Wednesday, July 24, 2024
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Walmart, the retail giant, has been making significant strides in its e-commerce business, with CEO Doug McMillon stating that e-commerce sales surpassed $100 billion globally last year. The company is now focusing on using artificial intelligence, advertising, and its extensive collection of stores to turn its e-commerce business profitable in the next year or two.

Walmart shares have been on a roll, rising 26% this year, roughly double that of the S&P 500’s gain. The company’s consistent performance has made it an attractive option for investors amid the volatility in the market. Walmart’s e-commerce sales have been growing, with a 22% jump in the last quarter, led by store-fulfilled pickup and delivery and its online marketplace.

The company is investing heavily in artificial intelligence and machine learning, with a focus on generative AI and personalized search. Walmart CTO Suresh Kumar stated that the company is in the best position to train models due to the vast amount of data it collects online and in-store. The company is also leveraging its legacy business, with around 90% of Americans living within 10 miles of one of its 4,700 stores.

Walmart’s extensive footprint allows it to offer speedy delivery directly from the stores, with options for express one-hour delivery for $10 and three-hour delivery for $5. The company has also expanded its Walmart+ membership, which includes benefits like free same-day grocery delivery from store and free shipping on general merchandise from Walmart.

The company’s biggest obstacle in e-commerce remains overall awareness, with CEO McMillon stating that it’s getting people to think of Walmart first instead of Amazon. However, Walmart is making progress in this area, with its US e-commerce sales growing and its advertising segment showing significant growth.

Walmart’s acquisition of connected TV maker Vizio for $2.3 billion is expected to accelerate growth for its ad business. The company’s CFO, John David Rainey, stated that advertising is a fast-growing high-margin part of their business, and the deal with Vizio is very complementary to what they’re doing organically.

While Walmart still lags behind Amazon in terms of e-commerce sales, it is better positioned than most competing brick-and-mortar retailers. The company’s focus on using data to optimize its supply chain operations and its extensive footprint are key advantages in the competitive e-commerce landscape.

In conclusion, Walmart is making significant strides in its e-commerce business, with a focus on using artificial intelligence, advertising, and its extensive collection of stores to turn its e-commerce business profitable. The company’s consistent performance and extensive footprint make it an attractive option for investors, and its focus on using data to optimize its operations and its advertising segment are key advantages in the competitive e-commerce landscape.

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