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Walmart to Strengthen E-Commerce to Compete with Amazon

Walmart is working to serve its customers in new ways: the retailer wants to win with its e-commerce offering in hopes of competing with the so-far-unbeatable Amazon.

The discount retailer’s e-commerce sales might have grown 17 percent in the first quarter, but the total still comes in less than one-sixth that of Amazon’s online sales. As the New York Times put it, “Walmart has been repeatedly outgunned and outsmarted by Amazon’s price-matching, robot-utilizing, competition-crushing machine.”

At Walmart’s annual shareholders meeting Friday, president and CEO Doug McMillon discussed the shopper’s evolving needs and the ways Walmart intends to accommodate.

“One customer can shop with us in so many different ways – in stores, on their phones, at homes, a pick-up point,” McMillon said. “I want us to stop talking about digital and physical retail as if they’re two separate things. The customer doesn’t think of it that way, and we can’t either. Customers just want us to solve their everyday problems with an easy, seamless shopping experience.”

And one way Walmart is working to create that simple shopping experience—and one of the ways it’s trying to catch up with the king of e-commerce—is by offering up its own shipping service.

Last month, Walmart said it would test a Prime-like service, called Shipping Pass, which offers customers unlimited free three-day shipping for $50 a year, undercutting Amazon’s service by nearly half on cost but adding a day to delivery time.

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The retailer is also testing its Pickup-Grocery, a same-day pick-up concept that lets shoppers place grocery orders online, then pull in to a drive-up digital kiosk and collect the goods.

According to the New York Times, analysts have said Walmart isn’t likely to make money on a cut-rate offer like Shipping Pass, and that the retailer’s stop-and-go e-tail efforts have left it so far behind continuously progressing Amazon that it may not catch up for another decade, if ever.

But Walmart doesn’t seem a bit concerned. McMillon acknowledged the company’s competition but said “they don’t have what we do,” calling out its associates, locations and supply chain and logistics teams as the competitive advantages that promise to give the company “something special.”

McMillon added, “We’re approaching this work with both urgency and determination. We’re moving fast to exceed our customers’ expectations, while making purposeful choices that will position us for the long haul. This is a turning point in our story, and the investments we’re making today will set the stage for strong and sustainable growth.”