Walmart Beefs Up Online Marketplace

big commerce

Walmart has Amazon in its crosshairs. This has been the case for the last several years, accelerated by the 2016 acquisition of Jet.com and the escalation of Walmart Labs. The retailer continues to trail far behind Amazon’s online scale, but it’s making headway and has a deep-pocketed offline business to fund efforts.

The latest move came with Walmart’s deal with recently IPO’d eCommerce-SaaS platform BigCommerce. The latter’s merchants will get additional distribution on Walmart’s online marketplace. That includes access and exposure to 120 million monthly active users who shop on Walmart.com.

The way this will work is that BigCommerce merchants have the choice to opt in to Walmart.com distribution. If the additional scale isn’t incentive enough, BigCommerce merchants will get their standard e-commerce fees and revenue-share waived for the first month that they’re active on Walmart.com.

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Drivers & Dynamics

So what’s driving this deal? BigCommerce gains appeasment for its online merchants in that they now have greater distribution scale. That perk can work towards making the platform more attractive for new merchants and existing ones. The latter is hoped to boost key metrics like retention (ARR) and lifetime value (LTV).

Walmart meanwhile gets broader and deeper product libraries in its quest to become a more attractive online shopping destination. This is one of the aforementioned areas where it still trails Amazon. In terms of product availability, Amazon has likewise beefed up its catalogs in the past few years with 5 million third-party sellers.

In that light, this deal notably follows a partnership that Walmart formed with BigCommerce-competitor Shopify in June. As we examined at the time, it had similar drivers as those outlined above. Two months after the deal was formed, it already showed positive signs with 3x greater seller opt-ins than expected.

Panning back, Walmart may not have Amazon scale for eCommerce, but it’s starting to achieve Amazon-like logistical efficiencies and economies of scale. The former is where it could have an edge, given its network of physical stores that can be used as shipping hubs. Meanwhile, its e-Commerce sales grew 69 percent in Q4.

We’ll keep an eye on this e-commerce sleeping giant to see where it goes next and if it can continue gaining ground on Amazon.

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