In its second-largest acquisition, Amazon buys the company for $970 million.
Ready to greet a tide of Internet newcomers, Wal-Mart unlocked the doors of its redesigned Web store on New Year’s Day. The redesign, in the works for much of last year, dovetails with the discounter’s plan to expand Internet access in rural areas via a partnership with America Online. In launching the new cobranded Internet service, the two companies intend to bring the Web-and Web shopping-to communities without Internet access: about 40% of the towns in which Wal-Mart has stores.
That could bring a wave of new value-hungry online shoppers straight to Walmart.com. To get ready for the new customers and boost appeal for those already shopping the site, Wal-Mart carried out the first major overhaul to the site since its launch in 19ù6. Industry observers consider the update a big improvement-and long overdue. “It looks like a real e-commerce site now,” says Matt Stamski of Gomez Advisors, Lincoln, Mass. “It’s a coherent site with proper taxonomy, so people can browse easily.”
The expanded site offers new departments for pet supplies, apparel and travel. Tens of thousands of new products bring total SKUs up to 600,000. Consumers can search the site globally by product or drill down to departments, navigating by text or a visual “floor plan” of the virtual store. New toy and gift finders help shoppers sort through merchandise by price, occasion and even the recipient’s characteristics. A “click and compare” icon lets shoppers pull up side-by-side product features for pricier items like audio equipment, while a wish list offers a place to make their own gift needs known to friends and family.
While customers shop, Wal-Mart is collecting data that it stores in each customer’s shopping history profile. Using a technique known as narrow-casting, the online retailer uses the data to personalize the site with items of interest for future visits. A customer who buys pet supplies on the site, for instance, will see the pet department front and center on future visits.
Adding these tools, which is standard practice among most Web retailers, is “a massive step forward” for Wal-mart.com, says Forrester Research analyst Seema Williams. Still, there are updates the site could have made but didn’t. “Search engines should no longer ask the consumer to insert ‘and’ or ‘or’ in a search,” Williams says. What’s more, global and local searches could be better linked: A global search for books by Danielle Steel turned up 73 titles, but the book department search yielded none.
The nation’s largest retailer has to walk a fine line between too much flash and features that make shopping easier. “Wal-Mart has a remarkably mainstream audience, while the overall Internet shopper tends to be higher-end,” Williams says. “Wal-Mart’s audience is just beginning to come online. Their established brand, linked with AOL, is a pretty powerful combination.”