The Academy Awards are over, and the trophies have all gone out. Granted, in the case of the Best Picture Award, getting the right trophy into the right hand tuned out to be a more difficult order than normal, but all’s well that ends well. Plus, given the outcomes of both the Super Bowl and Academy Awards, we think it is safe to assume that no one will ever skip the ending of anything ever again.
And while the Oscars were certainly the most star-studded and attention-grabbing competition last week, they weren’t the only one. Walmart showed some early results to goose the gas on eCommerce, which is starting to help the company gain some ground back on Amazon; Zelle is now open for business and coming for Venmo; and Alibaba made its latest big brick-and-mortar play.
So who took home the metaphorical little gold statues last week?
Walmart’s Winning Results
Never let it be said an old dog can’t learn new tricks, particularly with a new trainer in the mix.
When Walmart announced its earnings last week, it had some surprises in store. It looks like the nation’s biggest brick-and-mortar player is starting to gain some traction in its bid to be a bit more nimble, a bit more digital and a bit more alluring to shoppers even in its brick-and-mortar locations.
“As I step back and look at the retail landscape, customer expectations continue to change rapidly,” Walmart CEO Doug McMillon noted in his post-earnings debrief with investors. “They will increasingly expect even more personalization and convenience in their shopping experience. We’re moving quickly to respond to the current opportunities as well as to innovate and transform the shopping experience for our customers in the future. And while we must do more, we believe we’re on the right track as we work to be the most trusted retailer for our customers, provide ongoing opportunity for our associates and deliver results for our shareholders.”
Earnings beat expectations, although revenue came in a bit below pre-release forecasts. But Walmart’s stock was up in afterhours trading nonetheless, largely driven by the eCommerce figures.
Walmart’s eCommerce revenue in the United States rose 29 percent from a year ago, hence all the “look-out Amazon” headlines: The house that Bezos built notched “only” 22 percent in the same time period.
“We’re the second-largest U.S. online retailer by revenue, one of the top three online retailers by traffic and our Walmart app is among the top three apps in retail. We acquired Jet.com in the second half of last year and welcomed Marc Lore, the CEO of our U.S. eCommerce business. Marc is moving quickly. From a marketplace perspective, we now have over 35 million SKUs — more than quadrupling the number available at the beginning of the year. We recently announced free 2-day shipping on millions of items with a minimum order of $35. And, as you might expect, we’ve seen a nice uptick in our eCommerce business since this launch. We’re also leveraging the strengths of Walmart and Jet to make both platforms better — I’m excited about what’s to come,” said McMillon.
Walmart was also touting how much more mobile-enabled it has become — McMillon noted that 70 percent of the online sales through the Black Friday and Cyber Monday periods were done through mobile devices.
Amazon, of course, has a fairly impressive lead in this race — there is a big gap between the number one and number two eCommerce positions — but Walmart, with the billions it has spent over the past several years to up its eCommerce game, is clearly ready to make this a closer competition.
Zelle Is Officially Out There
The battle between big bank-backed Zelle and PayPal property Venmo starts now. As of last week, Bank of America (BoA) had officially announced that it would be the first to incorporate P2P payments platform Zelle into its banking app. That means as of now, BoA customers will have the ability to transfer funds P2P and use the service to even split payments.
“When Zelle rolls out among all the partner banks later this year, the platform will provide consumers a faster, easier way to send and receive payments in minutes without leaving the security of their own financial institution,” BoA noted in a release.
And that partner banking network, for Zelle, certainly packs a notable punch. All in all, 19 banks have signed on for Zelle — BoA, Chase, Citigroup, Wells Fargo and U.S. Bancorp, among others — with one fairly simple objective: Catch and pass Venmo in the P2P space.
That app will work with any debit card — regardless of what bank issued it.
The race with Venmo will be tough — and Venmo has a big head start, since it was first founded in 2009. It processed $17.6 billion in transactions last year, a 135 percent increase from the previous year. And Venmo’s base is almost inordinately fond of it.
But Zelle has a big advantage all its own — a cemented connection to the big banks where millions of Americans keep their money. Want to request $40 from a friend? Using Zelle means those funds hit the user’s actual bank account within minutes of the transaction.
A Venmo user, on the other hand, would see the funds in the Venmo wallet — but would then have to cash out the balance and wait for its arrival in order to actually turn it into cash.
Venmo is working hard to fix that — PayPal’s deal with Visa and Mastercard earlier this year makes it possible to move money over debit networks, and by the mid-year mark, it should be possible to cash out a PayPal account nearly instantly. Whether the time in market with the faster payout feature will help propel Zelle remains to be seen.
Alibaba’s Latest Brick-And-Mortar Bet
China’s Alibaba Group and Bailian Group — China’s largest retailer by store numbers — have announced a new strategic partnership.
The two firms’ first area of collaboration will be supply-chain technology using Alibaba’s Big Data capabilities. The partnership will also see Alipay payments integrated with Bailian Group’s existing membership program.
The news has been popular with investors thus far — shares bounced up, and hard — though analysts have warned that it could take years before the returns from Big Data use can really be seen or felt in either chain’s earnings and revenue.
“There is a big push right now across brands to try and figure out how to mix physical and online shopping, but gains so far have been limited,” said Shanghai-based retail analyst Ben Cavender at China Market Research Group.
Bailian operates 4,700 outlets in 200 cities — roughly double the number of stores owned by Suning, Intime and Sanjiang combined. Supermarkets, convenience stores and pharmacies all fall under the Bailian wheelhouse.
Alibaba has an active user base of around 500 million and aims to tap the entirely of China’s $4.8 trillion retail economy with the power of its data management tools.
The deal does not include any direct financial investment in Bailian — but does represents another move on Alibaba’s part to move into another area of the growing Chinese retail market (particularly as online sales are starting to slow some).
So what did we learn this week? A little competition brings on the creativity. Walmart is reimagining eCommerce, Alibaba is growing into the real world and Zelle is going to see if the big banks can still ride the P2P payments wave.
Until next week.
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