How Wal-Mart Stores, Inc. (WMT)’s e-Commerce Potential Stacks Up

Last week, I wrote an article outlining the steps Wal-Mart (NYSE:WMT) is taking to improve e-commerce sales. A commenter pointed out that comparing Wal-Mart Stores, Inc. (NYSE:WMT)’s online sales to a company like Amazon.com, Inc. (NASDAQ:AMZN) is simply not the correct analysis. While I believe Amazon is most likely Wal-Mart’s biggest threat, more so than other big-box retailers are, I’ll analyze what other brick-and-mortar retailers have done in the online space, and their plans going forward to compete with Wal-Mart, as well as Amazon.

First, what’s up with Wal-Mart Stores, Inc. (NYSE:WMT)?

Wal-Mart Stores, Inc. (NYSE:WMT) did not disclose e-commerce sales for 2012, but had estimated online revenues of $4.1 billion in 2010 and $4.9 billion in 2011. As a percentage of total sales, those numbers represent and just under 1% and about 1.1% respectively.

If in 2012, the company grew online sales significantly faster than total e-commerce economy, at say 30%, a generous estimate says the company sold about $6.4 billion in merchandise through its online store. (This estimate is within reason as The Top 500 list of online retailers put Wal-Mart’s 2012 e-commerce sales below Apple, which sold $6.66 billion in its online store during 2012.) With $466 billion in merchandise sales last year, that’s still only 1.4% of total sales.

There’s likely a reason Wal-Mart Stores, Inc. (NYSE:WMT) chose not to disclose its digital sales numbers. If they were good, the company would want to show them off.

The good news is the company’s plan to increase e-commerce sales to $9 billion in 2013 appear to be on track. In the Wal-Mart Stores, Inc. (NYSE:WMT)’s fourth quarter earnings call at the end of February, e-Commerce President Neil Ashe iterated, “The investments we’ve made so far in our e-commerce business are delivering. Revenue growth is accelerating and ahead of our plans.” With analysts estimated Wal-Mart’s 2013 revenue at $492.4 billion, e-commerce could represent over 1.8% of total sales if the company hits its target (NYSE:TGT)s.

How does the (real) competition stack up?

In order to make an apples-to-apples assessment of Wal-Mart Stores, Inc. (NYSE:WMT)’s current status in the e-commerce environment, I’ll compare it to Target Corporation (NYSE:TGT) and Costco Wholesale Corporation (NASDAQ:COST).