Walmart Inc. (WMT) Goldman Sachs Global Retailing Conference – (Transcript)

Walmart Inc. (NYSE:WMT) Goldman Sachs Global Retailing Conference Call September 4, 2024 11:00 AM ET

Company Participants

Manish Joneja – Senior Vice President, Walmart US Marketplace and WFS

Conference Call Participants

Kate McShane – Goldman Sachs

Kate McShane

Okay. Good morning, everyone. Thank you for joining us. It’s my pleasure to introduce Walmart and to moderate this fireside chat. We’re very excited to have with us Manish Joneja, today, Senior Vice President of Walmart US Marketplace and Walmart Fulfillment Services. Manish joined Walmart in 2022, having previously served as the CEO of BARK. And prior to that, a leader at Amazon in the worldwide operations division and at eBay.

Manish, thank you so much for joining us today.

Manish Joneja

Thanks for having me.

Kate McShane

Before we start, I just wanted to give two seconds, a thanks for coming today because I do think when it comes to the alternative revenue streams that Walmart has talked about now for the last, I mean, for a while, but in earnest, really, I feel like the April Analyst Day of 2023 was a real turning point in terms of people understanding what this second P&L is for Walmart. So I appreciate that we can drill down now on some of these businesses.

And so we appreciate your time and walking us through it.

Manish Joneja

Thank you.

Question-and-Answer Session

Q – Kate McShane

So maybe to start, it would help, I think, to learn a little bit more about your background and what your current role is at Walmart?

Manish Joneja

Sure. Hey, everybody. My name is Manish Joneja. I’ll start with the disclaimer. I’m super passionate about e-commerce and marketplace. I’ve been told, going to talk about passion subjects, I speak fast and my accent kicks in. So if somebody wants to stop me, please stop me. I started my career as an engineer in the Y2K days when the world was ending, thankfully it did not. And for the first 10 years, I’ve focused on omnichannel commerce. So helping different brands like Nordstrom, Victoria Secret, Polo, Gap, also Microsoft, connect offline and online consumers. And then for the next 10 years, I’ve focused on marketplaces and global growth, so with eBay and with Amazon. Then somewhere on the line, I fell in love with dogs. So I decided to take on the opportunity for the dog company and took them public and then decided to, not move to New York and stay in Seattle and other areas, West Coast. So we came across Walmart, met the leaders, love the humility and the humble nature the leaders have, understanding the opportunities ahead of them, thinking about big thing opportunities, what’s right for the customer, customer-obsession and decided to take over this role. So I’m leading the marketplace business as well as fulfillment services business, super excited to be here.

Kate McShane

That’s great. Just given the marketplace that Walmart has changed a lot over the last few years, can you maybe walk us through a quick history of evolution of marketplace and where we are today?

Manish Joneja

Yes. So I really believe that Walmart marketplace is one of the biggest opportunities in the retail landscape today. And I’ll tell you why. We are just a few years old. So even though we set up marketplaces in probably 2009, we opened up the marketplace to more sellers and then open marketplace to more countries about three years ago. That includes Walmart fulfillment services building all the ancillary efforts that we’ve been working on. So when you think about a marketplace that’s so young in its stage that is seller obsessed as well as customer obsessed, the only path forward is growth. And we’ve seen that happen across our customer base by unlocking new customer cohorts, by unlocking new seller segments that are bringing on board new assortment, that’s been our journey so far. And as looking in the future, we see more and more of that happening, especially as we think about growing Walmart fulfillment services, Walmart ads when I think about it, data and our omnichannel efforts.

Kate McShane

So when you look across the industry, what are some of the key changes you’ve seen in the retail marketplaces over time? What is Walmart doing to differentiate itself amongst the other marketplaces? And how do you position yourself as a preferred partner to help navigate this?

