Analysis: Walmart means business

The retail giant has launched a new online offering, initially targeting SMBs and non-profits

On 20 January, retail behemoth Walmart announced the launch of Walmart Business, a dedicated e-commerce site – business. walmart.com – aimed at US small firms and non-profit organisations. The site actually went live last September and has been operating under the radar ever since.

Walmart Business offers more than 100,000 curated items organised into seven categories: office, technology, breakroom, cleaning, facility, teacher supplies and professional. The company said the selection was created following client consultation.

“Our focus is to remove complexity in purchasing, lower costs and give our customers more opportunities to serve their customers and communities,” said Ashley Hubka, General Manager of Walmart Business.

Signing up to Walmart Business includes the ability to add up to five users to a single account and the sharing of payment information, order history and purchasing power across teams. There is a membership tier called Walmart Business+ costing $98 a year. For this price, customers get free shipping on all orders, free delivery from stores for orders of $35 or more, a rewards programme and a subscription service.

Targeting Amazon

As the name of the initiative suggests, Walmart is clearly going after customers of Amazon’s B2B offering, Amazon Business. There are some important differences, however.

Walmart Business is not a marketplace with millions of products and thousands of sellers; the current assortment is entirely sold and shipped by Walmart itself. In addition, Business+ membership is a one-size-fits-all subscription, unlike the multi-tiered Business Prime from Amazon. Nor does it offer some of the procurement features, such as guided buying, which can be found on Amazon.

That may have more to do with the customer type Walmart is evidently targeting – very small or microbusinesses and local non-profits which are not likely to need sophisticated reporting tools for their purchases. It is still a very large potential client base: according to official figures, there are about 23 million companies in the US that employ fewer than 20 people and over 1.5 million registered non-profits.

Another key differentiator is Walmart’s store network, with around 4,650 locations across the US as of February 2023. There has been a growing trend in retail to use shops as mini fulfilment centres. Their proximity to customers helps to reduce shipping costs – or virtually eliminate them if in-store pick-up is selected.

Will Walmart Business be a serious competitor to specialist office supplies retailers such as Office Depot and Staples? Eamon Kelly, Partner at Edgewater Research, doesn’t believe so. “I don’t think there is any overlap on the B2B side,” he told OPI, suggesting that many microbusinesses had already transitioned to Amazon.

“Walmart is focused on utilising its stores and their inventories to drive efficiencies. This kind of inventory is built for consumers, not B2B. Organisations purchase different products and quantity increments that are not necessarily fulfilled by existing selections in stores.”

Walmart is clearly going after customers of [...] Amazon Business

BIGGER GOALS?

Yet, Walmart may have bigger plans for its Business programme. A recent job listing advertised for the post of Director of New Business Development – Government Procurement, “to lead our efforts to serve government entities, starting with state, local, education and cooperative buyers”.

It continued: “While our initial focus was on businesses and non-profits, over the medium term, we see the government sector as a key segment for Walmart Business.”

That would certainly see Walmart looking to compete in this space, not only with Staples, ODP Business Solutions and Amazon, but also independents which do business with public sector agencies in their localities.