Walmart to sell its e-commerce technology to small retailers – .

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Walmart to sell its e-commerce technology to small retailers – .


Just as Amazon Web Services is the profit center that powers most of Amazon’s other business, Walmart CEO Doug McMillon is increasingly interested in expanding his company’s profit pools beyond of its main retail activity.
Starting Wednesday, small and medium-sized retailers can purchase technology developed by Walmart to allow shoppers to purchase items online and pick up in-store purchases. These businesses will also be able to add products to Walmart’s online marketplace with just a few clicks. To offer the suite of cloud-based services, Walmart has partnered with Adobe, which will sell the software through a subscription.

“When we started the journey, Covid had just hit,” said Anshu Bhardwaj, vice president of technology strategy and marketing at Walmart Global Technology. “We reaped the benefits of this omnichannel adventure very early on. “

Walmart saw its sales skyrocket both online and in-store as the pandemic took hold. While some other retailers have been forced to close stores to help contain the spread of Covid-19, Walmart has been seen as a critical retailer and has remained open. Some customers, seeking to limit the time they spend inside stores, have taken advantage of Walmart’s online shopping and in-store pickup options. These developments have accelerated the growth of the company’s e-commerce. The retailer’s online sales jumped 79% in the fiscal year ended Jan. 29, with pickup and delivery sales up triple digits from a year earlier.

Only 7% of US retailers had activated the option “buy online in store” in January 2018. The pandemic accelerated this rate to 22% of retailers last month, according to the Adobe Digital Economy index.

An important opportunity remains. As of December, Adobe and market research IDC estimated the total addressable market for content and commerce-as-a-service software to be approximately $ 44 billion.

For those wondering why Walmart would want to help potential rivals succeed, Bhardwaj said these small businesses would be served regardless.

“Digitization is happening everywhere as the consumer evolves,” said Bhardwaj. “There is no other choice but to evolve with them. ”

Walmart’s size and scale, and its proximity to 90% of the U.S. population within 10 miles of any of its stores, gives it a substantial advantage. In addition, Bhardwaj said, “We really want to better serve our communities, our shareholders, our stakeholders and the community”.

She noted that about a year and a half ago, McMillon changed the language in a slide he uses in presentations from “serving our shareholders” to “serving our stakeholders”. Bhardwaj said it was a meeting with McMillon that spurred his idea to sell the technology Walmart built to other retailers.

Bhardwaj has been involved in other key Walmart tech initiatives. She notably led the successful Scan & Go technology at Sam’s Club, which allows customers to call their purchases with a smartphone when they add items to their shopping cart.

The new software company opens up a potential revenue stream for Walmart and fits in with its strategy of building new businesses that serve new customers and allow profits to flow back into the business to fund new innovations.

Neither Walmart nor Adobe publicly share their expectations of how big of a business opportunity this could be, but Bhardwaj said, “I’m betting my life on that,” as his current role at the retailer was created for make his idea a reality.

For Adobe, the Walmart partnership increases its visibility.

“We can now offer a more holistic solution, a top-notch omnichannel experience,” said Peter Sheldon, senior director of business strategy at Adobe, in an interview. “From Adobe, [these businesses] will benefit from Walmart’s best e-commerce and omnichannel experiences. “

Small and mid-size retailers will use Adobe to power e-commerce sites, including the shopping cart feature, search, navigation, and product recommendation capabilities. (Walmart does not use Adobe’s commercial software for these functions for its own website. It has its own technology.)

Small and medium-sized businesses, as well as retailers with annual revenue of at least $ 1 billion, are already using a variety of Adobe’s e-commerce products, including Rite Aid, Verizon, Unilever, Coca-Cola. , HP, Honeywell, Trader Joe’s and more.

Walmart provides the technology that powers employee preparation and packaging for online purchases and the geolocation technology that employees need to know when customers are arriving to pick up orders.

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