Manish Joneja

Yes. So the first would be changing customer perception. Customers are now more and more open to marketplaces. They are open to that wider assortment. You might discover new products or you might have the same product in different flavors, different styles, different colors that you discover marketplaces. The key difference for a successful marketplace and not so successful will be can you keep your promises, right? So that’s what people are looking at is, do I have wider assortment, and do we bring the convenience to the table. And that’s what something we’re building and we are good at. Second is it’s becoming increasing the omnichannel, right? So when you’re a customer, there’s no longer, I only want to shop at store, I only want to shop online, you only want to work with 1P merchandise, you want that wide assortment that you can buy at the convenience that you become used to. We’ve been building our retail business for decades, and we are basically really good at thinking about fulfillment solutions and everything else that we build to fire up in the retail marketplace as such. So we’re seeing that increased omnichannel penetration and sellers wanting to be successful. So I’ll give you an example that is unique to us. So last year, we fired up 3P sellers with tires. So those of you who have cars, will get tires installed. I haven’t been able to do it myself. I think it’s super complex. What we’ve done is, we fired up the entire 3P assortment online, connected them to over 2,300 Walmart Supercenters that have full-service auto care centers. So now what you can do is, third-party merchandise powered by first-party capabilities. So whatever we built in the past 60 years, all those LEGO blocks, it’s stacking up on top to fire this market list of sellers. So that’s an omni-channel advantage. Second would be returns. So you can walk into more than 4,000 Walmart stores for most of the assortment and return the item right there. No need to pack or do anything else. That’s a unique advantage that we can offer. Another one I think about is store penetration. So our shelves are the most valuable shelves in retail. We’ve had a lot of sellers come in with the merchandise that have performed really well, worked with our merchants and put them in stores. So there is a store injection. Fourth, important part becomes is we are working on a platform that’s equitable. It’s a level playing field. We work on behalf of the customer. It does not matter whether we own the merchandise or a seller owns the merchandise. As long as the right merchandise, we sell that merchandise and you follow that up. So it’s a fair level playing field for all of the sellers. And the third point of the question becomes like change. Marketplaces are evolving. Commerce is evolving. We’re becoming content commerce, social commerce, no longer about listing an item one and hoping it sells. It’s about local stores that will get fired up essentially with these assortments. How do you connect that with the Walmart traffic? So we also announced local finds in Atlanta and Dallas, where we have florist basically going to list their products on our platform and drive that, right? So that navigation of evolution change like sellers want to work with people who have navigated such complex changes before and that’s what we’ve been really good at. We lead it.

Kate McShane

That’s great. I guess the brick-and-mortar piece of it really does make a big difference.

Manish Joneja

Huge.

Kate McShane

So when you think about marketplace and how quick it’s growing, I think, there was 30% growth each of the last four quarters. Can you talk about what you prioritize in terms of your strategic initiatives? And what are the bigger drivers of that 30% growth right now?

