Walmart’s on a mission to increase ecommerce share by accelerating marketplace growth

Walmart is on a mission to increase its total share of ecommerce sales while upholding a frictionless customer experience, and it’s clear that the growth of Walmart Marketplace is a key initiative in obtaining this hefty goal.

Before we dig into how Walmart is going to accomplish this goal, we need to cover why Walmart is interested in increasing its digital share by means of growing its marketplace. Marketplace growth begins with increasing the number of sellers - but why the focus on sellers?

While Walmart has an expansive network of large physical stores, there is a limit to the amount of inventory one store can hold within its shelves, otherwise known as the 1P assortment. The digital marketplace can hold infinite inventory, but this requires a surplus of new sellers (including vendors with 1P agreements who want to list more of their catalog on the marketplace as a seller) to upload their products and increase the assortment.  

With more products available, there are more opportunities for consumers to make purchases of the items they need. If Walmart can capture these purchases that might have happened elsewhere, this is where growing share of digital sales can take off.  

Additionally, more sellers within a marketplace increases the density of the auctions for ads, which helps Walmart fuel another higher-margin business. Combine this with the lower operating costs of running a digital marketplace vs a physical store, and there’s a recipe here for profitability for both Walmart and the sellers.  

At its recent Seller Summit, Walmart announced multiple enhancements to its marketplace, demonstrating its strategy to increase its desirability as a marketplace for shoppers and sellers. Read on to learn about how we see marketplace growth potential via these initiatives.

Increasing assortment

One of the first steps to growing a marketplace and making it attractive to both sellers and consumers is increasing assortment - but it’s not just about having everything available all the time. There are categories that shoppers demand, and it’s clear that Walmart Marketplace is working on its increased assortment strategy with demand in mind.

Premium beauty is an increasingly growing category that has seen massive success across  online retailers, and is the fastest growing digital category amongst Walmart’s total Beauty assortment. To build on this momentum, the company launched Premium Beauty on Walmart Marketplace. In addition to creating elevated, seamless brand experiences, the program allows beauty brand owners and approved sellers to be the sole sellers on Walmart Marketplace.

Marketplace also launched Resold at Walmart, a digital destination for pre-owned and refurbished products across multiple categories and conditions. The initial assortment includes more than 5 million items across luxury fashion, electronics, collectibles, sporting goods and more. This program also builds on the success of Walmart Refurbished electronics and small appliances, and it looks like Marketplace is on a mission to further expand the assortment of resold products while attracting a sustainably-minded or price-savvy shopper.

In addition, the company launched their official collectibles experience more than a year ago with largely Walmart merchandise. Now, they’re doubling down on expanding seller assortment in their Collector shop, where sellers can enable preorders for drops and releases exclusive to Walmart.

This expansion allows Marketplace to further grow their assortment of items that are incredibly unique to their broader catalog.

Increasing assortment is the first step, but attracting sellers in such a competitive marketplace landscape requires more than just the ability to list products. This is where leveraging Walmart’s supply chain and enhancing fulfillment capabilities come in—further solidifying Walmart’s goal of being the top marketplace for global sellers.

Seamless fulfillment at scale

Consumers expect the items purchased on a marketplace to arrive quickly, and Walmart has invested significantly into building a robust fulfillment network with suppliers, sellers and customers in mind. Most sellers are active across multiple marketplaces, which means that fulfillment can be complex. In order to compete in fulfillment and increase revenue in this area of the Marketplace business, the company has announced multiple enhancements for Walmart Fulfillment Services (WFS).

Multichannel and cross-border fulfillment are key unlocks for attracting more global sellers to Walmart Marketplace. With Walmart Multichannel Solutions, sellers can utilize WFS to fulfill orders on any ecommerce site. This is huge for sellers who are looking to expand to multiple US marketplaces with streamlined fulfillment - and this is especially pertinent to the growth and desirability of TikTok Shop for sellers.

With Walmart Cross Border, WFS can now handle transportation of inbound goods from ports of origin in Asia directly to its fulfillment centers across the U.S.  This simplifies another complicated element of conducting commerce on a marketplace for a global seller.  

Utilizing WFS has become table stakes for sellers looking to provide the best experience for customers while also gaining a boost in the search algorithm, and between multichannel and cross-border fulfillment, Walmart is poised to become a dominant player in the fulfillment space. Flywheel has taken the initiative in this regard as well, creating a tool that helps sellers seamlessly convert items to be WFS-eligible within our own proprietary tech - stay tuned for more on this.

Curated experiences for all shoppers

Lastly, a marketplace needs consumers to fuel its traction and adoption. Walmart has innovated across social commerce, AI, and digitally-driven experiences with consumers of all ages in mind.

For the younger generation, the introduction to Walmart as a place to shop is likely via a digital touchpoint, which is why Walmart has built its Creator Community to drive awareness and consideration as well as its Walmart Realm and various augmented reality experiences.

Continued advancements in advertising capabilities for Marketplace sellers are helping to drive offsite traffic back to Walmart as well. One offsite ad for a relevant product can be all a shopper needs to discover the value of Walmart as a digital marketplace that encompasses all of their product needs.

Of course, to be mentioned is Walmart’s continued investment in its AI search capabilities - showcasing an acknowledgment of the need to help shoppers find and discover products quickly and efficiently, removing the guessing game element of scrolling through pages of products on an ecommerce site. There is still significant work to be done here, but it’s clear that Walmart’s mission is to be a great place to shop for consumers and a worthwhile place to sell for sellers.

Increasing share of sales in the digital landscape is no easy feat and requires stealing share from other dominant players. Walmart’s marketplace growth initiatives show no signs of slowing down,  which is a win for sellers, consumers, and even vendors who begin the journey of exploring how a marketplace portfolio can increase overall profitability through increased assortment, fulfillment capabilities, and seamless shopping experiences.

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