As reported in January, Walmart U.S. ecommerce sales grew 35% in 2019. Building on that momentum in early 2020, the company announced Walmart Fulfillment Services (WFS), a new fulfillment capability for Walmart.com marketplace sellers that began rolling out in late February.
Built by Walmart with sellers, for sellers, the program offers low, transparent pricing (often lower than FBA), personalized account management, inventory forecasting, and the opportunity for businesses to scale profitability and assortment. Customers benefit from a larger assortment of premium brands and products, easy returns, dedicated customer care, and perhaps most significant—no annual membership or subscription fees.
Then 2017 was another year of growth with the acquisitions of shoebuy.com and moosejaw.com, and a 42.8% increase in ecommerce sales.
Now, into 2020, Walmart.com has passed eBay to become the second-largest ecommerce marketplace in the U.S., and its growth continues to outpace that of its two largest competitors, Amazon and eBay. While Amazon lost 10.4% of the marketshare between 2018 and 2020, Walmart experienced an almost 50% sales share growth. Thanks to this rapid growth, Walmart’s 2020 ecommerce sales are estimated to near $30B, a $9B increase from 2019. WFS is the next step for Walmart in competing for increased marketshare and sales and could be the next step for you to grow your brand with multichannel selling.
Just this year, Walmart launched their new Walmart+ subscription service, again mirroring and competing with Amazon to grow their ecommerce capabilities and grab even more marketshare.
Pattern had the unique opportunity to take part in the WFS beta release and help Walmart.com build out this new capability. Because Pattern already has products listed in Walmart’s marketplace, and with our extensive FBA experience, the beta release was an exceptional opportunity offered by Walmart.
Leveraging Walmart’s supply chain infrastructure and ecommerce network now allows us to more efficiently fulfill orders, boost sales, and grow and protect our brands on Walmart.com. We can also help brands launch advertising campaigns on Walmart, effectively track Walmart ads, set up Walmart Sponsored Products, win on Walmart’s SEO algorithm, and more.
Through WFS, Walmart—the no. 1 retailer in the U.S.—handles all refunds, returns, and customer service. Walmart fulfillment centers store, pack, pick, and ship all eligible products. However, restrictions do apply, and all items must currently meet the dimensional requirements of 25” x 20” x 14” and must weigh less than 30 lbs. Sellers must ship products to Walmart fulfillment centers from somewhere in the United States, and perishable or regulated products aren’t eligible.
Fees are determined by weight and cover Walmart storage, fulfillment, and customer and seller support. Walmart WFS only ships to the 50 U.S. states, some military addresses, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
Perhaps the most attractive feature of WFS for customers is the simple, quick process for deliveries and returns. As long as customers spend at least $35 on their order, they receive guaranteed free 2-day shipping—no membership or annual fees required. This guarantee offers an attractive alternative for customers who may order on marketplaces like Amazon without the shipping benefits of paid memberships.
Returns through WFS are easy, too—the U.S. is home to 20 Walmart fulfillment centers and 4,700 stores, and 90% of Americans live within 15 minutes of a Walmart store, making returns quick and convenient. Unlike stores like Whole Foods or Kohls, where Amazon customers can return purchases, Walmart holds an unparalleled prevalence in the U.S., with 95% of Americans shopping in a Walmart store or on Walmart.com in 2019.
Brands also have a lot to love about Walmart WFS. For one, it’s low-cost. After you send your items to a Walmart fulfillment center, Walmart stores it within 1-2% of Amazon storage pricing. The fulfillment service also helps preserve your brand integrity by giving brands price control of inventory and avoiding commingling inventory by default, which reduces fraud and mislabeling. Walmart’s practice of storing sellers’ products separately makes it less likely for your brand to be held accountable for another merchant’s defective or damaged products.
Compared to ecommerce giant Amazon, Walmart WFS has a better buyer to seller ratio—on Walmart’s website, brands compete with 30K other sellers instead of Amazon’s 3 million, making it easier for your brand to reach Walmart’s 116 million unique monthly visitors.
Although Amazon FBA certainly has the benefit of time and experience, Walmart has the benefit of the world’s largest supply chain infrastructure with great storage and shipping capabilities. Items in the WFS program also receive both TwoDay and Fulfilled by Walmart tags, giving them higher search rankings, conversion, and Buy Box prominence.
