LAS VEGAS — Walmart is looking for new ways to woo sellers to its third-party marketplace, as it pushes to drive more online sales and close a wide gap with rival Amazon.
On Wednesday, the big-box retailer kicked off its inaugural Walmart Marketplace Seller Summit, a two-day invitation-only event of how-to sessions drawing more than 1,500 people from businesses that sell clothing, party supplies, jewelry and more on Walmart’s website. Walmart CEO Doug McMillon will headline the event. The marketplace will be expanded to Chile early next year. This is the first time that it has been outside of North America. It also adds an option for sellers who want to pay Walmart directly to fulfill orders online. This is especially useful for larger and bulkier products, like canoes or patio sets that are packaged in multiple boxes. It’s also making it possible for sellers with a store to use Walmart’s technology to power curbside pickup or the company’s network of delivery drivers to drop online purchases at customers’ doorsteps.
Walmart is ramping up its focus on its third-party marketplace, as the company chases higher-margin e-commerce sales and pledges to grow its profits at a faster rate than revenue over the next five years. Walmart automates more stores and warehouses to achieve this goal. It has also gotten into businesses outside of retail that are more lucrative, such as selling advertising, last-mile delivery and fulfillment services.
In a blog post Wednesday announcing the marketplace changes, Manish Joneja, senior vice president of Walmart Marketplace and Walmart Fulfillment Services, described the business as an “endless aisle where sellers of all sizes can offer customers the items they need and love. “
He stated that customers have a greater selection to choose from, regardless of whether the merchandise is sold by Walmart or third-party sellers. He added that both Walmart and the seller grow their businesses at the same rate. Sellers share a portion of their marketplace profits with Walmart.
Joneja is one of the Amazon veterans Walmart has poached to grow its marketplace business. He also previously worked for marketplace eBay
. Walmart also hired another Amazon veteran, Jare’ Buckley-Cox, as vice president of Walmart Fulfillment Services.
Sellers that participate in the marketplace are also potential customers for Walmart’s newer businesses since they can hire Walmart to pack and ship orders or to advertise their products. The number of sellers using Walmart Fulfillment Services grew more than 50% in the most recent fiscal quarter, Chief Financial Officer John David Rainey said on an earnings call earlier this month.Walmart is the nation’s largest retailer, but it lags far behind Amazon in online market share and e-commerce sales. According to Insider Intelligence, Walmart’s online sales last year were less than a fifth of Amazon’s. Walmart is a distant second in market share to Amazon, which captured nearly 38% of e-commerce sales in the U.S. last year compared with Walmart’s roughly 7%, according to the market researcher’s estimates.Zoom In Icon
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Walmart’s marketplace is also much smaller than Amazon’s, despite launching in 2009. Walmart has not disclosed how many vendors are part of its marketplace, but it sells to customers in the U.S., Canada and Mexico.
Best Buy and Macy’s have posted declines. In an earnings call held earlier this month by Rainey, he said that the number of people buying products on Walmart’s Marketplace increased by 14% during the second fiscal quarter. Rainey said that general merchandise was selling well on the platform, and there were double-digit increases in the apparel and home categories during the period.