Manish Joneja

We’ve delivered 30% growth four quarters in a row. And e-commerce grew more than 20%. That’s the last report that we did. What we obsess about is what customers want, right? There’s no arbitrary SKU number or seller number when it comes like, hey, it should be 1 billion SKUs or 10 million SKUs. You might have 1 trillion items on site. They not be good enough, so it won’t sell. So if we obsess over is having the right inventory at the right price, with the right experience, the right content. So if you’re able to find those, that’s what you obsess about. So you’ve kind of seen in our assortment growth is very precise growth in terms of getting the inventory that people want and going after that. So we have teams that go and do inventory acquisition. But then if you’re a seller with long tail inventory who wants to come on board, we welcome you as well, provided you pass our checks and balances, right? That’s how we focus on inventory and assortment growth. It’s all about what customers want. So one example would be StockX. We announced this today morning, right? So we announced that we — in last week Seller Summit. We did Seller Summit in San Francisco. We talked about category growth. We talked about premium, beauty that we grew, that’s marketplace. You can find the brands that you love on marketplace and experience that you love because you don’t shop for premium beauty the way you shop for household products, it’s different experience. And also collectibles. We also announced Resold. So collectibles, today morning, new announced StockX is going to be using us as the first third-party marketplace list of products. We bought these from them. So you can actually get some cool kicks out of walmart.com that you typically never got, right? The play is to get that wider assortment from all the partners, with more examples like StockX where you see more and more brands coming on board, serving our customers, which brings a wide and deep assortment. Our North Star is and I could say this is like we want to serve our customers what they need, want and love. There’s stuff that you buy that you want, the stuff that you need, but the stuff that you want to discover. You bring all these different brands on board, so you can actually come and discover the items that you will resonate with you. On the seller side, it’s about fair playing field, low-cost, profitable platform. So you want sellers to come on board, we make it easy for them to come on board, but we also want them to make money. They should be profitable business with us in a partnership model. So that’s what we’re working with on the seller side and think about like buy side and sell side, both on the customer and seller side. And what we’ve heard from sellers is they look at us as a win-win platform, not a win-lose platform. I’ll tell you what that means. First, they look at us as a smart path for growth. We already have the customer reach. There’s hundreds of millions of customers that buy from us every week in stores and online. So they have the eyeballs. They’re looking for the products that our sellers are bringing on board, right? That’s one. Second is, we now made it easy for the sellers to sell multi-country. So we are present like Mexico, Canada, US and Chile, where the marketplaces exist. We now made it easy that it’s more like welcome to Walmart. We list once. We’ll take your item, we’ll translate it. We’ll help you list and sell in other places, including from Walmart fulfillment services to power that for you. That makes it super easy for you versus think about listing at four different times and figuring out what your price should be, you just manage one listing, and that’s how you actually go and translate to other countries. That’s really bottom one. And we know winning season. So last holiday season and from last year onwards, Walmart+ event, holiday events, all these events were predominantly run by sellers. That’s where the inventory was. And that was really a cool thing to see such sellers win and sustain momentum, right? So that’s how our sellers view us. And we’re building what I call more than a marketplace, it’s marketplace about listing items. But think a lot of connecting dots between marketplace fulfillment ads and omnichannel. And I talked about the tires example, the returns example. We happen to be the largest omnichannel retailer and we’ve done this before. And that’s what we are unlocking for all our sellers and customers as they think about creating compelling value proposition for both of them. It’s always about working backwards. I think part of the question was about 1P, 3P. We always work back from the customer. We are agnostic to 1P and 3P. When I say we, not just me, the entire company, including our awesome merchants to make sure we surface the best product and serve the best product to our customers.

Kate McShane

And within that, I think, it’s pretty clear the value that you’re providing for the sellers, what the sellers are doing for your customers? Is it wrong to ask or to think about the process by which you vet sellers? Is that still very important? And additionally the 1P versus 3P experience for the shopper. I think in other examples, maybe you’ve noticed a difference. How are you making that a little bit more uniform?

Manish Joneja

Yes. So we always — our sellers have to pass a bar for them to be able to list items. So I talked about Resold, for example, right? There’s a vetting process that has to be done for them to be able to list items. You want trust. The trust for us is paramount. We’ve earned trust from our customers for the past six decades. We want to make sure we maintain that trust. The trust is the reason people have started searching for wider assortment on our site. They use to search for it, didn’t find it, but now that we have the assortment that’s where they buy. So our sellers have not just to pass the bar when they come in, but we have life cycle risk management for our sellers to make sure we can differentiate between sellers and bad actors. And there’s a daily process like an hourly and real-time process that we run on that. On the second part, which I was talking about was experience for our customer, right? So think of this, I was talking to somebody about this was when you go to a Walmart store, you go and talk to a store associate or a store manager to find the items that you want like, let’s say, I want a TV, like that’s a region, how did narrow down based on your purchasing expectations. Search is a store associate for web for us. So it always works backwards from a customer intent. It does not look at 1P or 3P. So we agnostic that. So everything that we do is all about obsessing what customers and making sure the right customer, the right item wins, that’s how we operate on. So if you search for, let’s say, a Samsung TV, I’m making it up, right, or restore item, we’ll surface for you the item that matches your intent, that matches the speed expectation and the quality expectation. It’s irrelevant whether it’s 1P or 3P.

