Walmart Widens Assortments With SmileDirectClub's Products
Zacks Investment Research | Jan 06, 2020 09:37PM ET
Walmart Inc. (NYSE:WMT) is committed toward widening its assortment range to better cater to consumers’ needs. To this end, the world’s largest retailer has been undertaking constant moves, including alliances and buyouts, evident from its latest deal with SmileDirectClub (NASDAQ:SDC) for a unique line of oral care products.
SmileDirectClub has unveiled a set of superior yet reasonably-priced oral care products solely at Walmart’s U.S. stores as well as its website, Walmart.com. These products include a state-of-the-art electric toothbrush, as well as bright on, which is a fine teeth whitening system. Apart from this, SmileDirectClub will offer other products at Walmart, including toothpaste for whitening and sensitivity, water flosser and smile spa, a cleaner that sanitizes toothbrush heads, dentures and retainers, among others.
Apparently, this deal will make SmileDirectClub consumers’ the first oral care product resource in the mass retail space. This move reinforces Walmart’s solid focus on enhancing assortments to boost sales. In fact, there were rumors that the company is planning to enhance its alcohol range by providing hyperlocal craft beers, high-end wines and top-shelf spirits to its liquor options.
Sales-Driving Initiatives in Place
Clearly, Walmart is exploiting every nook and cranny to augment store and online sales to stay firm amid the rising competition from Amazon (NASDAQ:AMZN) . The big-box retailer has been on track with store remodeling to upgrade them with advanced in-store and digital innovation. Walmart is also gaining from its compelling pricing strategy. The company has been undertaking e-commerce initiatives, including buyouts and alliances, and improving delivery and payment systems. The company’s contracts with Green Dot and Microsoft (NASDAQ:MSFT) ; buyouts of ShoeBuy, Moosejaw, Bonobos, ModCloth and Jet.com; and deal with Lord and Taylor, among others, are noteworthy. Further, buyout of a 77% stake in Flipkart is likely to bolster Walmart’s e-commerce sales.
Apart from this, the company is making aggressive efforts to expand in the booming online grocery space, which has long been a major contributor to its e-commerce sales. In connection with this, the company launched Walmart InHome Delivery across three markets and same-day pickup at all of Mexico’s Sam’s Club locations. Prior to this, the company joined hands with Point Pickup, Skipcart, AxleHire and Roadie. Other than this, deals with Postmates and DoorDash along with the acquisition of Parcel reflect the company’s focus on enhancing grocery sales.
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Backed by such endeavors, U.S. e-commerce sales surged 41% in the third quarter of fiscal 2020. E-commerce sales improved on the back of strength in online grocery. These factors keep management optimistic about achieving 35% of U.S. e-commerce sales growth in fiscal 2020. Also, these upsides are likely to bolster Walmart’s U.S. sales and boost investors’ sentiments. Markedly, this Zacks Rank #2 (Buy) stock has rallied 26.1% in a year, outpacing the Original post
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