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Is Walmart Canada positioned to lead e-commerce?


Walmart recently hosted its 19th Annual Investor Conference, updating analysts about its go-forward strategies.  I found its global e-commerce presentation particularly fascinating. Seeing their direction made me curious:  Is Walmart Canada positioned to lead e-commerce?

For context, Canada’s e-commerce penetration lags other markets. Walmart Canada recently cited that e-commerce represented only about 2 per cent of all retail sales in Canada last year, versus about 7 per cent in the U.S.

At the same time, the retailer sees opportunity as it anticipates Canadian e-commerce will double through 2017.  Moreover, management views that no “real winner” has yet emerged in Canada.

I agree, particularly regarding Walmart Canada’s within-channel competition.

After an initial flop, Canadian Tire retried its online entry last year by selling tires.

We’re still waiting for other categories to follow.

Similarly, Loblaw is just planning to develop online selling through Joe Fresh.

Also, when Target Canada opens in 2013, it’s not expected to launch an e-commerce capability at the outset either.

Looking at online-only retailers, there’s also a gap.

In other markets, Amazon is known as a dominant player.  For instance, Kantar Retail’s ShopperScape survey found that nearly half (46 per cent) of all U.S. respondents said they had shopped at Amazon in the past four weeks.

Comparatively, a joint Kantar Retail and TNS Canada survey, also conducted in August 2012, found that only 7 per cent of Canadian respondents reported shopping at Amazon for general merchandise or apparel in the past three months.

To be clear, it’s not that no one is shopping online in Canada.

Two years ago Statistics Canada reported that more than half (51 per cent) of internet users shopped online, though it also reported that 60 per cent of these shoppers reported purchasing on U.S. sites.  This suggests that demand is underserved locally.

Enter Walmart.

Chief executive Mike Duke asserted at their investor conference that Walmart is “playing to win in a very real way now.” Broadly speaking, leadership is focused on expanding assortment, developing fulfillment, and enhancing the customer experience.

These efforts are backed by its @WalmartLabs innovation unit, which has already developed a variety of resources since its launch in 2011.

This includes a real-time social media analytics tool and an in-house search engine called Polaris.  In short, this is a retailer with expertise and resources.

It is well-poised to be an online behemoth: Suppliers and competitors–stay tuned for yet another “disruptor” to the Canadian marketplace.

To discuss further, email me at: [email protected]

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