Will Walmart.com's Slow and Steady Improvements Win the Online Retail Race?
Is Walmart a threat to Amazon? Back in 2000, BusinessWeek reported that the race between the two companies wasn’t even close, as Walmart.com lacked Amazon’s key features that made online shopping fun and easy — namely, simplified site navigation, customer reviews, product recommendations, and a wide inventory selection. But a lot has changed since then. Walmart.com has since made incremental but significant improvements. For example:
In 2006, it underwent a major redesign, which among other things speeded up its checkout process (less than four clicks to product checkout from any starting point).
In 2007, it enabled customer reviews and ratings. It also linked to a newly-created company blog (checkoutblog.com), to give shoppers a first look at upcoming products, explain the company’s purchasing decisions and seek buyer feedback.
In 2008, it launched ElevenMoms.com, featuring videos and money-saving tips from influential mom bloggers by showcasing them on the site as well as linking to their individual blogs. While the women aren’t paid, the company updates them on new developments and suggests products for them to review.
It also created a “Connect & Share” community-building section. Currently in beta, the section includes customer stories, a customer Q&A exchange, and topics such as healthy living, meal recipes, environmental tips, etc.
In June, it partnered with richrelevance, which provides personalization and product recommendation tools for online retailers. (Note: richrelevance was founded by David Selinger, who formerly led personalization research and development at Amazon.com.)
And like Amazon, just last month, it opened up its doors to third-party sellers like CSN Stores, eBags and ProTeam.com. The move added nearly one million new items to the site’s inventory, with plans to add more retailers and products in the future.
These are all good improvements, but are they enough to challenge Amazon.com? Media and technology blog All Things Digital says maybe one day, but not for now. The reason? Walmart.com is still way behind when it comes to sales numbers, and will need time to catch up. Indeed, trade magazine Internet Retailer says Walmart.com took in sales of only $1.7 billion in 2008, compared to market leader Amazon.com’s $20 billion.
Imran Khan, an analyst at financial services firm JPMorgan, says eBay.com may actually be the online retailer most at risk by Walmart’s latest improvements. This is because much of eBay’s revenue relies on third-party sales and they can’t afford to lose sellers to other platforms like Walmart.com. Amazon.com, says Khan, still has an edge in terms of inventory size and fulfillment options. (It offers fulfillment services to third-party retailers, which both Walmart.com and eBay currently lack).
Walmart, however, still has unique strengths it could use against Amazon — such as free in-store pick-up of online orders. “While Walmart has had mixed success online, it established a clearly differentiated, strong multi-channel position for itself upon introducing the site-to-store services two years ago,” said Sucharita Mulpuru, an analyst at market research firm Forrester Research, in an interview with DMNews.com.
Indeed, Walmart.com may be lagging for now, in terms of sales and user traffic. But if it continues to ape Amazon.com’s strengths while capitalizing on its unique advantages, such as site-to-store service, the company’s tremendous buying power, promotional opportunities in its brick-and-mortar stores around the globe, etc., it just may have a chance to eventually catch up — if not overtake — Amazon in the online retail race.
