Walmart Expands Its Web Marketplace With Shopify

Plus, the retail giant is testing one store with self-checkout only.

June 16, 2020

BENTONVILLE, Ark.—The superstore Walmart is ramping up ways to provide its customers with some tech-savvy services, both online and in-store.

Online, Walmart is teaming up with e-commerce giant Shopify, a Canadian-based e-commerce platform, to expand its third-party marketplace presence and grab more of the world’s online shopping transactions, reports Bloomberg.

Some 1,200 companies that sell online using Shopify’s tech will be able to sell on Walmart’s U.S. marketplace by the end of the year, according to Walmart executive Jeff Clementz, vice president of Walmart Marketplace.

The company’s marketplace site, which already offers more 45,000 different merchants and more than 75 million products, grew faster than Walmart’s overall web business in the first quarter. The Shopify partnership is Walmart’s latest attempt to expand the scale and profitability of its $21.5 billion U.S. e-commerce business, which is gaining ground on market leader Amazon, although it continues losing money.

Recently, Walmart rolled out a fulfillment center for third-party sellers, allowed customers to return marketplace items to its physical stores and eliminated millions of third-party items that didn’t meet quality standards.

“There are many Shopify sellers who were already on, but we have not penetrated their base to the extent possible,” Clementz told Bloomberg. “There’s a tremendous opportunity.”

Deeper Pool of Customers

For Shopify, the deal provides its merchant network access to Walmart’s customers, and it’s “a win-win for both companies,” said Juozas Kaziukėnas, founder of Marketplace Pulse, an e-commerce researcher. However, the partnership diverges from Shopify’s typical strategy of acting as a platform for brands competing with large retailers, he noted.

Since its founding in 2006, Shopify has become the platform of choice for businesses of all sizes that are looking to get online cheaply and quickly. Monthly fees start at just $29, which buys a virtual shop and everything required to run it, including tools to manage payments, inventory and shipping.

Walmart and Shopify had been in talks on and off for years, but discussions intensified over the past six months. A recent test with several Shopify sellers went well, and Clementz expects to see thousands of sellers on Walmart’s marketplace.

While Amazon remains the “unquestioned leader,” Walmart’s ability to offer space in its massive network of stores is an important advantage and could attract vendors. Unlike Amazon’s marketplace, Walmart’s is invite-only so it can vet sellers. It also uses machine learning and keyword recognition technology to spot suspect sellers.

Self Checkout Test

Meanwhile in Fayetteville, Arkansas, a Walmart store is reimagining the shopping experience by using self-checkout counters exclusively, in lieu of traditional cashier lanes, reports Fox Business.

Walmart Supercenter Store #359 is removing conveyor belt lanes and replacing them with self-checkout counters to see if the increased use of self-checkout will speed up purchases and provide a healthier shopping experience through less human interaction.

According to the company, employees will be available to help with self-checkout and will also check out groceries for anyone wanting a traditional shopping experience. If the test run is a hit, the new design could be rolled out to stores across the country. Timing will depend on customer and employee feedback, said a Walmart spokesperson.

The news comes a few weeks after America's largest retailer announced it would soon update the chain’s apps so customers can shop online for everything from groceries to apparel and electronics.