Wal-Mart.com Follows Its Retail Roots

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Wal-mart Stores Inc. announced last week it is spinning Wal-Mart.com into a separate company with a separate management team and board of directors.

The development closely follows the relaunch of its Web site on Jan. 1 to better reflect its bricks-and-mortar shopping experience.

The move is timely given that an Ernst & Young 1999 post-holiday online retailing survey indicates that Wal-Mart.com was among the Web's most disappointing sites. The reasons listed by surveyed shoppers of wal-mart.com included an inability to find products, out-of-stock merchandise, uncompetitive prices, and navigation problems.

"This site is a 100 percent improvement over what they had before," said David Cooperstein, director of consumer e-commerce research at Forrester Research, Cambridge, MA. "Their old site was difficult to use, did not merchandise effectively and offered no reason to return to the site. This [new] site is almost like a branded store."

The new site includes a travel agency and photo center for processing pictures or sharing them with family and friends through an Internet link.

Add to that a wider product selection in categories like home-entertainment electronics, toys, sporting goods, music, books, video games, personal computers, appliances, houseware, apparel, and health and beauty aids, among others. An online pharmacy will be added later this year.

But more critical to customer retention, the new Wal-Mart.com is more personalized. Consumers can create a "My Wal-Mart" page to include shopping records, receive gift and toy suggestions, comparison shop between three selected products, create wish lists, and register for e-mail reminders of birthdays and other important milestones.

Wal-Mart claims its new site has undergone heavy in-house testing. More than 850,000 store sales staff sampled the site starting mid-October. A group of randomly chosen customers who shopped at Wal-Mart.com before Sept. 1 joined in this beta test in November.

Wal-Mart, Bentonville, AR, is blatant about one thing: It wants more business from the 90 million to 100 million weekly customers shop at the nearly 3,000 Wal-Mart stores nationwide.

"We want to be the first choice for our customers, whether they are shopping online or in our retail stores," said Melissa Berryhill, spokeswoman for Wal-Mart.com.

"[Wal-Mart.com] is not trying to differentiate itself from other online retailers [but] is trying to bring traditional Wal-Mart shoppers to continue the online experience," Cooperstein said.

"It's people who, when they go to the Web, don't want to surf for a store; they want to go right to a store they're familiar with and buy through a different mechanism," he said. "That's what having Wal-Mart online provides."

Though Wal-Mart is still working on its marketing plans, preliminary groundwork for leveraging its vast terrestrial presence is already underway. Wal-Mart will advertise the site in store ad circulars and on signage.

Also, customers who can't find a particular product may be asked to go online to the Wal-Mart site. Conversely, online customers who can't locate a product can inquire by e-mail about its availability in a nearby Wal-Mart store. Kiosks linked to Wal-Mart.com soon will appear in 50 company stores, followed by others.

There are currently no plans to offer same-day delivery, but Wal-Mart.com returns will be accepted in stores.

Last month, Wal-Mart.com got another leg-up through a deal between its parent Wal-Mart Stores and Internet service provider America Online Inc.

Wal-Mart stores will distribute the new AOL 5.0 software that includes a link to Wal-Mart.com. The Wal-Mart site will also be featured in the Shop@ areas across America Online's service.

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