Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

How Wal-Mart Stores, Inc. (WMT)’s e-Commerce Potential Stacks Up

Page 1 of 2

Last week, I wrote an article outlining the steps Wal-Mart (NYSE:WMT) is taking to improve e-commerce sales. A commenter pointed out that comparing Wal-Mart Stores, Inc. (NYSE:WMT)’s online sales to a company like, Inc. (NASDAQ:AMZN) is simply not the correct analysis. While I believe Amazon is most likely Wal-Mart’s biggest threat, more so than other big-box retailers are, I’ll analyze what other brick-and-mortar retailers have done in the online space, and their plans going forward to compete with Wal-Mart, as well as Amazon.

Wal-Mart Stores, Inc (NYSE:WMT)

First, what’s up with Wal-Mart Stores, Inc. (NYSE:WMT)?

Wal-Mart Stores, Inc. (NYSE:WMT) did not disclose e-commerce sales for 2012, but had estimated online revenues of $4.1 billion in 2010 and $4.9 billion in 2011. As a percentage of total sales, those numbers represent and just under 1% and about 1.1% respectively.

If in 2012, the company grew online sales significantly faster than total e-commerce economy, at say 30%, a generous estimate says the company sold about $6.4 billion in merchandise through its online store. (This estimate is within reason as The Top 500 list of online retailers put Wal-Mart’s 2012 e-commerce sales below Apple, which sold $6.66 billion in its online store during 2012.) With $466 billion in merchandise sales last year, that’s still only 1.4% of total sales.

There’s likely a reason Wal-Mart Stores, Inc. (NYSE:WMT) chose not to disclose its digital sales numbers. If they were good, the company would want to show them off.

The good news is the company’s plan to increase e-commerce sales to $9 billion in 2013 appear to be on track. In the Wal-Mart Stores, Inc. (NYSE:WMT)’s fourth quarter earnings call at the end of February, e-Commerce President Neil Ashe iterated, “The investments we’ve made so far in our e-commerce business are delivering. Revenue growth is accelerating and ahead of our plans.” With analysts estimated Wal-Mart’s 2013 revenue at $492.4 billion, e-commerce could represent over 1.8% of total sales if the company hits its target (NYSE:TGT)s.

How does the (real) competition stack up?

In order to make an apples-to-apples assessment of Wal-Mart Stores, Inc. (NYSE:WMT)’s current status in the e-commerce environment, I’ll compare it to Target Corporation (NYSE:TGT) and Costco Wholesale Corporation (NASDAQ:COST).

Page 1 of 2