SAG_Twitter_MEME_Retailers_Missing_Something_Aug16.pngWalmart’s recent acquisition of could take something valuable away from the retailer – inventory.

Whenever anyone talks about digital disruption you can be pretty sure to hear about these two examples:

  • Uber – the world’s largest taxi company that doesn’t own any vehicles
  • Airbnb – the world’s largest accommodation provider that doesn’t own any beds

But what about a retailer that doesn’t own any merchandise?

This is called consignment inventory and it means that the retailer does not technically “own” the goods until they are sold - the vendor of the goods keeps ownership until then. This makes sense for many reasons, not least of which is that the retailer does not have to tie up its capital in inventory. It also makes sense if the goods in question are unproven or expensive, hence sales could be questionable.

Walmart was one of the pioneers of the concept of consignment inventory in retail. It could be said that eBay acts as a consignment retailer, but I would argue that eBay is a marketplace offering a platform for people or companies acting as retailers to do business with consumers.

Depending on where in the world I am, when I go to Walmart, Tesco, Carrefour, Edeka, Albert Heijn, ICA or Woolworths I can buy products from multiple brands or manufacturers in one transaction and if I order online for delivery they arrive together in one shipment. With eBay this is not the case. 

While I can probably source products from many different brands and product manufacturers – each of which may have their own eBay shop - I need to make multiple transactions and wait for multiple shipments.  I am unlikely to find a single eBay Shop that sells everything I need.

When I saw in the news that Walmart is paying $3 billion for, my first thought was that it seemed like a phenomenal amount of money for a business that has been trading less than two years and is not yet profitable.  Then I thought about it some more. potentially offers Walmart a jump up in terms of online commerce.’s differentiated approach – bigger discounts when you buy more things – is pretty unique and its technology platform has been built from the ground up.  It offers a number of possibilities for Walmart – using Walmart’s stores as inventory sources for, thus offering Walmart the ability to sell to customers who would not normally shop there.

For traditional retailers, setting up online retail is fraught with difficulties.  Many years of legacy processes and IT systems that are focused on a single route to market, i.e. the store, need “re-wiring” and this is a tall order.  This may well be one of the reasons retailers have continued to struggle with omni-channel adaptation

Not everyone thinks Walmart’s acquisition was a good idea. Former Sears Canada CEO Mark Cohen, thinks it was a waste of money. "I think they just spent $3 billion on an idea that they should have been able to create for themselves," Cohen, now the director of retail studies at Columbia Business School, told Business Insider. "It looks and feels like a 'Hail Mary' pass. I think it is a terrible mistake."

Yet, there is a precedent for acquiring pure play online retailers in order to jump-start, or “jump up” online capability.  For example, John Lewis in the UK makes over 30% of its sales online – an unusually high proportion - and its online prowess can be traced back to an acquisition in 2001.

And while can potentially offer the jump start Walmart needs to compete with Amazon, there are some other – maybe more interesting - possibilities.  Maybe can offer Walmart the ability to become the Uber or Airbnb of retail. 

A combined could become an organization that acts as true retail aggregator, one which does not own any inventory but (through Walmart’s infrastructure) has the facilities to store, pick, pack and ship orders to customers – irrespective of brand or product manufacturer. 

This is still missing in retail and given Walmart’s buying power and history using consignment inventory it creates an intriguing possibility for Walmart/ could become the world’s largest retailer that owns no merchandise.

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