For example, the company waived March and April rents for in-store tenants and has given $35M for COVID-19 relief. McMillon emphasized the need to help others including suppliers, in-store tenants and government agencies, and also stressed the importance of providing financial relief to employees. Lewis noted, “Some of the more essential products and services now off-shore may very well come back to the U.S.” The impact of what has transpired over the past two months will shape the future of supply chains. Lewis agrees, “Supply chains have been enormously disrupted during this mess and I believe some of the lessons learned will yield better-controlled supply chains in the future.” Today’s supply chains need to be shorter, more agile and increase the speed to market. The issue of supply and demand comes into play and quite simply, staying up with the demand of some categories was difficult at the beginning of the pandemic in the U.S. Currently, inventory is down 8% with a sales growth of over 10%. Walmart, notably with one of the most efficient supply chains, experienced some challenges with inventory management. Barrett/PHOTOlink/MediaPunch /IPX PHOTOlink/MediaPunch/MediaPunch/IPx Factors include consumers ordering “onesies” which increases the costs of packaging, shipping, distribution and employee payroll.” Walmart is not alone in these added costs for e-commerce, as Lewis states, “This is the case across all retail segments.” This is probably one of the reasons Walmart decided to consolidate and fold jet.com into the Walmart ecosystem.Ĭontinued strong performance relies on supply chainĪn unexpected surge in bicycle sales has caused shortages in Walmart stores. Robin Lewis, CEO and founder of The Robin Report states, “E-commerce is costly for retailers. Typically, online businesses have high operating costs which can impact profitability. Factors contributing to the decline are the mix of products being sold (grocery and consumables have lower margins) and the shift of products being purchased online. Gross margins for Walmart decreased from 24.3 to 23.7% compared to last year. Online may be costly to operate but will grow customer loyalty Chopra said, “While 2020 certainly has many surprises ahead, consumers and brands are coming to see Walmart as a viable marketplace, and we believe will continue to show strong growth throughout the year.” The future of the digital business will grow, especially with retailers that can deliver these types of capabilities. Creating options for shoppers provides retailers a better way to stay connected with their customers and would include in-store shopping, scan-and-go, buying online, pick-up, delivery and ship-it. McMillon stated, “Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future.” Shoppers need a choice of shopping methods to satisfy their safety concerns and deliver essential products. Halzack/The Washington Post via Getty Images) 2016 The Washington Post Walmart has allocated designated parking spaces for online grocery pickup (Photo by Sarah.
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