Dot-com paces product expansion

Drug Store News, Jan 19, 2004 by Mike Troy

The Internet bubble may have burst several years ago, but according to Wal-Mart.com president and chief executive officer John Fleming, no one told customers.

During November and December, online retail sales, excluding travel and auctions, were forecast to increase between 25 percent and 30-percent to $12.1 billion and $12.6 billion, compared with the same two months a year earlier, according to comScore Networks, a company that monitors the buying activity of 1.5 million consumers. The company's data also indicates an increasing number of consumers are visiting Wal-Mart Web sites. During-November, traffic at Wal-Mart.com increased to 15.5 million unique visitors, placing it at 25 on comScore's ranking of the top 50 U.S. Internet properties. Throw in Samsclub.com and Wal-Mart's corporate site and the number of visitors totaled 17.2 million. By comparison, Amazon.com was ranked eighth with 40.7 million unique visitors while Target.com was ranked 42 with 11.7 million unique visitors.

"From the customers perspective, what we do is offer easy access to more Wal-Mart," Fleming said. "We expand what customers can do with Wal-Mart through information, selection and service. From a store s perspective we give Wal-Mart access to more customers."

Wal-Mart.com offers customers the ability to refill a prescription or obtain health care information in the pharmacy portion of the Web site. Beyond that, Wal-Mart's effort falls well short of more fully functional sites, such as those operated by Walgreens and These retailers offer customers the ability to have new prescriptions filled, and they sell health and beauty care products.

Wal-Mart.com doesn't offer those options--not yet anyway. Instead, what customers find is a hybrid one-stop-shopping experience akin to stores, but with a more selective assortment of categories, a differentiated product offering, innovative services and information to help them make more informed purchasing decisions.

For example, it is possible at Wal-Mart.com to purchase a 6.3 megapixel Canon digital camera, a $4,478 hot tub, a one-carat diamond ring in a platinum setting for $3,288 or Movado watches that are not available in-store. And for customers who need help making a decision, there are 20 different buying guides for products as diverse as global positioning satellite systems to bibles. On the other hand, being as Wal-Mart.com's strategy is about being selective and prioritizing opportunities, apparel is not offered on the site, though it was several years ago.

"We continue to evaluate it and when the time is right we will get back into it," Fleming said. "We are really building out a business at a time, focusing on it, getting it right, improving it for our customers, and then we will get to the next one. We have a list longer than my arm of business opportunities."

One of those opportunities is undoubtedly to broaden the slate of products and services related to health and pharmacy and narrow the gap that exists currently between WalMart.com and industry leading drug chains. Regardless of when that happens, there is no denying Wal-Mart.com has come along way since the late '90s when its online efforts frequently were the subject of ridicule. At the time, the company was considered a bricks-and-mortar dinosaur incapable of competing in what was labeled the new" economy. Wal-Mart teamed up with a high profile venture capital firm in early 2000 to accelerate the development of its online presence, located its offices in Silicon Valley and even considered the possibility of spinning off Wal-Mart.com in a stock offering so it could compete for talent with other organizations.

Wal-Mart.com still is located in the San Francisco Bay area with a dedicate buying team, but the thinking behind its online efforts has evolved considerably.

[The buying team] works very closely with their counterparts in Bentonville," Fleming said. "Three years ago, there wasn't a lot of communication. There was actually a fair amount of competition."