Page 146 - Electronic Commerce

Selling on the Web

After eight months of operating the new Web site, Walmart found itself with low
levels of customer traffic (well below those of its major rivals J.C. Penney, Sears, Kmart,
and Target) and high levels of criticism from Web site design experts who found the site
slow, difficult to use, and lacking customer service features. 121
In October 2000, Walmart closed the site completely for four weeks. Earlier in the
year, it had created Walmart.com, a joint venture with Accel Partners to develop a new
Web site, but the new site was not ready to launch until November. Industry analysts
widely criticized Walmart’s decision to completely shut down its Web operations for
such a long time period at the beginning of the holiday shopping season.
The new Web site was a vast improvement over the old site; much better organized
with improved browsing and search functions. The site offered about the same number
of items as the previous site (about 500,000 items; several times more than what the
physical stores carry); however, the newer site had more consumer electronics, toys,
and sporting goods with fewer offerings of consumable products. Walmart also created a
separate distribution center to serve Walmart.com exclusively.
A decade later, Walmart’s online operations were once again in the news. In 2011,
industry analysts estimated that Walmart.com was the sixth-largest online retailer in
North America and noted that this was not a particularly impressive showing for the
world’s largest retailer. Later that year, the company announced that it was ending sales
of music downloads after failing to compete successfully against Apple’s iTunes store and
that two of its top online executives were leaving the company. In the wake of these
developments, Walmart announced a major reorganization of its online operations in
North America, the United Kingdom, and Japan to better integrate online and physical
store operations. Online business managers now report to retail operations directors in
each country rather than to a global e-commerce director. After more than 10 years,
reversed its 2000 strategy of separating these operations.
Walmart’s experience is a testament to how difficult it can be to get Web retailing
right. Success eluded the largest retailer in the world for years. Walmart is estimated to
have spent hundreds of millions of dollars on various Web implementations and product
distribution strategies since it began selling online, however, industry observers believe
that the company still has not achieved its full online potential.

Using Multiple Marketing Channels
Having more than one way to reach customers is often a good idea for companies, as
Montgomery Ward and Sears found out many years ago. They used one channel (retail
stores) to reach urban customers and another channel (mail order catalog) to reach rural
customers. Each different pathway to customers is called a marketing channel.

Copyright 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.