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Why the Wal-Mart (NYSE: WMT) Stock Price Is in Trouble Today and in 2016

By , Contributing Writer, Money Morning •

According to the National Retail Federation (NRF), the number of Cyber Monday shoppers will decrease this year. And that's troubling for the Wal-Mart Stores Inc. (NYSE: WMT) stock price.

The NRF reports 121 million shoppers plan to shop online on Cyber Monday this year. That's down from the 126.9 million who planned to last year.

Wal-Mart has made a big investment in Cyber Monday with big sales, blockbuster deals, and free shipping. It even started Cyber Monday on Sunday at 8 p.m. ET, four hours earlier than usual.

Wal-Mart maintains the deals are aimed at being customer friendly. The country's biggest brick-and-mortar retailer said the early start makes it easier for customers to "get ahead of the busiest online shopping day of the year and save on the best gifts."wmt stock price

As concerns escalate that Cyber Monday might not live up to expectations, the WMT stock price slipped 1.5% to $59.01 intraday Monday.

While today's sales are a major concern for investors, Cyber Monday isn't the only problem the WMT stock price is facing now...

WMT Stock Price Falls as Online Sales Lag

As of Aug. 31, Wal-Mart boasted 5,249 retail stores, 3,445 supercenters, 455 discount stores, 656 neighbors markets, and 652 Sam's Clubs. The company's focus has been on stocking and keeping these stores manned.

That means little attention has been given to its online presence.

Wal-Mart presently gets just 3% of sales from its website. In comparison, Macy's Inc. (NYSE: M) gets 8%, Nordstrom Inc. (NYSE: JWN) gets 19%, and Neiman Marcus get 26%.

Then there's e-commerce goliath Amazon.com Inc. (Nasdaq: AMZN). In 2014, Wal-Mart's online sales were $12.2 billion compared to Amazon's $89 billion.

Amazon officially became more valuable than Wal-Mart this summer. On Aug. 28, Amazon had a market cap of $246.54 billion compared to Wal-Mart's $230.53 billion cap.

While this has become a serious problem, Wal-Mart has been slow to address the issue. And the solutions the company is implementing appear to be too little too late for the WMT stock price...

What's Next for the Wal-Mart Stock Price

The share of e-commerce as a percent of total retail sales rose from 0.6% in 1999 to 7% at 2015's start. Quarterly increases have averaged 3.7% versus 1.1% for total sales, according to Forrester Research.

Over the past three years, Wal-Mart has invested $2.7 billion in improvements to its e-commerce business. That includes $700 million in 2015. Over the next two years, the company will spend nearly $2 billion more.

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CEO Doug McMillon said earlier this year the company will spend $900 million in improvements to Walmart.com and its global e-commerce business in 2016. Another $1.1 billion will be spent in 2017.

It's not unusual for brick-and-mortar retailers to get 20% of their revenue from online sales now. Wal-Mart is nowhere near that figure, however.

"I don't think Wal-Mart will hit that because its core customer isn't the most wired or tech savvy shopper out there," Forrester Research analyst Sucharita Mulpuru told Business Insider. "But to expect 10% I think would be reasonable."

Still, Wal-Mart's online business has a long way to go before it hits the 10% level.

And now investors are recognizing the importance of online sales and online retailers.

Amazon shares are up a meteoric 116.7% year to date. The Wal-Mart stock price is down 31.4% since the start of 2015. If Cyber Monday sales disappoint, expect the WMT stock price to fall even further this week.

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