Retail Channels
20 January 2023
Walmart launches ecommerce site for SMBs, with membership
Walmart Business underscores the retailer's recent B2B expansion.
Walmart Business is built for restocking. (Courtesy photo)
Walmart Business underscores the retailer's recent B2B expansion.
Walmart Business is built for restocking. (Courtesy photo)
Walmart has a new ecommerce tool for businesses and organizations that buy supplies from the retailer.
The news: Walmart is launching a new ecommerce site and customer experience designed for small and medium-sized businesses, as well as nonprofits. Called Walmart Business, it helps smaller outfits tap Walmart’s ecommerce network, including fulfillment and delivery, to save money and keep supplies stocked.
What’s available on the platform? Walmart Business has an assortment of 10,000 items. These include products for:
What are some of the other features? Walmart said it wants to enable the following:
Subscription power: Just like Walmart+ for consumers, this ecommerce platform has a membership element. Walmart Business+ offers perks such as free shipping, free pickup and delivery, rewards and a 5% discount on certain items. Membership is $98/year.
Key quote from Ashley Hubka, SVP & General Manager of Walmart Business: “[SMBs and nonprofits] are under more pressure than ever due to inflation and supply chain issues, adapting to a hybrid workforce and post-pandemic behavioral shifts. For months, we’ve been working with SMBs and nonprofits to build solutions just for them, with tools tailored to help teams run smoother, have the right items on hand and easily find products to meet their needs.”
What it says about ecommerce:
B2B: This launch comes a week after Walmart debuted retail tech tools on Salesforce’s app marketplace. That means Walmart’s two biggest announcements of 2023 have been focused on providing products and services for other businesses. It’s clear that Walmart sees potential to put its ecommerce tools to work for others, and reap the benefits of big orders that are paid on the company card. Amazon has sold to other businesses for years, so it’s not totally new. But given Walmart’s scale, it’s worth watching because it could become a big business, quickly.
Plus up: The addition of a membership element indicates that Walmart sees its B2B arm as being interconnected with the rest of its business. Executives talk on most Walmart earnings calls about how the consumer version of Walmart+ has run-on benefits that not only help drive ecommerce, but also lead to more in-store shopping. Coupled with a wider assortment of items, high-frequency Walmart+ users are also helping to grow advertising. Business customers are shopping on the same website, so it makes sense that they will be part of the flywheel, as well.
Buy it again: Across many of Walmart’s recent digital releases, there has been a common theme: Restocking is getting easier. Walmart’s direct-to-fridge delivery was in part positioned around reordering staples. Its Text to Shop feature learns preferences, making it easy to buy favorites again. Now, Walmart Business is organizing items in a way that makes them easy to reorder. It makes sense that Walmart would want to encourage repeats. Easier restocking essentially builds in recurring revenue. Walmart is known for its “big basket” weekly trips to the store. Now, its ecommerce tools are equipped to have many of those stock-up staples delivered.
Building for tougher times: Adding new customers from businesses. Encouraging them to commit to Walmart by becoming members. Making it easy to replenish. These are all things that can help Walmart at a time when the general consumer environment is signaling pullback, and the company is seeing less discretionary spending on non-consumable items. It’s clear Walmart executives have reviewed the assets the company has, and identified where they can be tuned for new opportunities that align with the moment we’re in. That’s what successful businesses do during tough times.
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.