Walmart is transforming its digital landscape.
The retail leader has announced that 2025 will mark its first year in the black with e-commerce earnings, a venture that began with significant initial investments and patience.
“We’ve exceeded our breakeven point,” shared CFO John David Rainey during the recent fourth-quarter earnings call. “From here, we only expect to grow.”
This positive trend largely stems from attracting affluent shoppers who are drawn to Walmart’s combination of budget-friendly prices and enhanced convenience.
“Most of our growth has come from households earning over $100,000,” stated CEO John Furner during the call.
The retailer noted that high-income consumers are responding positively to its versatile online and mobile offerings, from ordering groceries to selecting fashionable apparel.
For the fiscal year, Walmart’s total sales rose by 4.7% to reach $713.2 billion, with e-commerce surging nearly 25%, surpassing $150 billion.
While Walmart has made impressive strides, e-commerce titan Amazon claimed the title of the world’s largest company by revenue last year, generating $716.9 billion. Although Walmart’s stock dipped immediately following the earnings report, it rebounded during Thursday’s trading session.
However, Walmart’s advancements in e-commerce place it in a competitive position against Amazon, bolstered by its proximity to 95% of U.S. households.
“Our stores play a crucial role in delivering the experiences our customers desire,” said CEO John Furner. “With 5,200 locations available through Walmart and Sam’s, where inventory is strategically positioned, we’re well-equipped.”
Amazon is actively striving to counter Walmart’s significant advantage in physical locations, allowing quick delivery of essentials like groceries.
Walmart is expanding beyond groceries to fashion
Walmart’s reach extends beyond grocery delivery. Rainey pointed out that customers are utilizing savings from groceries to explore products from other categories.
“It’s not solely about convenience,” Rainey stated. “Fashion might not be considered a convenience category, but this indicates that our diverse product range appeals to a broader customer base.”
Fashion emerged as the primary contributor to sales growth in general merchandise, attracting high-income consumers who are likely to return.
“New customers are arriving at Walmart, often for the first time, and they’re enjoying experiences that encourage them to return to these platforms,” he explained.
GlobalData retail analyst Neil Saunders indicated that his firm’s research supports the trend of wealthy customers increasingly choosing Walmart for more than just groceries, thanks to its expanded product range and engaging in-store experiences.
Although the effects of Walmart’s recent AI collaborations are yet to fully materialize, Furner described initial results as promising for enhancing online and mobile sales. The company’s shopping assistant bot, Sparky, has reportedly resulted in 35% larger average transaction sizes.
“Approximately half of our app users have interacted with Sparky. When they do, it encourages them to create larger shopping carts,” noted David Guggina, CEO of the U.S. segment.
Even though Walmart still faces challenges in matching Amazon’s online sales, the past year has demonstrated its ability to establish a robust strategy heading into the future.
