Online now driving major retailers’ strategies
News that Tesco is rejigging its head office functions in order to focus greater attention on its digital operations looks very similar to the moves that have proved incredibly successful at Walmart in the US.
Both Tesco and Walmart have been performing particularly well online – as seen by Tesco’s 11.2% e-commerce growth over the festive period – and both have been further leaning into digital and quick-commerce combined with enhanced personalisation. AI tools are also in the mix with various initiatives underway.
Subscribe to TRBThis is all very different to the early days of online commerce when the major retailers had reservations about the potential for the channel and held serious worries that it would simply cannibalise revenues from their physical store estates.
The idea they concocted was to keep their internet operations at arms-length from their existing businesses and run them as completely separate entities – with different offices, separate teams, and individual dedicated warehouses. Tesco.com was run from a different part of Hertfordshire from the core supermarkets operation while Walmart took the radical step in January 2000 to effectively outsource the running of much of Walmart.com to Silicon Valley-based venture capital firm Accel Partners.
By 2001 Walmart had recognised its mistake and bought out the Accel stake and began to work on bringing the channels much closer together. But while Walmart was tentatively experimenting with its online capabilities it was giving up serious ground to Amazon and that remained the case until 2014 when Doug McMillon became CEO. He stipulated that e-commerce was to be a key plank in the long-term strategy for Walmart. This took the fight to Amazon and since then it has closed the gap with its rival. In the past year alone online sales have grown an incredible near-25% and hit more than $150 billion for the first time. Within this quick-commerce rose 60%.
A sign of intent was the recent installation of John Furner as the replacement for McMillon who is expected to drive the business through the next AI-drive transformation with agentic AI playing a starring role. Helping him are three recently-promoted executives to its senior team that includes two who previously worked at Amazon.
Further reflecting the company’s digital focus was the move my Walmart late last year to shift its market listing from the New York Stock Exchange (NYSE) to the Nasdaq, which is the home of most of the big US technology companies. During its time on the new market the Walmart share price has been on an upward trajectory and sits at around the $1 trillion mark that puts it in the company of the highly valued tech firms, which is pretty impressive for a retailer dealing in shifting physical goods around.
Tesco will be hoping to follow its US counterpart in continuing to build out its digital capabilities that place it in a comparatively strong position to the online-only specialists including the mighty Amazon and its rival grocers. Its share price certainly reflects the progress made to date and the prospects of further growth. It has recently reached its highest market share in over a decade in the UK. This has sent the share price on something of a tear – that puts both Walmart and Amazon in the shade – as it currently sits near to its 52-week high at close to £5 compared with the low point it hit in April 2026 of £3.10.
The days when the e-commerce divisions sat discreetly away from the core stores businesses are long gone and it is now the digital capabilities at retailers that are driving all parts of these organisations.
