Walmart’s Unified Commerce Approach Allows It to Flourish in Challenging Environment
At A Glance
- Walmart increased global sales by $38 billion in fiscal '23, surpassing $600 billion in revenue
- All three Walmart segments - Walmart U.S., Walmart International, and Sam’s Club U.S. - showed significant momentum
- Walmart considers itself an omnichannel retailer that is people-led and tech-powered
- E-commerce now generates more than $80 billion in revenue, accounting for more than 13% of overall sales
- The company has nearly 3,500 same-day delivery and 4,600 pickup locations
Walmart delivered a solid finish to the year, acting aggressively and quickly in the previous two quarters to offset the company's cost and inventory challenges last year. Walmart increased global sales by $38 billion in fiscal '23, surpassing $600 billion in revenue for the first time in its history.
All three Walmart segments - Walmart U.S., Walmart International, and Sam’s Club U.S. - showed significant momentum. “Walmart U.S. grew sales by more than $27 billion. International had another strong year with sales and profit growth of about 9%, excluding divestitures, restructuring, and currency,” said Walmart’s Chief Executive Officer, Doug McMillon. “And Sam's Club U.S. grew sales by more than $10 billion as we delivered double-digit comp growth for the third consecutive year with membership count at a record high and strong growth in membership income.”
As Walmart navigated the short term, it also advanced its strategic priorities. So, the big picture strategy for Walmart is simple - to bring purpose to the lives of those Walmart serves. Walmart considers itself an omnichannel retailer that is people-led and tech-powered to help consumers lead better lives and save money.
Walmart strives to enhance a customer-centric experience by seamlessly integrating its eCommerce and retail store operations. All these elements combined create a flywheel effect, resulting in relationships where customers perceive Walmart as the one-stop destination. E-commerce now generates more than $80 billion in revenue, accounting for more than 13% of overall sales.
Walmart serves 230 million customers across 10,500 stores and various eCommerce platforms under 46 banners in 24 countries. “One of the things I have always appreciated about this company is that it's naturally hedged,” said McMillan. “If customers want more of something and less of something else, we shift our inventory. If the economy is strong, our customers have more money, and that's great. If things are tougher, they come to us for value.”
As Walmart plans for its new fiscal year, the company anticipates stubborn inflation in consumables and dry groceries. Walmart intends to focus more on earning sales through general merchandise to offset the impact of inflation as much as possible. “When we think about our business today compared to what it was during prior economic downturns, we now have a more compelling offer, a true omnichannel experience that makes us optimistic that more higher-income families will continue shopping with us across categories because we have pickup, delivery, and membership,” McMillon added.
Walmart executes its strategy by expanding its offerings, such as its Walmart Fulfillment Services, Walmart Connect advertising business, Walmart Health, and its financial services business. Furthermore, the Walmart+ membership provides its customers with an enhanced omnichannel shopping experience, including unlimited delivery from stores, unlimited free shipping with no order minimum on eligible items, mobile scan & go for a seamless physical store experience, and fuel and pharmacy discounts. These members recognize Walmart’s strength of convenience even more than an average customer.
“As it relates to our customer or member value proposition, we continue to have a strength with respect to value while we're expanding choice by growing our assortment on Walmart.com, and we're improving as it relates to experience,” McMillon said. “Being an at-scale omnichannel retailer creates unique opportunities to innovate in the area of experience. That includes products like scan & go at Sam's Club, and a newer in-house conversational AI platform enabling a voice and chat capability used by more than 50 million customers and an average of 1 million associates across the U.S., Mexico, Canada, and Chile.”