Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
Eduardo Castro-Wright is the new president and CEO of Global.com, Wal-Mart’s worldwide online retail arm.
Wal-Mart Stores Inc. today announced that it is moving its U.S. operations head, vice chairman Eduardo Castro-Wright, to direct the global e-commerce unit that the world’s largest retailer set up in January. Castro-Wright will be transitioning to into his new position as president and CEO of Global.com through Aug. 1.
"I am committed to building the leading global e-commerce and multichannel business and to truly leveraging our global sourcing to deliver value for our customer,” says Castro-Wright.
The goal of Wal-Mart’s California-based Global.com unit is to develop e-commerce strategies and create a single e-commerce platform that could be used in every market, similar to the single global platform that Amazon.com Inc. operates.
“As we continue to become a truly global company and address the business challenges of a rapidly changing world, it is clear that Global.com and global sourcing are critical to our future growth and success," says Mike Duke, Wal-Mart president and CEO.
Wal-Mart made the move due to Castro-Wright’s wife having recently undergone a heart transplant in California, which makes her unable to leave the state, Castro-Wright said in a memo to employees today. Castro-Wright had been based at the company’s Bentonville, AR headquarters.
Wan Ling Martello, who has been overseeing the Global.com unit as executive vice president and chief operating officer, will report to Castro-Wright.
The move strengthens Wal-Mart's focus on Global.com, says Leon Nicholas, director of retail insights for Kantar Retail. "This means Wal-Mart will have a faster, quicker and greater focus on that initiative," he says. "For web retailers like Amazon.com, which is Wal-Mart's biggest competitor in the space, Wal-Mart can apply its scale to challenge them. And, to the degree that they can do so, they can offer lower prices."
Doing so should help strengthen Wal-Mart’s stated goal of driving growth on the web, says Gene Alvarez, an analyst for Gartner Inc.
“By moving someone whose background is in the store arena to the online space shows that Wal-Mart feels that the skills needed to grow its online channel are the same merchandising and execution skills that enabled it to cement its bricks-and-mortar dominance,” he says.
The move is a clear sign that Wal-Mart, No. 6 in the Internet Retailer Top 500 Guide, aims to become an even bigger force on the web, says Alvarez. Wal-Mart executives have said several times in the past year that the company’s goal is to be the top online retailer. But Wal-Mart is far from challenging Amazon for the top spot: Wal-Mart generated $3.5 billion in online sales in 2009, by Internet Retailer estimates, whereas Amazon, which sells only online, reported sales of $24.5 billion.
Alvarez says he expects other large bricks-and-mortar retailers to make similar moves in which they shuffle their web and bricks-and-mortar executives so that lessons learned in one channel can be brought to the other.
“If you move someone who is extremely good in the store environment to the web store, they bring those the traditional merchandising skills to the web environment, but the web environment also allows them to have new merchandising tools,” he says.
In an example of a major retail chain moving an e-commerce executive into a position of broader responsibility, Barnes & Noble in March promoted William Lynch from president of BarnesandNoble.com to CEO. Since moving to the new position Lynch has emphasized his goal of transforming Barnes & Noble from a traditional chain retailer to a company more focused on e-commerce and digital media, including the sale of its Nook e-book reader and of electronic books for such readers.