Dive Brief:
- In Walmart.com's ongoing effort to supplant Amazon, the king of big box stores significantly increased the number of non-American produced goods offered on its e-commerce website, Reuters reported last week.
- Since February, Walmart has invited sellers from China, the U.K., and Canada to join its online platform. However, the move defies a 2013 pledge to support American-made products and jobs. Previously, the retailer only allowed U.S.-based vendors on Walmart.com.
- Walmart alleges the decision is based on buyer demand; that without adding foreign made items to its inventory, customers become dissatisfied by the limited offering. And when polled, U.S. shoppers declined to commit to paying higher "American-made" prices.
Dive Insight:
Walmart has been aggressively pushing its e-commerce sales, and it's beginning to pay off. Reuters reports the company's e-commerce sales grew 63% in the first quarter of 2017 and is unlikely to let down. The growth reflects a successful digital strategy, as Walmart has addressed each link in the supply chain in its effort to become a leader in online commerce.
After all, maintaining an online presence requires a shift in the company's traditional inventory management strategies. Unlike brick-and-mortar sales, which rely on bulk availability to keep shelves stocked, the endless aisle requires a wide diversity of related products. The warehouse becomes the retailers' back-room, and a healthy cast of suppliers is pivotal.
The company's focus on the distribution center is evident from recent news. Walmart recently cracked down on supplier deliveries in order to improve fulfillment timelines. The company also increased its stake on a forklift provider to ensure the latest warehouse technology. Even its "Policy Roadmap to Renew U.S. Manufacturing" would help its own warehouse interests, given its focus on training new talent and developing a wider consumer-packaged goods manufacturing base in the U.S.
The reality is that Walmart faces two competing priorities, both in boosting U.S. jobs and providing shoppers what they seek, even if it's not all U.S.-made. Arguably, creating a competitive online network will require continued investments in logistics, which support U.S. jobs. In the meantime, until American manufacturing can provide the stock requirements for an online marketplace, it's unlikely Walmart will limit its sourcing base to the U.S.
