Shownotes
This Omni Talk Retail Fast Five segment explores Walmart's decision to open Walmart.com to shoppers in Mexico and what it means for the future of global marketplaces.
Chris Walton and Ben Miller discuss cross-border commerce, international marketplace growth, pricing transparency, and why Walmart continues to make bold investments in long-term growth opportunities.
The conversation also examines operational challenges, customer experience concerns, and how Walmart's marketplace ambitions compare to other global retail giants.
⏩ Tune in for the full episode here: https://youtu.be/toy5NmyXau4
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Transcripts
Walmart expands Walmart.com access to shoppers in Mexico.
Speaker A:According to the Retail Insight Network, the rollout enables customers in Mexico to buy goods across various categories including clothing, home goods and electronics directly through Walmart.com Orders placed will be processed through Walmart's existing fulfillment network in the US with international carriers handling shipping and customs clearance.
Speaker A:The company said that estimated duties, taxes and fees will be worked out and shown at checkout so.
Speaker A:So customers can see the full cost before finalizing their purchases.
Speaker A:Walmart also indicated that it intends to roll out international shipping to other markets as well going forward.
Speaker B:Oh yes.
Speaker A:Scale of 1 to 10, how much do you like the expansion of Walmart.com into Mexico?
Speaker B:Yeah, so it's a.
Speaker B:It's a straight 10 for.
Speaker B:Is it the principle and the direction.
Speaker A:But I.
Speaker A:For the boldness.
Speaker B:For the boldness, yeah.
Speaker B:But also the execution is about a six at the moment.
Speaker B:So let me explain for why there's really clear momentum in cross border marketplaces at the moment.
Speaker B:It was one of the really interesting themes that we covered at Shop Talk Europe.
Speaker B:We had Kaufland Pod de Svarts Group, that's US biggest retailer announcing they're expanding their marketplace across Europe at the show.
Speaker B:Walmart were there and I'll come back to what they were doing at.
Speaker B:At the European show and you see they were talking about how the latest generation of tools and how AI is helping to remove some of the historic barriers for cross border.
Speaker B:Whether that's translations or.
Speaker B:Or dealing with.
Speaker B:With the tariffs.
Speaker B:So it's a big dream for Walmart.
Speaker B:You've talked about this on the show.
Speaker B:I've heard you talk about it before.
Speaker B:The marketplace is such an important part of Walmart's flywheel of growth at the moment.
Speaker B:And by going to Mexico.
Speaker B:Mexico's a country of 130 million people so fantastic.
Speaker B:Where they already have incredible brand presence, incredible reputation.
Speaker B:So amazing.
Speaker B:Yeah.
Speaker B:Way to go to drive that, drive that flywheel.
Speaker B:The bit that.
Speaker B:And I think this is really important.
Speaker B:This is really important for everyone to pay attention to.
Speaker B:They're driving that expansion by the Walmart.com marketplace then the US marketplace pushing that in Mexico.
Speaker B:Walmart to make it already has a marketplace but they're saying actually we want to take the dot com marketplace.
Speaker B:So it is that global marketplace idea which Amazon already has.
Speaker B:And the Walmart press release just has this line at the end.
Speaker B:It's slightly sinister if you're a competitor expands the plans to expand to a digital market in the future.
Speaker B:I mean that the gauntlet fairly laid down, that's the 10.
Speaker B:I actually spent some time with the Walmart Marketplace team last week in Barcelona.
Speaker B:They're expanding in Europe and it's a sourcing hub.
Speaker B:Hub, you know, so they're opening opportunities.
Speaker B:But this is something that vendors really need to clearly pay attention to.
Speaker B:You know, you might have a 1P relationship already with Mexico and now there's this 3P relationship to the marketplace.
Speaker B:So which Walmart bit of Walmart you're dealing with?
Speaker B:So vendors need to think really carefully about that.
Speaker B:And for consumers the import bit will add significant costs, right?
Speaker B:Yeah.
Speaker B:Depending on your category.
Speaker B:Import from the U.S. into Mexico is anywhere from, from 0 to 35%.
Speaker B:That's dangerous for consumers to see these extra charges added on.
