Walmart will combine its store, online buying teams, company memo says
- Walmart is trying to turn e-commerce into a profitable business.
- The big-box retailer expects e-commerce growth to slow to about 30% in fiscal 2021.
- Under the new structure, one team of buyers will choose and price all items.
Walmart is combining its teams of buyers for Walmart.com and the company's stores as the big-box retailer aims to turn e-commerce into a profitable business, according to a company memo sent Tuesday.
The restructuring of the buyer teams was first reported by The Wall Street Journal. The Journal, citing people familiar with the matter, said that Walmart is combining the two groups to decrease conflicts over the pricing of products online and in-store.
"Our customers see one Walmart, and they expect the same low prices and seamless experience no matter how they choose to shop with us," company spokesman Kevin Gardner said in an email. "Today we are making changes that put the customer at the center of how we buy and sell merchandise."
Asked whether the changes would cause job cuts, he said "That is not the intent of this change."
The two sides of Walmart's business have separate chief executives. Marc Lore, the founder of Jet.com, leads Walmart's e-commerce in U.S. John Furner leads the store side of the business.
In the memo, Lore and Furner said buyers will be broken up into six merchandising teams: apparel; consumables; entertainment, toys and seasonal; food; hardlines; and home. The teams will buy all of Walmart's items in that category, regardless of where they are sold.
Lore and Furner will stay in their roles and merchandising teams will report to both of them, according to the company memo. In the memo, they wrote that the change will better integrate the company and benefit customers.
"Our customers only see one Walmart, and they must be No. 1, always," they wrote in the email to employees.
Walmart has seen a surge of e-commerce growth, fueled by its online grocery business. It reported online sales growth of 35% during the fourth quarter and 37% for the year.
But the e-commerce side of Walmart's business has been costly and it's not yet profitable. It's had mixed success with e-commerce brands that it's acquired and incubated. Some brands, such as in-house mattress brand Allswell, have grown. Digital native menswear brand Bonobos has had layoffs and Walmart sold ModCloth, another brand it had acquired.
Walmart missed Wall Street's expectations for the fourth quarter, after a holiday season with weaker sales of toys and apparel. The company expects e-commerce growth to slow to about 30% in fiscal 2021, but said it's focused on driving up the sale of general merchandise such as apparel.
At the investor day last week, Walmart's Chief Financial Officer Brett Biggs said the company expects losses in e-commerce to be flat or slightly lower than last year.
Read memo here: