Research Paper Example: Basic Structure of E-Commerce Model

Walmart E-commerce model has been integrated into the organization to complement the organization sales and market reach. The organization has integrated the E-commerce model with the organization supply and logistics system to streamline the delivery of products that have been ordered through electronic systems. The American giant retailer has recently acquired the e-commerce startup Jet.com which has been central to the organization roll out of its e-commerce platform. The Walmart e-commerce platform operates its e-commerce websites Walmart.com and samsclub.com in 11 countries. Through Jet.com and JD.com Walmart can manage all its online sales in its online website Walmart.com and samsclub.com (Johnson, Krista 6). The e-commerce approach has helped Walmart to expand their market and ability to meet the needs of their consumers.

Costs & Investment

Walmart has significantly invested in technology which aims at establishing the organization e-commerce model. Walmart bought Jet.com which is an e-commerce startup at the cost of 3 bullion US dollars in 2016 (Kristensen, Magnus, et al., 2017). Walmart has invested in good technology leadership by putting up together a team of management from diverse fields to improve the integration of the organization e-commerce into organization business model. Jet.com acquisition by Walmart is an initial investment of the organization in e-commerce with the aim of improving the organization position in the e-commerce industry. Walmart has recently increased e-commerce investment in JD.com to supplement the organization growing online transactions. Walmart had previously invested 5% stake in the China-based JD.com which has now been doubled to 10%. Walmart in the future will invest more in warehouses which will increase the efficiency of online sales delivery. Despite the high costs that Walmart will incur to invest in technology and innovation which will support the new e-commerce model the organization will stand to gain significant competitive advantage over the other retailers in the market. Another major investment by Walmart towards its e-commerce business model is the acquisition of the New York-based Parcel Inc. which is the last mile delivery startup which it aims to use to streamline the organization online sales delivery in New York (Martinez et al., 67).

Supply Chain Model

O2O Model

Online to offline model is a new approach to e-commerce which will allow retailers to target potential online consumers and direct them to offline stores for the purchase of goods. The new approach being used by Walmart especially in China seeks to use web-based markets and tools to attract potential consumers in the digital market to participate in the in-person retail consumption. The O2O Model is used by Walmart with the aim of bringing online shoppers into the organization stores an approach that will significantly increase the organization sales and market share amidst the growing competition. Amongst the techniques that Walmart is using to implement its O2O model include; in-store pick up, free shipping centers, web-return centers and the centers for online sales in the organization retail stores especially in New York and China (Zhu, Xiaoming, et al. 191).

Warehousing/ Inventory management

Walmart has built eight e-commerce warehouses which unlike the traditional stores have automated inventory management promoting effective sales delivery to the consumers and in time. A supply chain refers to the approach through which Walmart can deliver its products to the final consumers. Walmart has been increasing its fulfillment centers which aim at catering for its growing e-commerce customers. The growing investment in fulfillment centers will significantly increase the organization ability to deliver goods and services that are purchased by consumers online within the shortest time possible. Fulfillment centers are regional warehouses where the parcels are packaged for delivery to customers (Houde et al., 2017). The creation of the fulfillment centers will reduce the time taken to deliver online purchases to the consumers and will also reduce the cost of transportation. Hence, increasing Walmart profits. Unlike the traditional warehouses which are designed to store pallets and products movable using forklifts from one bay to another, the new e-commerce facilities are highly automated and fine-tuned to handle a large number of small orders for online sales. The new e-commerce delivery facilities will be larger than the traditional distribution centers. The fulfillment facilities to support the new e-commerce model will be more than one million square feet and be able to hold more than 500,000 items unlike the traditional centers for distribution which holds 50000 items at a time. The new fulfillment centers will use both human labor and automated systems such as automated chutes which will be used to move items hence, improving efficiency (Turban, Efraim, et al. 501).

Transportation

Walmart offers its consumers in its e-commerce business model with discounts if they pick up their products in the organization stores. However, the organization recent acquisition of Parcel Inc. in New York shows its commitment to e-commerce and streamlining its delivery system. The Parcel Inc. offers 24/7 delivery services which reduce the delivery time for the organization e-commerce customers (Zentes et al., 399). Walmart has established fulfillment centers at strategic locations which reduce the transportation costs incurred by the organization. Walmart encourages its online customers to pick up their purchases in the most convenient stores through the O2O model which further reduces transportation cost for the organization.