Speaker B:It's dangerous for Walmart and their price leadership proposition to suddenly hit it be.
Speaker B:So they've got to be, they've got to be really mindful of that.
Speaker B:I don't love the cx, Chris.
Speaker B:The fact that you've got a Mexican website for Walmart and then you've got to go on dot com, it's.
Speaker B:That's difficult, that's not seamless.
Speaker B:And then when it comes to seamless I, the bit that is always difficult with cross border and marketplaces is returns, especially if they're not going through the main Mexican business and, and Walmart, I've not seen them talk about that.
Speaker B:So there's some friction and that friction is hard, my friend, when you're up against Ricardo Libre who are really good at what they do.
Speaker B:So they are the dominant marketplace in Mexico.
Speaker B:They've got the logistics, they've got the network, they've got the returns, they've got the price point.
Speaker B:So look, I get it, there'll be work to do to make it a success.
Speaker B:Can Walmart got it in them to make it a success?
Speaker B:Yes, but it's not a home run from day one in my eyes.
Speaker A:Yeah, There are operational issues that you have to think through and you have to solve.
Speaker A:And I agree the dissonance with the two websites is probably the thing that drives me the crazy the most.
Speaker A:The part about the price transparency and the impact on price perception.
Speaker A:I can even remember back to my days when Target was experimenting with international expansion and like I was never a big, that was never a big concern of mine.
Speaker A:I think if you're transparent at checkout and in terms of where and maybe that's also why you have a separate website because then it kind of filters out that noise too.
Speaker A:Now that I'm saying this out loud, I think it's pretty obvious when you say like, you know, duty, I'm making this up, but duty charges, you know, $100.
Speaker A:Like, you know, that's pretty, you know, that can be shown pretty clearly and you could make that even more big and pronounced than you would in your typical, you know, checkout experience if you wanted to.
Speaker B:So like, unless let's give credit to Walmart on that point, Chris, because they are, they are calculating the exact duty and import charges and displaying them.
Speaker A:Right.
Speaker B:The standard model is that you'd almost pay a sort of a retainer, a deposit that then gets actually worked out when the calculations are done.
Speaker B:But Walmart have been able to build the tech to do it in the moment on the website.
Speaker B:So that's a golf cap to that one.
Speaker A:Right.
Speaker A:And so when you think about a marketplace transaction in particular like Walmart, you're not holding the inventory, your price, your reg price is going to be consistent with your low price promise.
Speaker A:And then the consumer is just going to understand in theory that, you know, there are these charges added on top and it's going to be shipped from a marketplace vendor.
Speaker A:So it's on the customer ultimately if they want to buy it or not.
Speaker A:And Walmart doesn't lose anything.
Speaker A:So for me, I think it's a 10 out of 10 too.
Speaker A:I'm a little less concerned about the operational dynamics, I think, than you are, Ben, and I think it goes back to something actually I shared last week on social media, which was, you know, my big takeaway from Shop Talk Europe.
Speaker A:In the interview I had with Peter Wood of All Saints is he said the job of the CFO is to ask what you kind of just said, which is to ask what can go wrong?
Speaker A:Right?
Speaker A:And how do we ameliorate what can go wrong?
Speaker A:But the job of the CEO is to ask what can go right.
Speaker A:And, and that is what I think Walmart has done a tremendous job doing, or that's the mindset they've had.
Speaker A:They've done a tremendous job of keeping over the past eight to ten years or so is saying what can go right and let's try to go after it until someone proves that we can't because the opportunity is substantial.
Speaker A:You talked about the size of the Mexican market.
Speaker A:You talk about a global marketplace and what that affords, particularly in the way of, of retail media too.
Speaker A:They're also just a week before rolling out Walmart plus to Canada.
Speaker A:Why?
Speaker A:Because these are software solutions ultimately at the end of the day, and the margin on a software, on software is much higher than the margins that they're going to get from selling more products.
Speaker A:So, like, it's just a smart move that scales so easily if you can get knock all the pins out of the way that are potential potentially keeping you from doing it.
Speaker A:But that's what I love about Walmart's leadership and I hope they continue to do that.
Speaker A:And I think more retailers would be smart to take a page out of Peter Wood's book and Walmart's book too.