Walmart Inc. said Monday that it's partnering with e-commerce platform Shopify to bring more small businesses to Walmart's online marketplace.
The deal will let Walmart offer a larger assortment of merchandise while giving small- and medium-sized sellers access to the increasing traffic on Walmart.com, said Jeff Clementz, vice president of Walmart Marketplace.
The Bentonville-based retailer's U.S. e-commerce business grew 74% in the first quarter, led by its third-party sellers, the company said last month. Walmart attributed the increase largely to the coronavirus pandemic that kept many shoppers at home.
"As we launch this integration with Shopify, we are focused on U.S.-based small and medium businesses whose assortment complements ours and have a track record of exceeding customers' expectations," Clementz said in a news release.
"Shopify powers a dynamic portfolio of third-party sellers who are interested in growing their business through new, trusted channels," Clementz said of the Canadian company. "This integration will allow approved Shopify sellers to seamlessly list their items on Walmart.com."
Clementz said Walmart is now vetting Shopify sellers for addition to its online platform. The retailer expects to add 1,200 Shopify sellers this year, he said.
Shopify said in a news release that approved merchants will be able to connect their store on Shopify to their Walmart seller account. From there, they can easily sync their product catalog and create product listings on Walmart.com, the company said.
Also, Shopify sellers won't pay any fees to list their products on Walmart's e-commerce site. Instead, they will pay a referral fee when they make a sale, the company said.
Satish Kanwar, Shopify's vice president of product, said in the release the company focuses on "helping entrepreneurs go from just an idea to becoming thriving, scalable businesses." Working with Walmart will help sellers connect with consumers in a trusted marketplace that gets more than 120 million visits every month, he said.
Shopify claims to have more than 1 million sellers globally but does not say how many of those are based in the U.S. Walmart doesn't reveal how many third-party vendors sell on its marketplace, though it says millions of individual items are listed there.
Monday's announcement raises several questions for retail analyst Keith Anderson, who isn't yet seeing what's in the partnership for Walmart.
Senior vice president of strategy and insight for e-commerce analytics firm Profitero, Anderson said the benefit may be in the long-term potential rather than any immediate effects.
"The positive about that is it is a sign that Walmart is investing more in its marketplace, although really investing in this instance through a partnership," Anderson said. "And it will increase selection for Walmart, which is good."
What he says he's not very clear on, though, is just how much selection these 1,200 merchants represent. Because they are small and medium-size businesses, he said, "it looks to me like the selection is not going to be profound -- this year."
Shopify also has "pretty frictionless" technology, Anderson said, and he wonders whether Walmart will benefit directly in any way from that. "But it doesn't sound like that's what's being announced," he said.
"It sort of looked to me like over time there may be more potential if Shopify really opens a pathway to distribution on Walmart that's accessible to more than just 1,200 sellers," Anderson said. "And who knows, 1,200 sellers may be enough to really move the needle. But without some of the detail, it's hard to know."