November 12, 2007
Walmart.com Looking for a ‘Great Christmas’
Raul Vazquez, CEO of Walmart.com, is looking for big things from the website this holiday season.
“Customers are still spending for the holidays. Halloween was very good for us, so I suspect that Christmas is going to be great,” he told Reuters last week.
Mr. Vazquez said he was looking for Walmart.com’s sales to jump between 40 and 60 percent this year. Total online sales are expected to increase around 20 percent for the holiday period.
The website, like the rest of Wal-Mart, is looking to get a head start on the competition by posting deals early and often. Walmart.com plans to offer special sale prices including some web-only deals on Thanksgiving. It is also putting together special promotions for the week following the Black Friday weekend.
Walmart.com is also looking to more closely integrate its operation with Wal-Mart’s stores, according to Mr. Vazquez. He said the “Site to Store” free delivery program has exceeded performance expectations and now represents more than a third of sales made by the website.
Another complement to the store environment is the website’s “find in store” feature that tells consumers if a given product can be found in stock at a nearby location. Mr. Vazquez told Reuters the feature is “getting about a million uses a week.”
Discussion Questions: What do you see as Walmart.com’s greatest strengths and opportunities for growth? How do you explain the high expectations for the site’s performance this holiday season versus online as a whole? What are your thoughts on the website’s integration with Wal-Mart’s store network?
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I think Wal-Mart’s e-commerce “site to store” option will play a major role in building overall sales volume in two key areas…Electronics (especially TVs) and Toys.
I for one do not like to go from store to store looking for items my grandchildren want–it is so much easier and stress-free to do it online and either have the item shipped or pick it up at the store.
If online retailers extend the Black Friday frenzy to their online shopping sites the goals stated by Wal-Mart should be easily met–the key questions are 1)what is the effect on total Wal-Mart sales? 2)Will the stores have the inventory needed to support the “site to store” strategy?
Wal-Mart is making a much greater effort this year to integrate its web site with its traditional retail marketing approach, well beyond the gift and higher end selection. This new more dynamic approach will result in greater sales and profits for Wal-Mart this holiday season and even more so in future holiday seasons after the mainstream consumers become more aware that the web site is more comprehensive than it was in past years.
All the people who bought the bargain computer bundles from Wal-Mart stores and continuing to buy brand name PCs from them, are likely to be shopping the retailer’s website. Sell them the computers, so they can shop more with you. Great idea!
Walmart.com’s greatest strengths and opportunities for growth seem to rest in its own high expectations. It offers Wal-Mart a potential opportunity to increase its appeal to affluent consumers who would accept W-M’s low prices but do not wish to squander time sauntering down the hallways of Wal-Mart stores.
Re Walmart.com’s great sales expectations: To expect the unattained shows a thoroughly modern intellect.
Walmart.com remains a useful site for shoppers to help them understand more about the retailers’ merchandise, events, and opportunities for value, samples and more. I think the big opportunity for Holiday 2007 is in electronics, as they have the ability to deliver the value that economically focused consumers are really focused on this year. The risk is in the face to face transactions with consumers; are the store associates ready to reaffirm the knowledge available on the site? I will be testing this out in the digital camera space in the next two weeks.
I’ve heard all the hype so I decided to try it myself. Wal-Mart is playing offense, using its web-based effort to further enhance its in-store sales will pay dividends. Most Americans continue to complain about how busy we are. There never seems to be enough time to get it all done. Thus, making the shopping experience easier is one of the things consumers need and desire.
Wal-Mart starting early to reach out to consumers is very smart. In fact, they seem to be focused on higher ticket and branded product. This may reap an additional reward in that they may attract a more affluent shopper in addition to their normal profile consumer. With published success, other retailers will be following this formula very soon.
Wal-Mart.com’s goals are indeed lofty, and are unrealistic. A 40-60% increase would only be possible if their sales from last year were horrible (which they were not) and if Wal-Mart was emphasizing a new marketing strategy which was driving first time buyers and repeat business to their site in ever-increasing numbers. None of this is being done and, although Wal-Mart’s internet positioning is increasing, we cannot forget their competitors (like Amazon) who are also increasing their Internet presence. The key here is that we will certainly see an increased presence from Wal-Mart (20-30% would be more in-line with expectations), but not 40-60%.
Walmart.com increases store traffic via pickups and inventory reporting. The site can also be used to sell items not generally carried in all the stores, so market share can rise without a great inventory investment. And market research, price testing, and assortment testing can be augmented by the web site. If the Walmart.com operating cost is kept low, it can be a winner. If the operating cost becomes excessive, it can’t be outweighed by high margins, since Wal-Mart customers won’t pay high margins.
First, I think most important to consider here is, up 40-60% from what? Once we know that, it can be determined whether their goals are lofty or not, or in line with online sales overall. Secondly, I think it’s important to determine how they will actually measure online sales in the first place.
Currently, WM has launched a promotion where you may order large or high ticket items (TVs, electronics, PCs and the like) from their web site and pick them up at your local store, avoiding shipping costs. Not a bad idea, actually. However, is this an ‘online sale’ or a ‘store sale’? It would be interesting to know, at least from Scanner’s point of view.
