Walmart Extends Fulfillment Services to ‘Big and Bulky’ Sellers
Walmart is pushing its marketplace offering heavily in the retail giant’s latest battle to take e-commerce market share from Amazon. And like its chief rival, Walmart is hitting the ground running in expanding its fulfillment capabilities as the company on-boards more third-party sellers into its ecosystem.
While Walmart hasn’t revealed how many third-party sellers are on its marketplace since the end of 2021, when it tallied 130,000 merchants, it’s clear that the retailer’s Walmart Fulfillment Services (WFS) offering has become a major draw. The number of sellers using WFS increased more than 50 percent in the second quarter, said executive vice president and chief financial officer John David Rainey in an earnings call.
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The Bentonville behemoth is extending WFS access to sellers who list big and bulky items such as canoes or trampolines. With the extension, sellers can now use WFS to ship multi-box items like patio sets.
These new services mean more items can carry the Fulfilled by Walmart tag, which the company says helps drive conversion. Sellers see on average 50 percent growth in gross merchandise value (GMV) when shifting items to WFS, according to Manish Joneja, senior vice president, Walmart Marketplace and Walmart Fulfillment Services, Walmart U.S.
Walmart is also enabling third-party sellers with a physical storefront to use Walmart’s technology to power curbside pickup, or gain access to the company’s network of delivery drivers to drop online purchases at customers’ doorsteps.
“Walmart blazed a trail in pickup and delivery, perfecting the systems and technology needed to provide a great customer experience,” said Joneja in a blog post. “Now we’re bringing this expertise to sellers by standing up local pickup and delivery for sellers who have physical stores. Customers can pick up their items directly or have same-day delivery through our last-mile delivery network. This will lower sellers’ fulfillment costs, create new ways to convert sales and delight customers along the way.”
The retailer also unveiled that it was opening up the marketplace offering in Chile to eligible cross-border sellers early next year, adding to the company’s existing markets of Canada, Mexico and the U.S.
The mass merchant broke the news at its inaugural Walmart Marketplace Seller Summit, an event held Wednesday and Thursday in Las Vegas that drew more than 1,500 people from businesses that sell apparel, party supplies, jewelry and more on Walmart’s marketplace.
In the blog post, Joneja described Walmart Marketplace as an “endless aisle where sellers of all sizes can offer customers the items they need and love.”
Walmart’s expansion of WFS continually draws more comparisons to Amazon’s Fulfillment by Amazon (FBA) service, which enables sellers to store their products in Amazon warehouses, where company employees can pick, pack and ship the goods. Products under FBA are also Prime-eligible, which gives consumers access to free two-day shipping and ultimately benefits the merchant.
WFS already had no inventory minimums or maximums, but by eliminating weight limits for bulky products, Walmart gives itself a more even playing field with FBA, which had no weight or product dimension limits. Walmart also offers WFS without requiring recurring monthly fees for sellers, instead exclusively charging for the product sold via fulfillment and storage fees.
Walmart’s marketplace has become a lucrative endeavor, in that it is expected to see $8.57 billion in sales this year, up 12.6 percent over last year, according to a June forecast from eMarketer. Last year, the marketplace made up an estimated 10.7 percent of Walmart’s overall retail e-commerce sales.
The offering is still much smaller than Amazon’s, with eMarketer saying Walmart Marketplace will comprise 2.2 percent of total U.S. retail marketplace sales this year compared with Amazon’s outlandish 72.4 percent share.
Marketplace growth hasn’t been the only beneficiary of Walmart’s fulfillment ambitions, with the company seeing 24 percent e-commerce growth in the U.S., led by double-digit growth in store-fulfilled pickup and delivery.
According to CEO Doug McMillon, stores fulfill more than 50 percent of digital orders for Walmart.
The retail giant has also been on a massive automation kick over the past year as it fortifies its fulfillment network, currently updating all 42 U.S. regional distribution centers (RDC) as the chain modernizes its supply chain network.
Most recently, Walmart opened its first automated fulfillment center in Alberta, Canada in June, which expands two-day shipping to 97 percent of Canadian residents.