Kate McShane

You mentioned the Marketplace Seller Summit last week and there. For those of you that haven’t seen it, there’s a press release on walmart.com. It’s a laundry list. It’s a very intense list of things that you are introducing and some of which you talked to before. But how are you thinking about category expansion in general when it comes to Walmart marketplace. How much is maybe too much? How much is too little? How do you know when is the right time to roll some of these initiatives out?

Manish Joneja

So everything we do with respect to our expansion plan is based on our customer demand. So we launched Premium Beauty. So you can find COSRX and other elements now, brands on the platform that you can buy on Walmart. We launched Resold, which is quality goods that come at a lower price. So I have twin boys, they’re about eight years old. I bought new iPads for them, which was not a wise decision. They probably broke it within a few weeks. Now I can actually buy similar quality of goods because they don’t care about the processing speed of the iPad. They care about having an iPad being able to finish their homework and everything else in that. I can bite for half the price on Walmart and use other half to possibly buy them a switch or something else, right? So we’re providing that option to our customers. So what Walmart Marketplace does, it gives you a choice of making a decision that did not exist before. And that’s very important for us. Same thing collectibles. I talked about StockX. But you can buy collectible cards. So people have been buying collectibles on Walmart stores for decades. You can buy your cards, you can buy license merchandise. Now that’s online. And we’re also launching a capability to think about preordering collectibles before they come out. So you can place an order before the item is listed essentially in stock and you can get that delivered once the item in stock. We’re looking we’re very careful about the planning of these feature sets so that we can actually meet our customer demand. Now I think about launching speed and the volume. So since we are still new, technologies has evolved in the past 15 years to an extent where I can do in one year, what I could have done in 10 years, 15 years ago, right? So you’re ramping up really rapidly to make sure we can short-circuit the entire thing and give our sellers and customers what they want much faster. And that’s working out really well. It’s some of the key functions of why we are able to hit those numbers.

Kate McShane

And you mentioned before the interplay of marketplace with other businesses. And there are probably some sellers who can’t or won’t sell in marketplace until you’re able to maybe handle their fulfillment. So can you maybe walk us through the relationship between Walmart marketplace and Walmart fulfillment services? And then even the interplay for some of the other businesses like Walmart connect.

Manish Joneja

Yes. So think about fulfillment as one of the most challenging aspects of running a business. It is not easy to ship product from Asia or production factories to US and fulfill it. We are really good at it. We’ve been doing it for six decades. We have all these LEGO blocks that we built that we are now extending to our customers. So when I say it’s more than a marketplace, we want our sellers to come on board, list items, fulfill the item and then basically sell the items for sponsored search they want to. They have their option. It just makes it easy for them because then they can focus on the customer or they can focus on product development. So when you build all those assets for our seller, the feedback we received is that helps them focus on the customer product more. Now as we do that, we see growth. So I’ll give you an example. Our sellers who use Walmart fulfillment services on average, sometimes see 50% plus conversion uplift. Two out of three sellers are right now Walmart fulfillment services. That’s how these are tied together, so our customers can operate better. Another example of that would be OPD, online pickup delivery. If you bought from Walmart store, you would have experienced that we can deliver in hour. That’s the capability that we build that has been awesome for our customers, to be able to buy grocery, fresh items, general merchandise that can get delivered at a much faster rate than from anywhere else. We had that capability and what we heard a lot of neighborhood stores ask is can we get that capability. So we announced at the Seller Summit that 1-800-Flowers is the first partner that we’re onboarding in Austin and Dallas, where we can have florist list their items, just like a regular seller. So when you search, you can see a neighborhood store, and you can get delivered through our own Spark drivers which are our own network. That gives tremendous opportunity to this entirely new assortment. That’s not the same day delivery, it’s like a few hours delivery. And that helps them win the small neighborhood stores and it helps our customers win.

Kate McShane

And when it does come to fulfillment. Can you walk us through the build-out, including local multichannel and then even cross-border fulfillment. Is there still a build-out phase of this?

