Photo: Walmart
Walmart using a well-proven formula to attract B2B customers
Walmart last week unveiled a new program, Walmart Business, to serve the needs of small and medium-size businesses (SMBs) and nonprofit organizations.
The retailing giant has launched a new website featuring the products that its business customers need at the everyday low prices Walmart is known for.
Ashley Hubka, senior vice president & general manager of Walmart Business, on a company blog writes, “Our focus is to remove complexity in purchasing, lower costs and give our customers more opportunities to serve their customers and communities. Walmart Business is built to leverage the very best of Walmart — our unmatched operating scale, our proximity within 10 miles of 90 percent of the U.S. population and the very best of our eCommerce, fulfillment and delivery technologies.”
Walmart developed its program after months working with SMBs and nonprofits. Its business customers have access to more than 100,000 curated items on a site that has been built for easy navigation through categories including office supplies and furniture, food and beverage, restroom, electronics, classroom and facility needs.
Business customers will be able to add up to five users to an account, who will have the ability to share payment information, order history and take advantage of group purchasing power. Customers who qualify will be able to enroll as tax exempt and have taxes removed during the checkout process.
The retailer also offers an upgrade to the program in the form of Walmart Business+. For $98 a year, plus tax, business customers receive free standard shipping on orders with no minimum purchase. They can also choose free pickup or delivery from local stores with a minimum purchase of $35. Business customers will receive two percent rewards on orders of $250 or more and save five percent on eligible items set for regular delivery.
“We are committed to listening to SMB and nonprofit customers to help them address the challenges they face today, and the ever-changing challenges that come with running an organization,” writes Ms. Hubka. “We are excited to help our customers save time, money and hassle.”
Discussion Questions
DISCUSSION QUESTIONS: What is your assessment of the opportunities that Walmart faces with its B2B initiative? How do you expect Walmart Business+ to stock up against other B2B programs offered by other retailers, including Walmart’s Sam’s Club division?
Poll
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Value + proximity is a powerful combination. Amazon is going to experience some very real competition from this program.
This could be great for SMBs and non-profit as everyone is looking to stretch their dollar more than ever. Walmart has buying power and leveraging this to give their B2B customers access to better product at better prices will no doubt be a success.
It will be interesting to see how all the Walmart channels line up against each other and if customers will prefer a curated assortment versus Sam’s Club.
And let’s not forget about Costco — will this Walmart initiative drive more customers away from Costco and into their banners? It’s quite possible.
Walmart will increase its top line and loyalty by offering B2B buyers ease, time savings and cost savings. Walmart Business stands out for its omnichannel convenience, given the abundance of nearby stores compared to rivals.
Totally agree — they’re going toe-to-toe with Costco and Amazon with this model!
Amazon wrote the blueprint for this business. With B2B revenues exceeding $20 billion and targeted to reach $60 billion by 2025, the category is hard to ignore.
I doubt Walmart expects to catch Amazon in this category, but with Walmart’s already efficient infrastructure, there is no reason not to launch a competitive program.
Yes, Amazon should diversify beyond books and Walmart should expand into B2B “artfully,” which they seem to be doing. After all, understanding and leveraging a core competency is a key to long term success. Walmart will charge for a business membership and has priced itself competitively against Sam’s Club. However it remain free for the public. It’s a no-brainer that is more dangerous to Staples than to Walmart.
Plenty of small businesses already rely on Walmart for supply needs, Walmart Business just sweetens the pot.
In the ’80s and ’90s Walmart was feared by small retailers, and for good reason: Mr. Sam was a tough competitor. Over the years, the help Walmart has given communities and SMBs has turned that fear around. Walmart is now considered a reliable resource.
Two advantages Walmart has from Sam’s are the number of locations which should result in faster deliveries and its large, curated selection of products. I believe the Walmart Business program has a very reasonable cost for the benefits it offers and will be popular with both SMBs and nonprofits.
Wamart’s size, scale, operating model, and proximity to SMB customers, especially within 10 miles of 90 percent of the U.S. population, is a value proposition that will be very difficult to compete with. By extending into the B2B space, Walmart has a competitive advantage by leveraging its already significant supply chain capabilities and purchasing power. Walmart can extend substantial value to its loyal SMB customers, who are already shopping with Walmart for their business needs.
This is a win-win scenario for Walmart and the SMB customers. It will be interesting to see how this plays out and what impact, if any, this will have on Walmart’s Sam’s Club division. Walmart’s value proposition of savings, convenience, value, and expanded assortments is a winning combination for the B2B market.
Walmart Business and Business+ are a great way for B2B customers to benefit from easy ordering, convenient delivery and low prices. It will definitely help Walmart to steal market share for big box office supply stores, Amazon and Costco.
B2B is a very lucrative retail segment, and the launch of Walmart Business+ is a smart move for the company and will positively impact small businesses and the communities they serve. Business+ is complementary to its Sam’s Club division, taking its inventory online to remove the physical barrier of businesses accessing the bulk products they need.
Historically, B2B wholesalers have been years behind B2C in innovation, yet its customers seek the same personalized experiences as B2C. Walmart’s continued investment into technology designed to enhance the user experience allows them to better compete with others in the space, such as Amazon and Costco.