Walmart (WMT, Financial) announced Thursday that it will be restructuring its e-commerce platform in an effort to improve its ability to compete with the major online retailers. This is a trend that we are seeing from most major retailers as they continue to adapt to consumers' growing preference for online shopping and e-commerce in general.
Walmart has made some significant changes in order to reposition itself as a stronger player in the online space. Most notably, it has promoted the founder of Jet.com, Mark Lore, to CEO of the e-commerce division in Walmart.
Jet.com was an online retailer that was acquired by Walmart last year. Walmart bought out the company because of its success in the online marketplace. It hopes the addition of the company, along with the people who helped bring the site so much success, can translate to a greater degree of success for Walmart and its online initiative.
Lore will spend his time at this new position implementing and redesigning a new approach that Walmart will take in its online sales. The changes that will be made will be aimed to help Walmart compete against the e-commerce champion, Amazon.com (AMZN, Financial).
In the past, Walmart has been able to see success by specializing in products that Amazon did not target, such as groceries and apparel. Recently, Amazon has been making a strong push toward entering and dominating those markets as well. Walmart and other corporations now see that in order to continue to be a presence in the online space, they will have to be more proactive than they have been before.
Walmart is not the only one of the big retailers to take an initiative like this. Companies like Kohl’s (KSS, Financial), Sears (SHLD, Financial) and Macy’s (M, Financial) have all been working toward similar goals.
So far, the retail giants have been struggling to gain any ground on Amazon in the online space. Although things are not looking promising so far, these retailers are responding by making an even stronger play against other online competitors.
Walmart’s acquisition of Jet.com in December was one of the most successful moves the big retailers have made in their efforts to compete against Amazon. Walmart is using Jet.com to face off against Zappos.com, the site that Amazon uses specifically to sell footwear.
Walmart is also showing other steps it is taking to improve the sales it has been generating online. It also recently launched its own mobile payment platform known as Walmart Pay. This application will allow shoppers to use their smartphones to make payments online and in store.
The hope is that creating an easy-to-use payment system will increase the e-commerce conversion rate that has been seen so far.
As far as the future outlook of online retail sales goes, there is no question that Amazon will continue to dominate that space. The only question is whether Walmart and other retail giants will be able to catch up to them.
Disclosure: I do not own any shares of any stocks mentioned in this article.
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