Half a trillion dollars. That barely comprehensible number has entered the sights of the world's largest retailer.
Walmart recently reported net sales of more than $466 billion for its fiscal year 2013, which ended January 31. At its current growth rate of 5 percent, the company still won't reach a half-trillion next year.
That sluggish curve is clearly one reason the Arkansas-based company has started devoting so much time and attention to its Silicon Valley operations. Headquartered just south of San Francisco, Walmart.com is heavily recruiting tech talent. And in some ways its investment is starting to pay off. The company's wide-ranging experiments in "clicks-and-mortar" retail have put it at the forefront of merging online, offline and mobile commerce.
Online is also starting to contribute to the bottom line. In a conference call with analysts, Walmart's president and CEO of global e-commerce, Neil Ashe, boasted that the company's online strategy was working.
"The investments we’ve made so far in our e-commerce business are delivering," Ashe said. "Revenue growth is accelerating and ahead of our plans."
As others have pointed out, "delivering" in this case would likely mean Walmart is on track to meet or exceed the $9 billion online sales goal Ashe set at Walmart's shareholders' meeting in October. (Walmart doesn't break out its online sales figures separately.)
In many contexts, that's a lot of money. But not in the context of $466 billion. Walmart undoubtedly looks at that $9 billion and sees nowhere to go but up. The other figure they're looking at is $61 billion: Amazon's net sales for its most recent fiscal year. According to the most recent Internet Retailer estimates, Staples is the only other company that has exceeded $9 billion in online sales. Amazon so vastly outstrips all other comers, including Walmart's online operation, that it in some ways appears to have the market locked. But if anyone can challenge Jeff Bezos' battering ram, it's likely the only other company besides Exxon that can say "a half-trillion dollars" with a straight face.
