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Why Walmart and Target’s e-commerce gains are a blaring siren to brick-and-mortar

As brick and mortar retailers continue to struggle during the coronavirus, e-commerce has seen a boom in sales. Yahoo Finance’s Dan Roberts joins The Final Round panel to break down why Walmart and Target huge e-commerce gains are a blaring siren to brick-and-mortar

Video Transcript

SEANA SMITH: It's interesting, because we've heard a number of companies talk about the impact that they have seen from the stimulus and how important it is. And a couple of those names are some of the retail numbers that we got out this morning. Walmart commented on that. And Home Depot has also had an impact from some of the stimulus.

And those two reports were pretty phenomenal when you take a look at those numbers. There is no shortage of impressive numbers within that report. It is the biggest earnings surprise that Walmart has seen in more than 30 years.

And Dan, when you take a look at how the companies are reacting today-- I mean, shares are moving to the downside. But I'm not sure if we've seen a quarter that has been so strong here, especially when it comes to Walmart.

DAN ROBERTS: Yeah, it's very interesting with Walmart. I mean, the big headline is, obviously, that online sales rose 97%, which is jaw-dropping, but also really shouldn't be, right? And, in fact, in Q1, Walmart had said online sales were up 74%. So we're just seeing a continuation of the trend.

And I think we'll look for the same from Target tomorrow. Target, in Q1, had its online sales up 181%. And then in the month of April alone, Target said they were up like 280%. So that's to be expected.

Now some further wrinkles with Walmart that I think really stand out within that-- first of all, the idea that their food delivery ordering is way up. They said it was at an all-time high in the quarter. And that's ordering food online and then either picking it up at the store, your groceries, or you can have them delivered. So that continues to be a big category for Walmart, which I think says a lot of why so many new chains are going into grocery ordering online.

And then also, Walmart revealing that, actually, its total number of transactions fell about 17% in the quarter. But people were buying more per transaction. So the ticket amount per transaction rose to make up for it. And that, obviously, helped the profitability, too.

So you don't need as many people placing as many orders if they're buying more per order. And I think that's a very encouraging metric in terms of online shopping, right? I mean, we've seen that the retail spending last month was up like 1.2%. That missed expectations. But still, on the bright side, third month in a row that retail spending rose.

And, of course, all of this is leading us to what kind of shopping season might we see for the holiday shopping season come November, December? I think that's going to be very interesting. I think a huge bulk of it, obviously, is going to be online.

So yeah, huge beat from Walmart, and in some ways to be expected. I think if you're brick and mortar [AUDIO OUT] these jaw-dropping numbers from chains like Walmart and Target, and you should be very alarmed.