Amazon and sellers "break up", Walmart takes advantage of the situation

It was a hot summer in Las Vegas , with the temperature reaching nearly 110 degrees Fahrenheit, but every seller attending the conference was thinking about the Christmas shopping season .

At Walmart's seller meetings, staffers dressed as Santa Claus were milling about, and Walmart's leadership gave third-party sellers an early gift: waiving additional peak-season storage fees.

Walmart's holiday season "big test"

Afterward, Walmart CEO Doug McMillon took the stage and told the 1,500-plus attendees: “We want you to grow with Walmart.” It was reminiscent of the story of the company’s founder, Sam Walton, who was once just a small-town entrepreneur.

As Walmart enters the retail industry's most important sales season, the retail giant is looking for ways to recruit and retain more third-party sellers.

In addition, Walmart is trying to persuade these sellers to pay the platform to take charge of matters such as packaging and transportation.

It can be said that this year's holiday season will be a big test for Walmart's e-commerce strategy.

Walmart's promotional activities some time ago kicked off this year's sales season, and more than half of the products came from Walmart's third-party sellers.

There are signs that Walmart's growing third-party marketplace could help the company overcome a slowdown in U.S. consumption.

Walmart's online sales in the U.S. have surged in the past two quarters, even as other big retailers like Macy's and Target have seen sales decline.

As more shoppers avoid buying non-essential items offline, sales in some discretionary categories on Walmart’s third-party marketplace grew by double digits in the most recent quarter.

Walmart's app and website have a new look, and its distribution centers and stores have automation equipment, said Tom Ward, Walmart's chief e-commerce officer in the United States.

In fact, Walmart can be considered a "loser" in e-commerce. Its online sales are only a small fraction of Amazon's.

Amazon currently has more than 1 million active sellers, while Walmart has about 100,000, according to Marketplace Pulse, a third-party company that collects data on e-commerce platforms such as Amazon, eBay and Etsy.

However, Amazon and Walmart do not officially disclose how many active sellers they have.

For Walmart, closing that huge gap is an uphill climb, but also an opportunity, said Watson, CEO of e-commerce consulting firm RMW Commerce Consulting.

“Amazon has never been the best place for sellers to do business,” he said. “I’ve seen a phenomenon recently where a lot of sellers are actually cheering for Walmart because they want another option. ”

Tensions between Amazon and some sellers are at the heart of an antitrust lawsuit filed by the Federal Trade Commission against Amazon in late September. The lawsuit accuses the e-commerce giant of monopolistic practices, such as punishing sellers for offering cheaper prices on other sites and forcing them to use its delivery service.

Amazon denied the allegations in a blog post, saying the company was helping rather than hurting sellers and that its platform contributes to lower prices and better service.

Watson said it's actually very difficult to find a customer service number on Amazon. On the other hand, at Walmart, sellers often get the "red carpet treatment."

But first, Walmart needs to convince successful sellers who are already on Amazon, such as companies like Lucky 21, to join its platform.

The apparel retailer, which represents brands including Disney, New Balance and Reebok, tested some items on Walmart’s platform about a year and a half ago.

Melissa Laconata, vice president and business unit manager at Lucky 21, said the company knows Walmart is far behind Amazon in e-commerce.

However, she said she had heard about Walmart's investment in e-commerce platforms and understood that Walmart already had a large physical customer base and considerable online traffic.

“It’s like being in the second best shopping mall in the world, why not give it a try?” she said.

Last year, Lucky 21 became the largest third-party seller of children's clothing on Walmart.com.

It is reported that Walmart has taken a series of measures to catch up with Amazon, such as simplifying the onboarding process to make it easier for new sellers to join; and launched the membership program Walmart + to drive higher online sales.

Three years ago, the company launched Walmart Fulfillment Services, which allows sellers to pay the platform multiple fees for services including warehousing, packaging and shipping.

This summer, Walmart announced another wave of features to better compete with Amazon, starting with delivery services for sellers’ larger items and multi-package goods, like canoes or patio sets.

Walmart, on the other hand, is looking at its more than 4,600 stores in the United States as an advantage over Amazon.

These stores are like mini-warehouses for Walmart, and in the second quarter of this year, more than 50% of online orders were delivered through their offline stores.

And about 90% of Americans live within 10 miles of a Walmart store, allowing Walmart to sometimes deliver packages to customers' doorsteps faster than Amazon.

As inflation continues to weigh on Americans’ budgets, Walmart’s e-commerce platform could help the retail giant solve one of its long-standing problems: persuading shoppers to buy more high-margin items like sweaters, wallets or boxes of cereal and bread.

“Overtaking Amazon”

According to statistics from third-party agency Apptopia, Walmart's shopping app has surpassed Amazon in daily usage.

Walmart will also test some high-end brands on its website that Americans might not expect to find on Walmart's website, such as Michael Kors, Dyson and Solo Stove.

It is understood that the Solo Stove products start at about $100 on Walmart's website , but a set that includes a fire pit, stove cover and portable camping accessories can cost up to $1,155.

Solo Stove CEO John Merris said Solo Stove has already made a presence on Amazon, but he is a little skeptical that Walmart can attract customers who are willing to spend on expensive, non-essential items.

But John Mellis, whose company began selling smokeless fire pits on Walmart's website early last year, said his views have changed.

Its sales got a boost during Walmart's promotional event in July. Compared with the same period last year, Solo Stove sales on the Walmart platform increased 300%.

If Walmart uses its stores to speed up delivery and add more brands at price points that customers like, it could become a big threat to a platform like Amazon, Meris said.

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E-commerce