Walmart Inc (NYSE: WMT) said earlier this week that it was partnering with Adobe Inc (NASDAQ: ADBE) to start selling its eCommerce technologies to other small and medium-sized retailers. The move is related to CEO Dough McMillon’s vision to expand the profit sources beyond the core retail business.
Walmart opened less than 1.0% down on Friday morning but recovered the entire decline later on.
Why did Walmart choose Adobe for the partnership?
Adobe’s years of experience in cloud-based services made it a perfect ally for Walmart to sell its marketplace software to retailers through a subscription. Walmart’s technology will help retailers add convenience for users to shop online and pick up at a store. The software will also let these businesses add products to Walmart’s eCommerce stores with ease and efficiency.
According to Adobe CEO Shantanu Narayen, people who shop online and pick up at a physical store have “doubled or close to tripled” since 2018. In his interview with CNBC’s Jon Fortt, he said:
“We were thrilled when they announced that they were going to be working with Adobe technology to enable people to do this last mile of commerce, to engage directly with customers. The partnership with Walmart hopefully leverages for us their reach, their distribution, and their desire to enable more customers to do that.”
COVID-19 fuelled ‘shop online, pick up at store’ orders
Adobe was one of the pioneers of the cloud and subscription model. Data from its Digital Economy Index suggests only 7% of the total orders at U.S. retailers were placed online and picked up at the store. In comparison, a much higher 22% of the orders were fulfilled this way last year when Americans were increasingly looking for ways to minimise time spent inside the stores.
Adobe shares weren’t much bothered on Friday.
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Wajeeh Khan
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