Wal-Mart Shakes Up E-Commerce, Execs Leave
Wal-Mart Stores Inc. (WMT), the world’s largest retailer, is transferring management of its e-commerce business to heads of stores in developed countries and said two online executives are leaving the company.
E-commerce leaders in markets such as the U.S., Canada and the U.K., will now report directly to the heads of stores in those countries instead of global e-commerce executive Eduardo Castro-Wright, Bentonville, Arkansas-based Wal-Mart said today in an internal memo provided to Bloomberg News.
Raul Vazquez, who leads the developed markets group in global e-commerce, and Steve Nave, head of Walmart.com in the U.S., are leaving the company, Wal-Mart said. The reorganization comes a year after Castro-Wright took charge at the online unit to boost Internet sales and fend off competition from Web retailers such Amazon.com Inc. (AMZN) by expanding in sales of goods including groceries.
“Wal-Mart has been lagging in e-commerce, and the loss of two executives won’t help where the company’s going,” Craig Johnson, president of Customer Growth Partners LLC, a New Canaan, Connecticut-based consulting firm, said in an interview. “It will be challenging for them to build the momentum they need.”
As more shoppers migrate to the Web and sales at U.S. stores decline, Chief Executive Officer Mike Duke has focused on improving the company’s Internet unit by buying Kosmix, a Silicon Valley e-commerce startup, testing home delivery of fresh groceries ordered online and creating @WalmartLabs to speed up innovation.
Wal-Mart doesn’t disclose its online sales. Analysts at Wells Fargo Securities LLC estimate that Walmart.com has revenue of about $6 billion a year, less than 2 percent of total sales. Amazon.com, the world’s largest Internet retailer, increased sales 40 percent to $34.2 billion in 2010.
“Wal-Mart has certainly been facing more competition from Amazon and their domestic business has been challenged in stores,” said Sucharita Mulpuru, a retail analyst at Cambridge, Massachusetts-based Forrester Research Inc. (FORR) “This was an intentional shake-up.”
Dave Tovar, a spokesman, said the two online executives are leaving for personal reasons and declined to comment further. Nave joined Wal-Mart in 2000 and Vazquez in 2002, Tovar said. Joel Anderson will to replace Nave, and will report to Bill Simon, the president and chief executive officer of Wal-Mart U.S.
Wal-Mart rose 2 cents to $49.75 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 7.8 percent this year.
Reuters earlier reported on the shakeup at the e-commerce unit.
With assistance from Ashley Lutz in New York. Editors: James Callan, Robin Ajello
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