Wal-Mart has invested more than US$300M in online retail since May in attempt to combat Amazon; retailer piloting WiFi at stores, will unveil program to allow people to buy items online, pay with cash at store

Cindy Allen

Cindy Allen

Mar 21, 2012 – Industry Intelligence

LOS ANGELES , March 20, 2012 () – Since May 2011, Wal-Mart Stores Inc. has invested in excess of US$300 million in order to combat Amazon.com Inc., Bloomberg reported March 20.

According to research firm Kantar Retail LLC, approximately one-fourth of Wal-Mart’s customers also shopped at Amazon five years ago. In 2012, roughly half of Wal-Mart’s customers reportedly also are shopping at Amazon.

In 2009, 59% of holiday shoppers purchased items at Wal-Mart. In 2011, only 53% of holiday shoppers bought items at Wal-Mart, the top holiday shopping destination. According to Kantar, over the last three years, the percentage of holiday shoppers that purchase items at Amazon increased from 38% to 46%.

Kantar analyst Anne Zybowksi predicted that Amazon could be the top holiday shopping destination as early as next year. Amazon is currently the second most-popular holiday shopping destination.

During the 2011 fiscal year, Wal-Mart posted a revenue growth of 8%, while Amazon’s full-year revenue grew 41%.

@WalmartLabs Chief Technology Officer Jeremy King noted that his biggest issue would be to play catch-up in terms of Internet retail.

Wal-Mart has traditionally lagged behind its competitors in the e-commerce sector.

Amazon can offer cheaper prices on some items, particularly since in many states Internet retailers are not required to pay sales tax.

Walmart.com U.S. President Joel Anderson said that Wal-Mart has an advantage over Amazon in that customers can order an item on-line and then pick it up the same day in-store. More than half of Wal-Mart’s online shoppers collect their items in-store, he added.

Recently, Wal-Mart has gone on an acquisition and hiring spree to improve its Internet operations. It purchased Small Society, an iPhone app creator, and social-media firm Kosmix and has hired in excess of 200 people.

In April, Wal-Mart intends to unveil a program that will allow customers without bank accounts or credit cards—20% of the retailer’s customers—to buy items online and pay in cash at closet Wal-Mart store.

Wal-Mart is running a pilot WiFi program at some of its stores, and has begun selling some of its more expensive products exclusively online.

The retailer is also working on a pilot “Endless Aisle” program that will allow customers to order items via smartphone in a desired color or size that is not currently in stock at the Wal-Mart store.

The primary source of this article is Bloomberg, New York, New York, on March 20, 2012.

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