As Walmart's Online Sales Soar it Pushes into Premium Fashion

Walmart reported a domestic sales increase of increase of 4.3% to $77.7 million and grew U.S. comp sales by 2.7% in its third quarter 2018. Sam's Club also saw strong member traffic, up 3.6%. The third quarter marked Walmart’s strongest U.S. sales growth since 2009, according to Reuters.

"We have momentum, and it's encouraging to see customers responding to our store and e-commerce initiatives,'' said Doug McMillon, Walmart's president and CEO.

Walmart earned an adjusted $1 a share, edging out the $0.98 that Wall Street was expecting and revenue came in at $123.18 billion, easily beating the $121 billion that was expected, according to Business Insider.

The mega retailer has been hard at work to compete in a tough environment and it looks like its efforts are paying off. Walmart has been testing automated pickup towers, same-day grocery delivery and is rolling out shelf-scanning robots to scan for shelf level out of stocks. It has also expanded online grocery pickup and launched Mobile Express Returns.

"We know [online grocery pickup] is working for our customers," said Steve Schmitt VP Investor Relations, Wal-Mart Stores, Inc. "We continue to expand it. We're in 1,100 locations now and expect to add another 1,000 next year. So that's a big initiative for us. It's working and our customers love it."

Walmart's U.S. online sales grew by 50% in the quarter. Over the past year, the retailer has aggressively expanded its online assortment. Online SKUs are at more than 70 million currently, up from 67 million last summer, it said. Walmart.com currently offers more than 60 million items on the site, compared to 20 million items last year. 

Now, the retailer known for low prices, is pushing into premium fashion.

Walmart has teamed up with Lord & Taylor to launch a flagship store on Walmart.com. Expected to launch in spring 2018, the specialized online experience will offer premium fashion brands directly from the Lord & Taylor flagship.

“Our goal is to create a premium fashion destination on Walmart.com,” said Denise Incandela, Head of Fashion, Walmart U.S. e-commerce. “We see customers on our site searching for higher-end items, and we are expanding our business online to focus on adding specialized and premium shopping experiences, starting with fashion."

Walmart also said it's evolving how customers will be able to shop fashion on the site, adding elements of discovery and inspiration. As part of this experience, Lord & Taylor will have a dedicated store on Walmart.com and the Walmart app.

"Walmart.com is a shopping destination that reaches a wide base of customers looking for premium fashion brands," said Liz Rodbell, President of Lord & Taylor. "They are a great company for us to work with as we continue to grow our digital presence."

A lot of things have been going right for Walmart as it continues to compete with Amazon. 

"In terms of other things that are working, it's a lot of different things," said Schmitt. "It's expanding assortment, it's quality of product, having in-stocks and price is a component of it as well."

Schmitt said being more disciplined with its costs is one of the big initiatives the company has going forward as it grows the business.

"We need to be more efficient. We have to manage labor costs and we have to look to do that in the most efficient way we can to reach the margin objectives that we have."