Overall, online sales by most measurements are about 5% of overall retail sales. So achieving a 40% gain to 7% might be attainable. Although, it depends on how you measure it. If you’re looking to report numbers, they are only left to the imagination as to how you report them.
Then again, if you are looking to generate web-to-store sales and the incremental gain from the visit to the store, WM may be on to something in their current method of promotion of web-to-store convenience. From my view, this is the purpose of the web–not to remove traffic from your stores, but to generate it. Measure the numbers any way you’d like, but I wouldn’t call their moves this year unrealistic. I would call them a stake in the ground by which all other retailers are measured. Now, if I just knew the formula….
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I think Wal-Mart’s e-commerce “site to store” option will play a major role in building overall sales volume in two key areas…Electronics (especially TVs) and Toys.
I for one do not like to go from store to store looking for items my grandchildren want–it is so much easier and stress-free to do it online and either have the item shipped or pick it up at the store.
If online retailers extend the Black Friday frenzy to their online shopping sites the goals stated by Wal-Mart should be easily met–the key questions are 1)what is the effect on total Wal-Mart sales? 2)Will the stores have the inventory needed to support the “site to store” strategy?
Wal-Mart is making a much greater effort this year to integrate its web site with its traditional retail marketing approach, well beyond the gift and higher end selection. This new more dynamic approach will result in greater sales and profits for Wal-Mart this holiday season and even more so in future holiday seasons after the mainstream consumers become more aware that the web site is more comprehensive than it was in past years.
All the people who bought the bargain computer bundles from Wal-Mart stores and continuing to buy brand name PCs from them, are likely to be shopping the retailer’s website. Sell them the computers, so they can shop more with you. Great idea!
Walmart.com’s greatest strengths and opportunities for growth seem to rest in its own high expectations. It offers Wal-Mart a potential opportunity to increase its appeal to affluent consumers who would accept W-M’s low prices but do not wish to squander time sauntering down the hallways of Wal-Mart stores.
Re Walmart.com’s great sales expectations: To expect the unattained shows a thoroughly modern intellect.
Walmart.com remains a useful site for shoppers to help them understand more about the retailers’ merchandise, events, and opportunities for value, samples and more. I think the big opportunity for Holiday 2007 is in electronics, as they have the ability to deliver the value that economically focused consumers are really focused on this year. The risk is in the face to face transactions with consumers; are the store associates ready to reaffirm the knowledge available on the site? I will be testing this out in the digital camera space in the next two weeks.
I’ve heard all the hype so I decided to try it myself. Wal-Mart is playing offense, using its web-based effort to further enhance its in-store sales will pay dividends. Most Americans continue to complain about how busy we are. There never seems to be enough time to get it all done. Thus, making the shopping experience easier is one of the things consumers need and desire.
Wal-Mart starting early to reach out to consumers is very smart. In fact, they seem to be focused on higher ticket and branded product. This may reap an additional reward in that they may attract a more affluent shopper in addition to their normal profile consumer. With published success, other retailers will be following this formula very soon.
Wal-Mart.com’s goals are indeed lofty, and are unrealistic. A 40-60% increase would only be possible if their sales from last year were horrible (which they were not) and if Wal-Mart was emphasizing a new marketing strategy which was driving first time buyers and repeat business to their site in ever-increasing numbers. None of this is being done and, although Wal-Mart’s internet positioning is increasing, we cannot forget their competitors (like Amazon) who are also increasing their Internet presence. The key here is that we will certainly see an increased presence from Wal-Mart (20-30% would be more in-line with expectations), but not 40-60%.
Walmart.com increases store traffic via pickups and inventory reporting. The site can also be used to sell items not generally carried in all the stores, so market share can rise without a great inventory investment. And market research, price testing, and assortment testing can be augmented by the web site. If the Walmart.com operating cost is kept low, it can be a winner. If the operating cost becomes excessive, it can’t be outweighed by high margins, since Wal-Mart customers won’t pay high margins.
First, I think most important to consider here is, up 40-60% from what? Once we know that, it can be determined whether their goals are lofty or not, or in line with online sales overall. Secondly, I think it’s important to determine how they will actually measure online sales in the first place.
Currently, WM has launched a promotion where you may order large or high ticket items (TVs, electronics, PCs and the like) from their web site and pick them up at your local store, avoiding shipping costs. Not a bad idea, actually. However, is this an ‘online sale’ or a ‘store sale’? It would be interesting to know, at least from Scanner’s point of view.
Overall, online sales by most measurements are about 5% of overall retail sales. So achieving a 40% gain to 7% might be attainable. Although, it depends on how you measure it. If you’re looking to report numbers, they are only left to the imagination as to how you report them.
Then again, if you are looking to generate web-to-store sales and the incremental gain from the visit to the store, WM may be on to something in their current method of promotion of web-to-store convenience. From my view, this is the purpose of the web–not to remove traffic from your stores, but to generate it. Measure the numbers any way you’d like, but I wouldn’t call their moves this year unrealistic. I would call them a stake in the ground by which all other retailers are measured. Now, if I just knew the formula….