Although Walmart stores are typically associated with their “everyday low prices” and budget buys, Walmart.com is shifting its focus to a younger, urban, and more affluent demographic, according to Retail Dive.
After acquiring several high-end ecommerce platforms, Walmart.com now sells luxury items like Rolex watches, Louis Vuitton handbags, and Chanel perfume. According to Cody Parrot, a Senior Brand Manager at Pattern, “luxury brands can find great success on the re-branded platform.” If the success of WFS in 2020 is any indication, these brands can generate even more revenue through WFS.
It is worth noting, however, that Walmart’s rapid ecommerce growth isn’t due to luxury brands alone, and the corporation is expanding its assortment to all brands that are currently not on Walmart.com.
Walmart suggests brands can increase their revenue with WFS by prioritizing items and brands new to Walmart.com, selecting competitively-priced products, creating high-quality page content for each item, providing sufficient inventory, and joining the Walmart Sponsored Products Program. Conversely, Walmart does not recommend products for WFS if they already have multiple offers on Walmart.com or have poor item page content.
The WFS portal is located in Seller Center alongside Seller Fulfilled listings. To convert Seller Fulfilled items to WFS, Walmart.com provides a specification sheet that includes additional information required for fulfillment, including tax codes, packaged product dimensions, hazmat identification, etc.
Once this specification sheet is completed and uploaded in Walmart Seller Center, the product becomes WFS eligible and is ready to ship into Walmart fulfillment centers.
In order for a Walmart fulfillment center to receive product, the seller must submit a purchase order (PO) through Walmart’s Global Supply Chain Operations system (GSCOPE). The seller simply downloads a PO file, fills in the product information, and uploads the spreadsheet into the system.
Photo courtesy of Walmart.com.
GSCOPE tracks the progress of the PO in a dedicated feed; once the PO has successfully uploaded, the fulfillment center is ready to receive the product and the listing can go live. In GSCOPE, the seller can track items received and inventory numbers including on hand units, reserved units and damaged units.
In Walmart Seller Center, Walmart tracks sales, shipping performance, customer returns, and sellers can easily view metrics, edit listings, and manage price promotions and product updates.
Photo courtesy of Walmart.com.
Thus far, Pattern has seen great success with the new WFS program. Our sales on Walmart increased 3,000% post-launch, and Buy Box attainment jumped as well.
Moreover, given the program has significantly fewer sellers, Walmart.com sellers receive nearly 27,000 visitors per month, compared to roughly 2,100 visitors on Amazon. Less competing sales equals more product sold and increased revenue for your brand.
Pattern partner Thorne Research saw a 207% increase in Walmart.com sales from the first half of November 2019 to the last half. The difference? On Nov. 13, Thorne Research began selling through Walmart Fulfillment.
Although Thorne Research only sold on WFS for the last month and a half of 2019, the sales made in that time comprised 25% of the brand’s total Walmart.com sales for the year. Equally impressive is the 62% increase in sales between December 2018 marketplace sales and 2019 WFS sales. This success continued into 2020 with 22 more Thorne Research Products on WFS and a 771% increase in sales year over year between October 2019 and March 2020.
With WFS, Pattern has seen a 166% increase in business year over year and a 176% increase in incremental revenue from January to March 2020. So far, Walmart Fulfillment has proved to be a powerful tool for brands to increase their visibility and revenue on the Walmart marketplace.
Even if your brand isn’t currently selling on Walmart.com, you can still apply to sell on WFS. Selling on multiple marketplaces can help you build brand recognition, reach different demographics, and mitigate risk. According to Stitch Labs, retailers who sell on two marketplaces see 190% more revenue than those who sell on just one. With Walmart’s rapid ecommerce growth in recent years, there’s no better time than now to reap the benefits of diversifying your marketplace.
Are you ready to grow your business and protect your brand on Walmart.com? We can help. Contact a Pattern representative today through the form below and we’ll be in touch.
Editor’s Note: This blog, originally published February 25, 2020, has been updated and republished to reflect our most recent data on the topic.
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Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.
In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.
From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.
According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.
From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.
It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.
A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.
Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.
The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)
Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.
Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.
Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.
Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.