Manish Joneja

We will continue building out. So Walmart fulfillment services, think about, like I said, it’s the most challenging aspect is fulfillment. We’re really good at it. So what we did was, WFS is a low cost end-to-end solution that we’ve enabled for our sellers on the backbone of the world-class supply chain that we have. We have an amazing supply chain and transportation team that’s been doing this for a long time. What we’ve done is we made it extensible to our customers. It’s on average 15% cheaper than our competition. We see 50% conversion uplift when you are enrolled in that because customers that creates trust for the customers. And about 40% of our sellers are adopted into it. So we see more and more sellers increasingly adopt, especially the top sellers that come on board. One of the things that our sellers have asked for us is can we use those services for known Walmart orders. My own business, direct-to-consumer site or non-site orders. So last week, we announced that it’s going to happen this year, next month onwards, we’re going to actually allow our sellers to use the Walmart fulfillment services to do brown box fulfillment, which means we’ll accept orders from not Walmart, they don’t have to worry about it, and we fulfill. So you’re seeing sellers move their inventory into fulfillment centers so they can actually go and fulfill their orders. Second thing we asked, our sellers asked us was, can you pick up the inventory from production factories like in China for example Asia? So we fired up three ports. There will be more coming, where now, on your behalf, you can pick up the inventory from Asia, we can cross talk it directly to our fulfillment centers. We know where the peak demand is. So we can move and mirror the inventory around and then fulfill it. So what that does is it just makes it easy for a seller to focus again on the customers more than anybody else. And the local find example is another example, right? So when you think about take a step back is, fulfillment is a challenge. How do we use the assets that we built to enable growth for our sellers to power the inventory that our customers want. So that’s creating the width and the depth of inventory if we can do that for our sellers and that’s we’ve received really positive feedback, but again we’ll continue to build out and bolster our capabilities.

Kate McShane

And then when it comes to the value proposition, how are you using marketplace to reinforce Walmart’s value proposition and everyday low prices through this broader assortment?

Manish Joneja

So Walmart is in a category of its own. We are omnichannel more than marketplace. So when you think about what our customers have come to trust us is for assortment, for value, for convenience. What Walmart marketplace does is it adds hundreds of millions of products that you didn’t have in a store or online before. So it extends the assortment. And as a customer, now I can find items that I had no idea about, right? So I bought some restored items for my wife, for example. I bought this there’s a seller who came on the platform and they sell amazing jewelry and it ranges from $15 to $50. And they started at, I think, $50,000 about four or five years ago. They were doing $20 million this year, right? So it’s because we could actually expose the traffic to this awesome inventory that the seller brought, that our customers are searching for. So you get the wide assortment of you’re looking for a collectible item? You’re looking for a sneaker like you said, you’re looking for Resold for your kids, if you want to do and focus on that, looking back to school, back to college or looking for grocery. You can find everything in one place. That wide assortment creates an entirely new differentiator when it becomes omnichannel. That’s very different. And it includes both 1P and 3P right? So that’s the beauty of Walmart is you can have those hundreds of millions of products delivered in the way that you want at the price that basically connects with you.

Kate McShane

And how are you supporting marketplace from a marketing perspective? How are you letting your customers know that this is something you’re offering?

Manish Joneja

So marketing team focuses again on customer backwards. When I think about back-to-school, back-to-school when you work backwards, it’s not about whether I have the merchandise as a seller or Walmart has it 1P. It’s again agnostic. We want to make sure we can serve the right items. So if you go to walmart.com, you’ll start seeing more journal merchandise pop up in your app or in dotcom. You’ll see that will be a mix of 3P and 1P. Last holiday season, starting last, actually, last year, you’ll see majority of the items are coming from really amazing sellers who are selling, one of the hot selling products last year was a pink Lamborghini, when the Barbie movie came out, pink was a hot color. And that sold out. So these sellers are really fast in acquiring inventory. So that shortens the go-to-market signal for us, right, and they bring the inventory on and sell it. So that’s what marketing does is, pink Lamborghini was one of the part of the market initiatives that we did. So our marketing team like us focuses on customer first, increase the consideration set for general merchandise. So you can order guacamole with LEGO and everything else that you want with an iPhone cover and get delivered to your home.

