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Walmart ups its bakery game with online cake ordering, new products

Walmart (WMT), the world's largest retailer, has quietly upped its bakery game by rolling out online ordering and adding new products in stores that’s boosting its share of the cake market.

As a fresh product offering, the bakery is essential to the store — just like its produce section has become critical as one of the first things customers encounter when entering a Walmart.

It's also a big business, with one in every four cakes sold in the U.S. coming from Walmart, according to the company.

"We have some crazy, crazy statistics," said Kinna Thomas, senior buying manager for cakes at Walmart. "We sell enough sheet cakes to circle the earth and the equator. That's lots and lots of cake that we have.”

She added: “As far as our icing is concerned, you know those shell-borders that go on the edge of birthday cakes? We use enough icing to make that border from the earth to the moon and back."

Approximately 90% of the U.S. population lives within 10 miles of a Walmart store. With millions of celebrations — from birthdays, anniversaries, weddings, and graduations — there's a vast market for cakes for the retailer to capture.

The move to modernize the cake ordering process and add new products is part of the company's broader strategy, which has focused on omnichannel.

Walmart is now offering online cake ordering.

A year ago, Walmart began testing online ordering for its classic sheet cakes so customers didn’t have to go to a physical store to fill out a form or call in an order. Perfecting online orders required working on back-office efficiencies to make it easy for associates and customers.

"That is a gap that we've had for a while now ... but I'm so glad to say we have finally arrived where we are chain-wide in our decorating stores," said Thomas.

The 'Year of the Cake'

Using a mobile device or computer, customers can customize the store's sheet cakes, including the flavor, the color, and style of buttercream, filling, decoration, and message, all without having to visit the store.

Some of the themed cakes, including its Unicorn Creations Kit Cake and Super Mario Kart Kit Cake, are also available to order online.

"We're giving you a solution for your party without having to come to the store first to place that order. You're now able to do that online. And I'll tell you, that's probably the thing we are most excited about, and we call this 'the year of the cake' because of that.

The online ordering for sheet cakes is only the first step. The goal is to add more complicated designs eventually.

"We are refining what we have right now," said Thomas.

In addition to the classic sheet cakes, Walmart is now selling basic and premium custom cupcakes, $5 five-inch cakes, decorated bundt cakes, and two and three-tiered cakes.

They're also offering a free "smash" cake, commonly used for photo ops at one-year birthdays, with a purchase of a special bakery item of $14.98 or higher.

"We are in an era where mom wants to show off. Walmart actually has some great amazing two-tier cakes, and we also do wedding cakes, which is a three-tier cake for under $150," said Thomas.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter. Send tips to laroche@oath.com.

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