Walmart Health wasn’t working, Walmart.com is
Walmart keeps trying new things: many don’t work, but the company’s e-commerce efforts are booming
Likes: trying new things
Giant corporations with 2 million+ employees aren’t known for their willingness to try new things, but Walmart has been doing its best impression of a smaller, more nimble company this week, announcing both a new private-label food brand and a virtual shopping experience with immersive gaming platform Roblox.
Dislikes: losing money
On the other hand, news also broke yesterday that Walmart will be shutting down its 51 health care clinics and telehealth services, citing “escalating operating costs” and a "lack of profitability” at the 5-year-old initiative.
This demonstrable willingness to cut ties with projects that aren’t working, and divert resources to areas that are, has been rewarded by investors: WMT shares are flirting with an all-time high, as its e-commerce business in particular continues to fly.
Despite launching Walmart.com in 2000, it took 16 years and the acquisition of Jet.com for the retailer to get serious about selling online. Since then, it’s doubled down aggressively, with multiple acquisitions and website redesigns — edging ever closer to Amazon and other behemoths in the digital aisles.
Indeed, Walmart's online sales over the last 5 years track on a broadly comparable trajectory to Amazon's from 2007 to 2012, growing to more than $19 billion in the latest quarter. Walmart's core US grocery division grew at a steady 7% last year, while its e-commerce segment managed 22% year-on-year growth. A successful partnership with Roblox, in which players will be able to buy real-life items from within a digital replica of a Walmart store, could keep the growth train running.
Although Walmart's growth is certainly less groundbreaking than Amazon’s — online shopping isn’t exactly exciting tech anymore — it’s given the retailer a new lease of life and opened the doors to an even more lucrative source of revenue: advertising.