Kate McShane

I think one of the most intriguing parts of marketplace when it comes to investor consideration is just what is contributing to the top line but also how we should think about it from a margin standpoint. So I wondered if you could talk to that a little bit.

Manish Joneja

Yes. So our objective is to make and continuing being the first place to shop, Walmart. And for that, we have to serve our customers what they need, want and love, and we cannot buy every single item that’s made in the world. That’s where the Walmart marketplace comes in, it extends that. It’s complements already awesome assortment that we have in 1P for the 3P deep assortment that brings to the table. And part of that is it creates this, deepens the relationship with the customers. So what we’re seeing is more customers come more often and buy more often across different categories. So it’s not just groceries, it’s toys, it’s electronics, it’s fashion. It’s hard lined at home goods. And what we are realizing is that our customers already wanted these merchandise that we did not have and sort of bringing the merchandise on that’s connecting with the sellers with the customers. We’ll see it happen across our segments. So it’s not just one category. And Premium Beauty, for example, right? That’s how we figure out was there’s a demand for it. How do we go and unlock the demand to serve our customers better. Same thing with tires. We connected online offline, local finds is going to be in the same path. And that’s — it’s more about connecting demand with supply, right? And as you do that, the sellers come on board and the suite of services we have created for them to connect with the customers more, fulfillment services, ads, data and more, that creates an ecosystem that actually helps our P&L as well. Then it’s about if our sellers win, which means a customer winning, that’s when we win. So we only succeed when our ecosystem of sellers and customers win.

Kate McShane

And as a percentage of overall e-commerce, I mean, even with the growth that we’ve seen the last couple of quarters, I think, e-commerce is still driven primarily by 1P. So what does the evolution of marketplace ultimately look like in terms of its contribution to e-commerce in the future?

Manish Joneja

So the thing about e-commerce are omnichannel commerce for us, right? What we want to do again is be there for our customers for the items that they search. And as looking at the future, you can see more and more penetration of marketplace items come in, so more sellers coming on board, you’ll see more models evolve. You’re seeing people come and sell in bulk, for example, we have B2B marketplace. So sellers can sell in bulk to small businesses, right? That’s a new model that we are ramping up. You will see local marketplace ramp up, you’ll see cross-border more happen. So we have the right merchandise. If you’re in one of these markets, you tend to gravitate towards brands that we might have. You’re going to enable that transaction as well. You’ll see higher penetration come. But what we’ll never compromise is on trust. I want to make sure we have the right sellers, the right assortment, and we enable them to sell across all the countries and the cohorts. There are more models that I can’t think of right now that will pop up. But we want to be ahead of the game and lead that through change. That’s how we see e-commerce and marketplace penetration growth.

Kate McShane

Okay. And then when it comes to Walmart as a company working to grow operating income faster than sales, how does marketplace play a role in that?

