellers to track products, orders, inventory, and fulfillment from one central location.

Key Distinctions Between Walmart Marketplace and Amazon

As you can see, Walmart is steadily ramping up its online marketplace to compete more aggressively with Amazon. From a seller’s perspective, the primary benefit of joining Walmart Marketplace is gaining access to its established network of locations and customers. In addition to 11,500 brick-and-mortar stores frequented by 265 million customers each year, more than 100 million people visit Walmart.com each month (according to their data). This is about half of Amazon’s monthly search traffic. To compensate for this disadvantage, Walmart emphasizes other key distinctions that may be attractive to sellers:

  • LESS COMPETITION With far less seller competition than Amazon, it can be much easier to stand out, gain brand exposure, build trust and authority, gain new leads, and convert sales on Walmart Marketplace.
  • NO INVENTORY LIMITATIONS Unlike Amazon FBA, there are no SKU minimums or maximums with WFS, so you can list your entire catalog of eligible items on Walmart Marketplace or manage limited inventory with a fixed threshold setting.
  • SIMPLE FEE STRUCTURE Walmart Marketplace provides a simpler fee structure than Amazon. The platform simply deducts a referral fee once a sale occurs (no setup, subscription, or monthly fees).
  • EFFICIENT RETURNS AND CUSTOMER SERVICE Nine out of ten Americans live within 15 minutes of a Walmart store, which makes returns and customer service easy by leveraging the retail giant’s existing capabilities in its brick-and-mortar network.

CHANNEL KEY TAKEAWAY

Walmart Marketplace has been around for more than a decade, but it is still in its early stages. From a seller’s point-of-view, this provides both advantages and disadvantages when comparing it to Amazon. With only around 60,000 current sellers, it’s much easier to generate traffic to your listings than a platform with 2.5+ million competitors. On the other hand, its marketing and advertising capabilities are quite limited. Amazon has a much larger collection of consumer shopping data that it has used with the help of advanced technology to develop an increasingly expansive arsenal of tools to help sellers target customers. Regardless, one thing is certain: Walmart is exploring every opportunity to establish itself as a convenient and valuable e-commerce platform for both sellers and customers. If the number and scope of developments announced in the first two months of 2021 are any indications, Walmart Marketplace will continue to expand rapidly and become an important force in e-commerce.

ABOUT CHANNEL KEY

Channel Key is a full-service channel management marketplace consulting agency that has helped generate close to $500M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn more about how Channel Key can help increase sales for your business, contact us today for a free consultation.


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