Walmart Tests Placing Marketplace Inventory In Stores For Pickup and Delivery

During the upcoming holiday season, Walmart's third-party sellers may be able to leverage the retailer's massive network of stores to reach shoppers. Walmart is testing ways to place products sold by third-party sellers in Walmart stores, Kyle Carlyle, svp of global marketplace fulfillment for Walmart, said during a Walmart Connect event for advertising partners in New York this week. Up until now, third-party sellers have stored products in their own warehouses or in Walmart's facilities and can only sell products by shipping them, which may take several days. The test allows eligible products from third-party sellers to be picked up or delivered from a store. A Walmart spokesperson told ADWEEK the company has been offering a select assortment of marketplace items for pickup and delivery but declined to say where the tests are running. In theory, third-party suppliers could expose their brands to more shoppers. "Think about what that starts to make possible; a customer already in a shopping experience for groceries and everyday essentials could increasingly add marketplace items to that same experience," Carlyle said. "That helps sellers reach more customers through our stores and get products for them in hours and not days." In April, The Financial Times reported that experiments were underway in Dallas to use the shelves in back rooms of stores for delivering third-party merchandise. "It’s an intentional test that will help us learn and scale over time,” Manish Joneja, svp of Walmart's U.S. marketplace and Walmart Fulfillment Services, told the FT at the time. The continuation of the tests position Walmart in direct competition with Amazon, said Anne Mezzenga, founder and CEO of Retail Field Report and a former Target marketing consultant. "Walmart is slowly chipping away at every reason its consumer might have to fulfill any part of their order elsewhere," Mezzenga said. "What customer, when uploading their weekly grocery list, wants to wait sometimes up to three-plus days for key ingredients on their list or a new product that they want to try?" Walmart had previously explored featuring its marketplace items in store through displays with digital QR codes at one new store in Texas last year, Modern Retail reported. That test, however, only involved promoting items in the stores for consumers to buy online and ship, not for delivery or pickup from the stores. Scott Benedict, founder and CEO of Benedict Enterprises and a former ecommerce leader at Walmart and Sam's Club, said Walmart's ability to leverage store-based pickup and delivery points to a further blurring of the boundaries between the assortments of Walmart's physical stores and its broader digital marketplace. "A shopper may simply see Walmart as one integrated assortment—groceries, everyday essentials, and marketplace products brought together within the same shopping journey and, where possible, delivered or picked up on a similar timetable," Benedict said. However, Benedict said he expects challenges around picking the right items to bring into stores, and putting them in the right locations in the right quantity. "Also, the question of who owns the inventory until it is sold—Walmart or the seller—needs to be clarified," he added. More opportunities for sellers Walmart's Carlyle said the new fulfillment option is an example of how Walmart's scale can create more opportunities for third-party marketplace sellers that advertise via Walmart Connect. He added that marketplace sellers who use Walmart's advertising services see 8.6 times the sales of those who don't. "We can help sellers understand what Walmart customers are looking for, use those insights to shape their assortment and reach more customers through our shopping and advertising experiences, and increasingly, use our fulfillment network and stores to get products to customers faster," Carlyle said. Carlyle said the company has been working to connect more of its capabilities to help sellers get products to customers faster. In 2020, Walmart launched Walmart Fulfillment Services, allowing third-party sellers to use Walmart's supply chain capabilities. Its marketplace has since grown rapidly. Walmart's U.S. marketplace net sales grew more than 50% in the second quarter, according to its latest earnings release. "Marketplace is becoming an important part of our ecommerce ecosystem, with the business and how we serve customers," Carlyle said. "That momentum gives us a strong foundation to build on, but the next phase isn't about just more—it's about earning the next visit, having the right assortment for the moment or need is not enough. Customers need to find it, feel confident in the value and an experience that delivers with the speed that they expect." Walmart Connect is also working on tools to make it easier for marketplace sellers to run streaming TV ads. Ryan Mayward, svp and gm of Walmart Connect, said the company acquired streaming tech platform Vibe.co earlier this year in part to help Walmart’s marketplace of sellers run streaming campaigns for the first time.

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