The investments Wal-Mart has made in e-commerce appear to be paying off.
Online sales were up 63% in the first quarter, according to the company’s recent earnings report.
Marc Lore, president and CEO of the e-commerce business for Wal-Mart U.S., said the majority of the growth is organic, not driven by recent acquisitions.
“The primary driver of this organic growth can be attributed to two-day free shipping and also re-order, which allows customers to seamlessly re-order their everyday essentials,” Lore said in a call with media. “Customers are placing more orders and are beginning to spend more. As we are becoming the customer’s go-to destination for everyday needs, we also are beginning to increase our assortment in the long (term).
“Walmart.com now has more than 50 million (stock-keeping units), a five-fold increase versus the 10 million SKUs from the same time last year,” Lore said.
The company introduced two-day shipping to compete with Amazon Prime, which costs $11 per month, and Lore suggested the effort has been rewarded.
“The idea of that two-day shipping on over a million items without having to pay a membership fee is really resonating with customers,” Lore said.
Lore also noted the pickup discount the company is giving customers for picking up non-store items, ordered online, at stores.
“While it’s still early, we’re seeing nice growth in pickup orders,” Lore said on the call. “It’s a real competitive advantage for us to leverage our transportation network and our stores to significantly lower our shipping cost and pass those savings on to our customers.”
Wal-Mart U.S. comparable store sales were up 1.4% in the first quarter, and total revenue increased by the same degree, to $117.5 billion.