August 17, 2011, 10:31 AM
Blogger

No wonder Wal-Mart’s shaking up its global e-commerce team

Don Davis

Editor in Chief

Selling to the world becomes possible via the Internet, and some retailers have figured that out sooner than others. Among those who have grasped the opportunity are Amazon.com Inc. and Apple Inc. Figures released today by web tracking firm comScore Inc. show that Amazon gets nearly 65% of its global web site traffic outside of North America, and Apple 68%. By contrast, Wal-Mart Stores Inc. sells online mainly to customers at home, with 83.4% of visits coming from North American consumers.

Relying on U.S. consumers isn’t working out too well for Wal-Mart, as same-store U.S. sales have now declined for nine quarters in a row, and recent surveys show most Wal-Mart shoppers no longer believe the world’s largest retailer by total sales offers the lowest prices.

Wal-Mart clearly has to step up its game outside of North America, including doing a better job of reaching overseas consumers via the web. These comScore numbers show how far Wal-Mart is lagging. And the big shakeup of Wal-Mart’s global e-commerce team, including the departure of former Walmart.com chief Raul Vazquez, suggests that Wal-Mart’s board is getting the picture. Other signs include Wal-Mart’s purchase of a stake in a major Chinese online retailer earlier this year, quickly followed by announcement of a plan to build a major e-commerce headquarters in Shanghai and to work with China’s government to spur web shopping. And Wal-Mart has built a strong base in the U.K., both offline and online, with its Asda supermarket chain that also sells general merchandise. Asda has a significant online operation, generating 650 million euros ($943 million) in web sales last year by Internet Retailer’s estimate, and is No. 18 in the Internet Retailer Top 300 Europe.

These moves at least show Wal-Mart’s management is aware there’s a problem; whether they know how to solve it remains to be seen. They certainly have a long way to go to catch up with Amazon globally—Wal-Mart’s web operation is even further behind in the rest of the world than it is in the U.S. That also shows up in today’s comScore figures, which show that Wal-Mart’s global traffic, in terms of monthly unique visitors, is only 16% that of Amazon’s global sites. In North America, Walmart.com gets 30% of Amazon.com’s traffic. That’s still a sizable gap, but far less than the deficit overseas.

Wal-Mart didn’t get to be the world’s biggest retailer by being stupid. But its management is going to have to get a lot smarter about the web, especially overseas, if it wants to hold onto that top spot in global retailing as more shopping shifts online.

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