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Walmart has a hole to fill at its online unit, and whoever assumes the role faces a big challenge ahead.
Walmart has a hole to fill at its online unit, and whoever assumes the role faces a big challenge ahead.

Walmart must hire someone who can stop the bleeding at its online business

INTERNATIONAL NEWS

By Matthew Boyle - Jul 15th, 09:55

Walmart has a hole to fill at its online unit, and whoever assumes the role faces a big challenge ahead. 

The company is searching for a new chief revenue officer for its US e-commerce business, who would work under online leader Marc Lore to help map out its battle plan against Amazon.com, Target, and other rivals. The yet-to-be-named executive will also work to stem the online businesses’ mounting losses in an increasingly competitive digital arena.

The vacancy was created when Scott Hilton, a senior vice president and Lore’s longtime lieutenant, left the company in May, according to an internal memo obtained by Bloomberg. Hilton, whose departure hadn’t been previously reported, didn’t reply to an e-mailed request for comment.

Longtime lieutenant

Hilton met Lore about 14 years ago when both were students at the University of Pennsylvania’s Wharton business school, the memo said. He became Lore’s first employee at Quidsi, the e-commerce startup that included Diapers.com and was acquired by Amazon in 2011. Not long after, Lore left Amazon to launch Jet.com, bringing Hilton with him.

When Jet was acquired by Walmart for $3.3bn in 2016, Lore, Hilton and other Jet leaders assumed senior posts at its online business. They revamped Walmart’s digital offerings with millions of new products, a sleeker website and free two-day delivery for orders of $35 or more.

“Scott created a retail organisation that has brought on some incredible leaders, new brands, significantly expanded our assortment and designed and built the tools that have set us on a course to enable Walmart to efficiently scale and compete in the ever-evolving retail arena,” Lore said in the memo announcing Hilton’s departure.

Walmart’s US online business has grown, becoming a viable second fiddle to Amazon after the division’s revenue expanded 40% in 2018. But the business continues to be in the red, with losses expected in 2019 of about $1.7bn, up from $1.4bn in 2018, according to Morgan Stanley estimates.

Web struggles

A portion of the retailer’s web traffic has also declined, according to data tracker SimilarWeb, falling by about a third between June 2017 and June 2019. SimilarWeb measures so-called non-bounced traffic, or customer visits that go beyond the landing page.

A big reason for the falloff is that Walmart’s customers are increasingly using its shopping apps, particularly for grocery orders, rather than its website. And even as Walmart.com’s traffic has declined, sales are up as customers buy more items on each visit and purchase higher-priced goods, such as the Lord & Taylor apparel it started offering in 2018.

A Walmart.com spokesperson said the SimilarWeb data was “completely incorrect”, adding that overall traffic to Walmart.com “has increased significantly during that time period”.

To help streamline things, Walmart brought Jet fully under its umbrella in June. It has also encouraged consumers to pick up their online orders at the store, saving Walmart money on home-delivery costs. More recently, it has rolled out a next-day-delivery service that’s now in 28 states, according to data tracker Marketplace Pulse, which Lore claims is less expensive to operate as orders typically come in one box from a nearby warehouse.

Hilton’s departure follows that of chief technology officer Jeremy King, who left in March for Pinterest and has been replaced by tech-industry veteran Suresh Kumar, who started work this week. Other dotcom executives have also moved on in recent weeks, such as Darren MacDonald, a vice-president, and GM of entertainment products, who became chief digital and innovation officer at Petco in June.

The management reshuffles come as the company looks to counter next week’s Prime Day, a web-sales holiday created by Amazon that has become part of every retailer’s calendar.
 

Read more about: business | retail | ecommerce | walmart

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