Walmart expects ‘connected customer’ to lead 40% e-commerce growth by 2019
BENTONVILLE, Ark. — Walmart is counting on the “connected customer” and strong e-commerce growth as its two competitive weapons in the ongoing digital retailing war.
Walmart has augmented its fiscal year 2019 guidance with an expectation that e-commerce sales growth in the United States will increase by a staggering 40% by 2019. Walmart also predicted that consolidated net sales will grow at or above 3%, driven by comp-sales and e-commerce growth.
“We’re combining the accessibility of our stores with e-commerce to provide new and exciting ways for customers to shop,” Walmart president and CEO Doug McMillon said. “I’m proud of the team we have in place, the work we have underway and how we are positioned for success in the future.”
With the acquisition of Jet.com in September 2016, the company has stepped up its e-commerce game by expanding its online assortment, adding two-day free shipping with no membership fee, and operating over 1,000 online grocery pickup locations. These efforts have contributed to both traffic and comp sales improvements, as well strong e-commerce growth over the past year.
McMillon also used the event to highlight Walmart’s global innovations, such as one-hour delivery from stores in China, commitments to sustainability, service to communities, especially in times of disaster.
The company has also successfully invested in associates and empowering them to drive results and better serve customers. Specifically, the company is equipping associates “with training and technology so they will continue to innovate in our stores, clubs and through e-commerce to find ways to deliver an enjoyable shopping experience that is easy, fast, friendly and fun,” McMillon added.
Digital experiences remain front and center going forward. For example, the company’s guidance for 2019 includes a plan to add 1,000 online grocery locations across its U.S. operation. It also expects to leverage expenses, and that its effective tax rate will be approximately 32.5%.
The discounter expects capital expenditures to be approximately $11 billion for fiscal years 2018 and 2019. Walmart plans to use capital for store remodels and digital experiences over investing in new stores. Among its planned e-commerce investments are enhanced supply chain capabilities.
Overall, the company expects global unit growth of approximately 280 locations, including new, expanded and relocated units, for each of the fiscal years 2018 and 2019. Specifically, Walmart U.S. expects to open fewer than 15 Supercenters and fewer than 10 Neighborhood Markets in fiscal year 2019.
Walmart International expects to open approximately 255 new stores with a focus in key markets, such as Mexico and China. In addition, Walmart International will invest in fulfillment capabilities, according to the company.
Walmart operates more than 11,600 stores under 59 banners in 28 countries and e-commerce websites in 11 countries.