The COVID-19 pandemic has encouraged people across the U.S. to shop more online, and the Walmart Marketplace was one of many outlets the public turned to. As a result, Walmart's ecommerce segment in the U.S. grew by 74% in the first quarter of 2020.
On June 15, 2020, Walmart announced that it would be partnering with Shopify to add 1,200 new sellers this year to expand its online assortment even further. As the nation's strongest omnichannel merchant, Walmart is now securing its spot as the second-best ecommerce marketplace behind Amazon. Its physical stores allow shoppers to return items in person, and this new partnership with Shopify is sure to attract many new merchants.
- Shopify sellers can take advantage of 120 million monthly online visitors to Walmart
- There are no setup or monthly fees, only transaction fees
- Changes to listing data in Shopify automatically upload to Walmart Marketplace
Walmart Marketplace overview
Similar to Amazon, Walmart Marketplace connects third-party sellers to customers looking to buy products online. Sellers can handle fulfillment themselves, or Walmart can store and ship products if sellers qualify for Walmart Fulfillment Services (WFS). Eligible merchants can also offer 2 day shipping through WFS or their own fulfillment. The Marketplace also offers pay-per-click advertising for sellers to promote products.
While Walmart's ecommerce site gets less than half of the monthly visitors as Amazon, it has one advantage : physical stores. Walmart lets customers return most Marketplace items at a physical store. That makes shopping online that much easier since about 90% of people in the U.S. live within 10 miles of a Walmart.
Lastly, there are no setup or monthly fees in the Marketplace, only referral fees per transaction.
Walmart Marketplace expands to partner with Shopify sellers
In Walmart's announcement, Vice president Jeff Clementz said,
". . . We are joining forces with Shopify, an all-in-one commerce platform used by more than 1 million businesses, to open the Walmart Marketplace to their sellers. . . . We are focused on U.S.-based small and medium businesses whose assortment complements ours and have a track record of exceeding customers’ expectations."
The partnership will allow approved Shopify sellers to seamlessly list their products on Walmart.com. Listings and payments will be managed through Shopify, so the initial setup is easy. When sellers change listing data on Shopify, their pages on Walmart will automatically update as well.
To get things going, brands with a Shopify account can install the Walmart Marketplace app from Shopify's app store. After that, brands will complete the application and wait for a decision from Walmart. If approved, a seller can list as many products as they like, provided the products fit in with Walmart's guidelines.
What does this expansion mean for brands?
Clementz said the company expects to add 1,200 Shopify merchants by the end of 2020. Digital-native brands on Shopify can utilize Walmart's marketplace to reach more customers without spending too much time setting up an account. Walmart is making the transition process simple, especially since inventory and payment are handled through Shopify.
The future of in-store retail is still shaky due to the pandemic. Through Shopify, Walmart sellers can set up an account quickly and start to reach new customers. The idea is to foster more growth and competition within retail. No doubt Walmart will benefit hugely by increasing its online assortment and revenue through ads and transaction fees.
This can also be a good time for brands that mostly relied on in-person sales before the pandemic to switch over to ecommerce. With decreased or nonexistent foot traffic, becoming an online marketplace seller can expand a brand's customer base. Setting up a Shopify account is quick and affordable, and if the brand passes Walmart's application, it can take advantage of two channels at once.
From our research into the landscape of ecommerce after COVID-19, we know many companies have increased their efforts in selling online. The Walmart Marketplace could be a great channel for small businesses to find more customers in this difficult time.
If you wish to read the full market research, you can download it here.
Are there any challenges?
All in all, the Walmart Marketplace promises to be a strong source of revenue for many online stores. Selling on Walmart could be worth it especially during this time to connect with a wider audience. As long as you have access to a Shopify account, there really aren't any huge downsides from a seller's perspective.
Looking at it from a brand protection angle, it will probably be up to Shopify to take down sellers that use stolen IP. Walmart has a reporting form, but it could pass responsibility to Shopify since that's where the seller would be based.