WMT Walmart Inc

By Sarah Nassauer 

Walmart Inc. is combining its online and store product-buying teams, as the country's largest retailer seeks to reduce conflict between the units and increase profits at its e-commerce business, whose global sales will approach $50 billion this year.

Previously product manufacturers selling their wares both on Walmart.com and in Walmart's stores had to pitch two separate buying teams. At times, the teams clashed over pricing differences between products online and off, as well as over plans to use stores to facilitate online sales for home delivery, according to people familiar with the situation.

Walmart has long operated with different e-commerce and store teams, with store teams generally based in Arkansas and e-commerce teams in California or New Jersey. It has been slowly integrating the two as the business blends; last year it combined its online and store supply chains and finance teams.

Still, the company has maintained separate chief executives for the U.S. online and store businesses, Marc Lore and John Furner, and the two will stay in those roles under the new structure.

The company is creating six category teams, such as food. consumables, apparel and entertainment. Each team will be led by an executive and will eventually buy every item sold by Walmart in the U.S., according to an internal memo Tuesday morning. The consumable and food groups will begin joint buying immediately, the memo said, while the other buying categories will come together over time.

Walmart has named Chandra Holt its chief merchandising and integration officer for Walmart e-commerce. Previously, Ms. Holt led merchandising for e-commerce at Sam's Club, Walmart's warehouse chain. She will continue to run the online business "while simultaneously working through the process of integrating the teams as each is ready," the memo said.

Ms. Holt and the leaders of the six product category teams will report to Scott McCall, who was named chief merchandising officer earlier this year. Mr. McCall will report jointly to the CEOs of Walmart's U.S. store and ecommerce businesses, a spokesman for the company said.

Integration of online and offline buying teams at Walmart could become a significant part of the company's strategy to build on the success of its online grocery business to fend off Amazon.com Inc. Most of Walmart's roughly 4,700 U.S. locations now offer a service that lets shoppers buy online and pickup orders in store parking lots, and around 1,600 stores offer online grocery delivery.

Walmart wants to expand those online services to include more profitable nongrocery items, executives said in an investor day presentation last week. That could make the services more profitable and give Walmart an additional way to compete with Amazon's ability to deliver many nongrocery items quickly to shopper's doorsteps. At the same time, Walmart aims to add to its assortment online, executives said last week. Under the new structure, merchandisers will be empowered to control the additional selection online and off.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

February 25, 2020 11:03 ET (16:03 GMT)

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