Walmart has revealed its achievements in digital business following the deployment of advanced technology solutions during the second-quarter of 2024.
Walmart said its global e-commerce business rose 22 percent. Digital engagement assisted Walmart to grow its gross margins 43 basis points, led by Walmart U.S. and international segments.
Walmart does not reveal specific investment in digital transformation. The ICT spending of Walmart was estimated at $9.5 billion in 2023. Suresh Kumar is the global chief technology officer (CTO) and chief development officer (CDO) of Walmart to deliver the best customer experiences.
Walmart says more than 230 million customers and members rely the platform every week. Walmart creates time-saving solutions that make life easier, from pickup and delivery to virtual try-on and digital solutions for health and wellness of customers. Walmart has been recognized as Wall Street Journal’s Top Companies for Innovation 2024.
Digital achievements
Walmart U.S. achieved 4.2 percent increase in sales growth driven primarily by strong traffic and growth across both stores and digital channels. E-commerce sales in Walmart U.S. rose 22 percent, and weekly active customers increased 20 percent.
The close proximity of retail stores to customers has unlocked new capabilities and enabled faster delivery times. Store fulfilled delivery rose 50 percent in Q2, with customers choosing and paying for delivery of their e-commerce orders in under one hour or under three hours.
Walmart’s international business sales grew 8.3 percent to $29.9 billion, reflecting strength in Walmex, China, and Flipkart. E-commerce sales in international markets rose 18 percent led by store-fulfilled pickup and delivery and marketplace.
Walmart International has achieved operating income of $1.4 billion (up 14.3 percent) as it benefited from operational efficiencies and lower losses in eCommerce across markets.
In Canada, e-commerce sales rose 27 percent. Walmart’s ecommerce growth in Canada was led by store fulfilled pickup and delivery.
Walmex has achieved ecommerce growth of 19 percent. Walmex opened 165 new stores in the past 12 months, including 25 new stores in the quarter.
In China, strong membership trends in Sam’s Club drove sales growth of 17.7 percent. About half of its sales or around $2.3 billion in China are from digital platforms. Its total sales in China were $4.6 billion in Q2.
Walmart offers convenience
Customers are responding to the increased convenience. In China, Walmart increased e-commerce orders delivered within one hour by 28 percent to 59 million orders. In India, Flipkart grocery grew over 50 percent, while providing next-day delivery in over 200 cities. In Canada, Delivery Pass members drove more than 40 percent of grocery delivery sales with order frequency significantly higher than that of non-members.
Sam’s Club U.S. sales ex fuel increased 5.2 percent, including e-commerce growth of 22 percent. Digital engagement remains strong with Scan & Go penetration surpassing 30 percent. 50 percent of members can exit without a check by using Just Go technology, which is now operational in 325 clubs, improving member NPS by more than 800 basis points compared to the clubs without this technology.
The Member’s Mark private brand drove excitement as sales and digital penetration increased.
Automation
Walmart is making investment in the automation work in its supply chain. Walmart is also leveraging generative AI to improve the customer, member and associate experience. Walmart is leveraging data and large language models from others and building its own.
Walmart U.S. has automated more than 45 percent of e-commerce fulfillment center volume. It has about 1,800 stores receiving some level of freight from 15 of regional distribution centers that are in varying stages of automation implementation. As a result, supply chain teams are processing more units through DCs and FCs.
Generative AI
Walmart has used generative AI to improve its product catalog. Walmart used multiple large language models to accurately create or improve over 850 million pieces of data in the catalog. Without the use of generative AI, this work would have required nearly 100 times the current head count to complete in the same amount of time. For associates picking online orders, showing them high-quality images of product packaging helps them quickly find what they’re looking for.
Customers and members are already enjoying AI-powered search on app and site. Looking ahead, the assistant will be able to respond with more specific follow-up questions like, how is the lighting in the room where you’ll place the TV?
Walmart aims at using generative AI for helping sellers on marketplace. Walmart is testing a new experience to select U.S.-based sellers that allows them to ask us anything. The new assistant will quickly summarize and provide the seller with answers without them having to sort through long articles or other materials.
As Walmart continues to evolve, its focus on digital transformation, AI integration, and supply chain automation positions the retail and ecommerce company for sustained growth in the rapidly changing retail business.
Baburajan Kizhakedath
