Walmart, Sam’s Continue to Fight Amazon in Cloud, Ecommerce

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Walmart, Sam’s Continue to Fight Amazon in Cloud, Ecommerce

By Randy Hofbauer - 02/14/2018

Walmart Inc. is now hitting back at Amazon on the digital front by building its cloud network and expanding its ecommerce capabilities through its Sam’s Club club-store division, Reuters has reported.

Currently, Bentonville, Ark.-based Walmart operates six giant server farms, each bigger than 10 football fields, which cost millions but are beginning to pay off through its online sales, which have outpaced wider industry growth levels for the past few years, Reuters said. While most retailers rent out the computing capacity needed to store and manage the enormous amounts of customer data, Walmart opts to have its own internal cloud network, imitating Seattle-based Amazon’s cloud network for driving digital sales.

Owning its cloud network is helping Walmart remain competitive with Amazon’s pricing while also control inventory and other key functions, Reuters said. It also allows Walmart to create more customized offers and better services for shoppers, executives told the news outlet. For instance, Walmart is using cloud data to stock items frequently ordered via such voice-activated assistants as Google Home.

Meanwhile, Sam’s Club is consolidating its membership structure for customers and improving ecommerce offerings by adding free shipping and opening more ecommerce warehouses in 2018, Reuters noted. This, in addition to store closures and layoffs last month, are part of “a strategic shift” championed by new CEO John Furner, who is turning around Sam’s Club’s business.

Sam’s Club now will offer two membership offerings compared with the three it used to provide: Sam’s Club, for $45 a year, and Sam’s Plus, for $100 a year, Reuters said, quoting SamsClub.com CEO Jamie Iannone from a conference call. Moreover, the company will provide free shipping on 95 percent of its online offerings, requiring no minimum order size for members.

Additionally, Sam’s Club will open its first ecommerce fulfillment center, in Memphis and plans to ship its first package from there in the spring. Currently, the club chain relies on Walmart’s supply chain network to make online order deliveries. According to Reuters, other areas being considered for centers include Texas, central Florida, Southern California, the Chicago area, the Mid-Atlantic and the Northeast.