E-commerce encourages more sales for an organization as well as increased market entry by spreading the retail products and services through the internet to the consumers as well as making sales through the internet portal with the support of online money transfers which removes the necessity of over the counter retail sales. Walmart primary objective of investing in E-commerce aims at improving the organization competitive advantage. The acquisition of Jet.com and increased investment in JD.com in China has increased the online presence of Walmart and the ability to provide potential consumers an online platform to buy goods and services. Walmart.com and samsclub.com are major e-commerce sites that Walmart is using to sell its products to potential online consumers. Further, the organization has established e-commerce centers in the organization stores which manage and coordinate e-commerce sales made by the organization (Zentes et al., 418).

E-commerce Site

Functions

E-commerce refers to a business model which leverages technology to sell goods to the consumers. Walmart has been losing in the market due to poor investment in technology like other key retailers in the American market. However, the entry of Walmart in E-commerce has significantly improved the organization sales in the American market amidst increasing expenditure due to the cost incurred by the organization to acquire technology. The increased ownership of mobile phones by the people as well as access to the internet has made many organizations and retailers invest in E-commerce which leverages social media marketing as its approach to reach the consumers. The primary function of e-commerce sites is to provide product information as well as payment and pick up management of the online sales.

Ship to store

The ship to store function of the e-commerce site facilitates the ability of Walmart to ship the online purchases by the online customers to the nearest stores where the customers can pick up their products. The ship to store complements the organization O2O model by enabling online customers to access goods from the nearest stores, but the purchase is made through the organization online platform (Richards, Mason 2016).

Free same day pickup

Walmart is offering same day pick up in the store of products that are purchased online. However, the service is only available in the United States territory. The same day pick up requires just an identification card for identity verification and the orders are available for pick up after 4 hours of placing the order (Richards, Mason 2016).

Free 2-day shipping

Walmart and Jet.com offers free 2 day shipping to online customers for orders that cost 35 dollars and above. This approach aims at reducing competition the organization faces from Amazon which also offers e-commerce sales (Richards, Mason 2016).

Mobile Express Returns

The new mobile express returns allow online purchasers to return goods bought through e-commerce to stores and exchange the goods with the goods that they desire. The mobile express returns have improved the efficiency of the e-commerce model by enabling the consumers to return undesired goods for a refund or exchange with goods that they desire (Yi, Hao 185).

Transactions

E-commerce site enables the consumers to carry payment for online transactions through the Walmart Pay app that has been integrated into the organization 4,600 U.S stores. The Walmart app aims at complementing online sales through reduced hassles and checkout and increasing sales through the organization websites. The Walmart Pay app uses any credit, debit, prepaid and also Walmart gift card which has significantly improved buyers convenient (Yi, Hao 185).

Customer focus/ Mission

The primary focus of the new e-commerce approach adopted by Walmart has the consumers as its major focus by increasing convenience and efficiency for shoppers. The e-commerce model expands the consumer's choice by availing a variety of goods and services. The new model lives up to Walmart mission which is to save consumers money so that they can live better. The approach enables the consumers to easily access the goods they need from the comfort of their homes and at the same time be able to save some money compared to getting the goods in the stores. Walmart primary goal is to make life easy for many busy consumers who are engaged in other activities (Reinhart et al., 1).

Security

The use of Walmart Pay app has increased the security of the consumers purchasing goods through the organization websites. Walmart has many stores across the United States of America with a store approximately 10 miles near to the 90% of the population which makes it easy for the consumers to pick up products bought online. Walmart has introduced the Mobile Express Returns which allows consumers to return defective products and exchange them with products they desire or seek a refund for the same. Further, the automation of the organization fulfillment centers which packages the parcels for the customers leaves no errors that could have been possible in a human controlled process (Reinhart et al., 3).

Works Cited

Houde, Jean-Francois, Peter Newberry, and Katja Seim. Economies of Density in E-Commerce: A Study of Amazons Fulfillment Center Network. No. w23361. National Bureau of Economic Research, 2017.

Hu, Xianwu, Ping-Kuo Chen, and Zhenkai Lou. "Building a forecasting model of customer demand for O2O dual-channel." Applied System Innovation (ICASI), 2017 International Conference on. IEEE, 2017.

Johnson, Krista. "E-Commerce Industry Spotlight." Marriott Student Review 1.1 (2017): 6.

Kristensen, Magnus, et al. "COMPANY SYNOPSIS FOR: AMAZON. COM, INC." (2017).

Martinez, Ascension Barroso, Ramon Sanguino Galvan, and Samsul Alam. "Financial Analysis of Retail Business Organization: A Case of Wal-Mart Stores, Inc." Nile Journal of Business and Economics 3.5 (2017): 67-89.

Reinhart, Laura, and Mary Kate Naatus. "Groupon, m-commerce and mobile apps: Perceptions of small business owners and consumers." Business & Entrepreneurship Journal 6.1...