Walmart has announced its successes in digital business following the launch of advanced technology solutions in the second quarter of 2024.
Walmart said its global e-commerce business grew 22 percent. Thanks to its digital commitment, Walmart was able to increase its gross margins by 43 basis points, primarily in the U.S. and international segments.
Walmart does not disclose specific investments in digital transformation. Walmart’s ICT spending was estimated at $9.5 billion in 2023. Suresh Kumar is Walmart’s global Chief Technology Officer (CTO) and Chief Development Officer (CDO), who ensures the best customer experiences.
Walmart says more than 230 million customers and members trust the platform every week. Walmart creates time-saving solutions that make life easier, from pickup and delivery to virtual try-on and digital solutions for customer health and well-being. Walmart was named one of the Wall Street Journal’s Top Companies for Innovation 2024.
Digital achievements
Walmart US achieved sales growth of 4.2 percent, driven primarily by strong customer traffic and growth in stores and digital channels. Walmart US e-commerce sales increased 22 percent and weekly active customers increased 20 percent.
The proximity of retail stores to customers has opened up new opportunities and enabled faster delivery times. The number of deliveries through stores increased by 50 percent in the second quarter, with customers choosing and paying for delivery of their e-commerce orders in under one hour and under three hours.
Walmart’s international sales rose 8.3 percent to $29.9 billion, reflecting strength from Walmex, China and Flipkart. E-commerce sales in international markets rose 18 percent, led by store pickup and delivery and the marketplace.
Walmart International reported operating profit of $1.4 billion, up 14.3 percent, as the company benefited from operational efficiencies and lower e-commerce losses across all markets.
In Canada, e-commerce sales increased 27 percent. Walmart’s e-commerce growth in Canada was driven by in-store pickup and delivery.
Walmex has achieved e-commerce growth of 19 percent. Walmex has opened 165 new stores in the last 12 months, including 25 new stores in the quarter.
In China, strong membership growth at Sam’s Club led to sales growth of 17.7 percent. About half of sales, or around $2.3 billion, came from digital platforms. Total sales in China in the second quarter were $4.6 billion.
Walmart offers convenience
Customers are responding to the improved convenience. In China, Walmart increased the number of e-commerce orders delivered within an hour by 28 percent to 59 million orders. In India, Flipkart’s grocery business grew by over 50 percent, offering next-day delivery in over 200 cities. In Canada, Delivery Pass members accounted for more than 40 percent of grocery delivery sales, with order frequency significantly higher than non-members.
Sam’s Club U.S. sales (excluding fuel) increased 5.2 percent, including e-commerce growth of 22 percent. Digital engagement remains strong, with Scan & Go penetration above 30 percent. 50 percent of members can exit without inspection using Just Go technology, now in use in 325 clubs, improving member NPS by more than 800 basis points compared to clubs without the technology.
The private label Member’s Mark caused a stir as sales and digital penetration increased.
automation
Walmart is investing in automating its supply chain. Walmart is also using generative AI to improve the experience of customers, members and employees. Walmart is leveraging data and large language models from others and building its own.
Walmart US has automated more than 45 percent of its e-commerce fulfillment center volume. The company has approximately 1,800 stores that receive freight from 15 regional distribution centers that are in varying stages of automation implementation. As a result, supply chain teams are processing more units through DCs and FCs.
Generative AI
Walmart has used generative AI to improve its product catalog. Walmart used several large language models to accurately create or improve over 850 million records in the catalog. Without the use of generative AI, this work would have required nearly 100 times the current number of employees in the same amount of time. For employees picking online orders, seeing high-quality images of product packaging helps them quickly find what they are looking for.
Customers and members already benefit from AI-powered search in the app and on the website. In the future, the assistant will be able to respond with more specific follow-up questions, such as: “What is the lighting like in the room where you put the TV?”
Walmart wants to use generative AI to help sellers on the marketplace. Walmart is testing a new feature for select sellers in the US that will allow them to ask us anything. The new assistant quickly summarizes questions and provides answers to the seller without the need to sift through lengthy articles or other materials.
As Walmart evolves, its focus on digital transformation, AI integration and supply chain automation positions the retail and e-commerce company for sustainable growth in the rapidly changing retail business.
Baburajan Kizhakedath
