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.
Walmart’s ecommerce growth over the last 4 years
Walmart’s ecommerce catapult began in 2016 with its $3.3 billion acquisition of Jet.com, which has now been retired. Walmart ecommerce grew 35.8% that year, outpacing Amazon’s 25.2% growth.
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.
Photo courtesy of Walmart.com.
Pattern and Walmart’s WFS beta program
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.
WFS logistics
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.
The advantages of WFS
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.
Which products are a good fit for WFS?
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.
How the WFS Seller Center portal works
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.
How Walmart fulfillment works
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.
Should I use Walmart Fulfillment Services?
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.
