Amazon accounts for about 50 percent of U.S. e-commerce sales, and most industry watchers believe that it has no rivals. Few have the resources to go head-to-head with Amazon. The company has deep pockets, and as importantly, had a 'first mover' market advantage as it entered the market over a decade ahead of most established retailers. In comparison, eBay is the second largest U.S. e-commerce platform and has only around 8 percent of the e-commerce market. Walmart, the world’s biggest retailer, weighs in as the third largest e-commerce platform in the U.S. - with a mere 4.6 percent of the online market in 2019. How To Succeed in e-Commerce Having mastered physical retail, Walmart is now trying to rule e-commerce. It’s been a steeper than expected learning curve. For over a decade Walmart struggled to find the secret sauce that would propel them to the head of the e-commerce market. From purchasing e-commerce startup, jet.com in 2016 and buying up digital native fashion brands Bonobos and Mod Cloth, to offering 2-day shipping and 'click and collect' service, Walmart is making serious gains in its e-commerce business with sales up 37 percent in 2019, on top of 40 percent sales growth in 2018. Analysts expect growth to continue at about 30 percent year-on-year. It’s About the Assortment One frontier that Walmart needed to conquer was merchandise assortment. One of the biggest benefits that consumers get when shopping on Amazon is choice. An army of about 1.7 million third party sellers fill up the Amazon website with millions of products. Amazon has the advantage of inventory without the costs of product development. No investment in owning inventory. No shipping costs. The seller assumes all costs. Amazon simply takes a percentage of any merchandise sold on its platform. Walmart has opened up its online store to third party sellers as well. Leveraging Logistics for More Than Package Delivery While sellers can handle their own shipping, Amazon set up a service that can do it for sellers - for a fee, of course. The most popular of Amazon’s seller services is Fulfilled by Amazon (FBA) where a seller can ship their inventory to an Amazon warehouse. When a sale is made, Amazon pulls the merchandise from the warehouse and ships to the customer. The seller benefits from being able to use Amazon’s state-of-the-art logistics platform, as well as much cheaper rates from couriers, thanks to Amazon’s market clout. Walmart has stepped back into the e-commerce arena now armed with its own fulfilment service. Not surprisingly, its called Walmart Fulfilment Service (WFS). The fee-based service is available to select sellers. Just like Amazon’s FBA, WFS offers warehousing, handling and shipping. WFS includes two-day shipping, easy returns, dedicated customer service, and a low-cost, simple fee structure. “WFS” will be noted on the product descriptions on Walmart’s website, indicating that Walmart expects this new service to raise the appeal of products designated with WFS. Unlike Amazon, WFS does not charge a membership fee to sellers. However, beyond seller support, Walmart has surely noticed that Amazon’s fulfilment service has turned into a very profitable, growth business. Analyst Insights “Instead of trying to beat Amazon at its own game, Walmart should focus on solving actual problems for its target demographic.” Katrin Zimmerman, managing director of the Americas, TLGG Consulting “Traditionally, many of Walmart’s customers come from lower income brackets. Finding innovative payment solutions might be a way to retain these customers.” - Sucharita Kodali, retail analyst at Forester. “Walmart must be prepared to constantly improve on what it starts.” For a membership program to work, Walmart must continue to provide enhancements, according to Tim Cambell, director of market insights at Kantar.