A Giant Awakes – Wal-Mart.com

A Giant Awakes – Wal-Mart.com – Company Operations

Miguel Helft

After three tries, the king of bricks gets serious about clicks.

To understand the mind-boggling scale of Wal-Mart, consider the following: More than 100 million shoppers swarm the aisles of its 4,200 outlets in nine countries every week. The discount chain, based in Bentonville, Ark., employs 1.14 million workers. It sells 173 million pairs of shoes a year. During the holidays, it sold enough boys’ jeans to lay down a path of denim from New York to Denver.

And this year, the world’s largest retailer will get a new title: world’s largest company. Its sales are on track to exceed $200 billion — edging out General Motors, which has held the top spot in global capitalism for much of the past half century.

For all its outsize success, Wal-Mart Stores has suffered one notable failure: It hasn’t been able to get its online store off the ground. Now in its third incarnation since 1996. the company’s site has been plagued by a string of missteps and unfulfilled promises. But in 2001, it is finally poised to break out — not least because the ranks of Internet-only retailers have thinned in the last six months. The site also has picked up some financial and managerial oomph. Last January, Wal-Mart spun off Walmart.com into a separate company and, along with VC firm Accel Partners, pumped $100 million into it. Jeanne Jackson, then an executive at the Gap, joined as CEO shortly after.

Walmart.com went dark for a month this fall to undergo retooling and finally relaunched in November. But it still pales in comparison to the competition. It has fewer offerings and lacks the zip and useful features — consumer reviews, chats, events — of rivals like Amazon and Barnesandnoble.com. So it’s hardly surprising that Jackson is cautious, emphasizing that the goal for Walmart.com is not to score big numbers or take on Amazon.com — not yet, anyway.

Instead, she’s focusing on the basics, starting with a simple-to-use site. “Wal-Mart is about access,” Jackson says. “We want to give [consumers] goods at great prices … and have it be easy and reliable.”

Once it gets its Web technology in order, Walmart.com should be a formidable competitor. Despite its image as a seller of cheap socks and T-shirts, Wal-Mart enjoys instant brand recognition, caters to a broad swath of consumers and leads retailing in just about every product category Amazon offers — from consumer electronics, cookware and CDs to health and beauty products. In toys, Wal-Mart has displaced traditional industry leader (and Amazon.com partner) Toys “R” Us from the top spot.

Walmart.com also will be able to capitalize on its parent company’s buying clout and well-oiled back-office operations, which are the envy of the retailing world. And Wal-Mart’s sprawling infrastructure allows it to seamlessly connect its worldwide network of warehouses, trucks and stores. With those advantages, the online storefront is positioned to match the prices of its most aggressive competitors — and still turn a profit.

Paradoxically, Walmart.com might benefit from the slowdown that is hurting other online retailers. When times are tough, discounters tend to thrive. Says Jackson: “Every time there has been an economic downturn, Wal-Mart has gained market share.” Now it’s up to Jackson and her team to prove that what made Wal-Mart an offline giant can create an online success.

COPYRIGHT 2001 Standard Media International

COPYRIGHT 2001 Gale Group