- Click & Collect is driving loyalty and more visits to Walmart stores.
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Walmart's new feature has its e-commerce business growing faster than Amazon's (WMT)
Morgan Stanley says that Walmart's e-commerce business grows faster than Amazon's due to its successful Click & Collect services and steady growth in overall comparable grocery sales.
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"C&C is clearly driving loyalty and greater frequency to Walmart stores,"Simeon Gutman,
"Walmart's Click & Collect service is now available in 1,800 stores, up 100% from a year ago. Based on our checks, a Supercenter can handle 90 pickups per day, with some capable of 120. The feedback from stores and customers has been consistently positive."
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helping loading grocery items into consumers' cars and adding lockers that
By Gutman's calculation, Click & Collect growth was 20-22%, or about half of the 40% total e-commerce growth it saw. By comparison, Amazon’s global Gross Merchandise Volume growth was 19%.
Walmart's comparable grocery sales, its largest category, grew 4.5% in the quarter ended in June, compared with the grocery retail sales growth of 3.3%. Given that Walmart already had a 20% to 25% market share in grocery, this impressive share gain suggests that Walmart is growing sales in both stores and online, and is gaining new customers, Gutman said.
However, he warned that Click & Collect could be a double edged sword as it's accretive to sales but dilutive to margin. And also, in the context of the investment narrative for Walmart, which is a burgeoning e-commerce business, chasing Amazon and sporting a multiple well in excess of its growth, 20% core sale growth could be viewed as disappointing.
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