Walmart’s E-Commerce Operation In Turmoil: Report

By Alan Wolf

Walmart’s E-Commerce Operation In Turmoil: Report

All is not well at Walmart.com.

Despite a 40-percent increase in online sales last year, the discounter’s domestic e-commerce business and its high-profile CEO Marc Lore are under siege by investors, board members and fellow Walmart executives. The reason, according to a report by news site Recode/Vox, is a projected $1 billion loss for the digital division this year.

Lore came on board three years ago as part of Walmart’s $3.3 billion acquisition of Jet.com, the discount e-tail site he founded after selling his Diapers.com business to Amazon. Walmart’s goal, and Lore’s imperative, is to catch up with No. 1 e-tailer Amazon, which left Walmart in the digital dust, and the company essentially handed him a blank check.

Now, three years and hundreds of millions of dollars later, Walmart.com has barely made a dent: online sales still only account for 5 percent of the company’s U.S. business, Recode said, and its e-commerce assortment remains relatively limited. Lore has reportedly lobbied the board for billions of dollars a year to open dozens of dedicated warehouses in order to match Amazon’s breadth of product and timeliness of delivery, but CEO Doug McMillon and U.S. chief Greg Foran have balked.

“It’s taking longer than I thought it was going to,” McMillion told analysts last fall, about staunching the flow of red ink. Foran’s beef: Lore’s budget-busting digital bills are diverting resources from money-making initiatives within the retailer’s brick-and-mortar stores.

Sources told Recode that the corporate in-fighting is taking a toll on Lore, who is an entrepreneur at heart, and that insiders expect him to leave Walmart before his five-year commitment ends in 2021.

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