Manish Joneja

Yes. So think about marketplace, I think, John David Rainey is right, where he said it’s a linchpin, right? So basically for a future rev mix. If we get the right assortment, we see our customers come in more and buy more and more frequently. You see sellers come and buy more — sell more frequently especially when it’s a low-cost profitable platform. And that’s despite all the fees and everything else that we have in place right? As we expand that, you’ll see a larger penetration come towards e-commerce and marketplace and we’ll see more revenue mix happen through our sellers. So that’s why we focus a lot on getting the right merchandise, right? It’s not about getting just an arbitrary number of sellers and SKUs, is about the right merchandise at the right time at the right place. And if you can get that, you see higher conversion. We see sellers sticking, bringing more merchandise. And I’ll give you an example. Last holiday season, Black Friday and Cyber Monday, one of the top selling days for our lot of our sellers, they set records. A lot of sellers ran out of stock. So they had to rush inventory because there was a high demand. They ran out of stock again. So we’re seeing sales, we get sales. So these sellers are coming and asking us, like, hey, what are the projections we can do? So we’re seeing inventory hit our SCs right now for the upcoming events that we have. So we’re seeing that if we can connect the dots well for these customers and sellers we’ve seen the supply wheel kick off. And that’s what’s really exciting. That example I took about a seller who was $50,000 to $20 million, there are so many success stories that we had in Seller Summit. We had a line out the door for Walmart merchants talking to us. They really appreciate the, it’s not quantifiable, but the humanity factor of it. Like every seller we worked with, knew the name of an account manager or a customer service agent that help them. And that you don’t get anywhere. So I started with the humility aspect that I basically found in my interview when I was trying to join and I figured out Walmart, that’s just a main or organic and a culture that’s called out by sellers and we really appreciate them for that, and we want to make sure we can be there as a human partner to them as they grow.

Kate McShane

Can you just talk a little bit about some of the risks that you’re managing with regards to this as it sounds like everything is moving in the right direction. You’re seeing this double-digit very strong growth. But what risks do you have to manage in the process?

Manish Joneja

So we have or roadmap planned for the entire year. And so like forward and think about long-range planning. We have to make sure we can deliver our promises, right? So I talked about trust, which is a really important factor. The risk that I look at is, are we executing our plans at the right time? There’s a time for everything. We could have done some of these initiatives early last year. But again there’s a sell side and buy side, right? I can bring the assortment, but a customer has to be able to buy it in the way that they used to. The way that you shop Premium Beauty, the way that you shop Resold, the way that we shop Collectibles. So we have to time it right. And that’s one of the things that we work internally really well as Walmart is it’s all our teams is a company-wide initiative versus just a marketplace initiative as to slot it in the right time so we can maximize the growth. The last thing we would want is bring assortment online that doesn’t sell and then basically it sticks around and become dead inventory. So we work with our sellers very closely to make sure it’s the right time for the right inventory.

Kate McShane

And then for our last question, one thing that you mentioned was we’ve talked about all of kind of the interconnectedness between fulfillment and connect and there is even within the store, which you mentioned before. So I think we’ve seen digital signage in the store able to showcase items that people can get on marketplace through a QR code for example. How are you envisioning that evolution of the store assortment with marketplace?

Manish Joneja

Yes. I think omnichannel is one of the biggest super power we have that nobody can replicate, right? So when you think about the broad customer reach we have, that, combined with our combination of digital and physical experiences. And our stores, 90% of the US population being within 10 miles of a store that’s a really powerful combination that nobody can compete with. That’s one of the reasons we could figure out tires, returns, signage, we’re talking about, right? There more test and play right now as you think about like blurring the boundaries between our assortment before stores and online. And that’s why we saw e-commerce we are $800 billion, right. We’re growing 20% comp, marketplace 30% plus comp. We’re going to keep on doing these tests and find new ideas to serve our store customers the digital assortment and same with digital to do through OPD. That’s our kind of approach. And again it goes backwards, works backward from, we want to be the first place to shop for our customers. They’re looking for what they need. They’re looking at what they want. They’re looking for new inventory. By adding all these things together with the power of omnichannel that nobody else has like think about being in a Walmart store, right, shelf. What we’re also seeing is sellers are becoming suppliers, like I said, right? So RTIC coolers, when they launched the entire assortment, they saw the right SKUs of the merchants of what was selling. We moved those assortments to our stores. That’s a new kind of avenue for revenue for them. But we’re also seeing suppliers bring their extended assortment on marketplace. That gives them like, it’s a no regret model. You list your items, you see what’s selling, you’re able to set the right prices. You can ship it yourself or you can ship it through Walmart fulfillment services. That helps us become the first place to shop for our customers and the first consideration for our sellers.

Kate McShane

Great. Thank you so much for being with us today. We learned so much. Thank you.

Manish Joneja

Thank you so much. Thank you.