The below article from Reuters shows Walmart's latest effort to belatedly enter the dot com side of business vs. physical stores, i.e., "clicks vs. bricks." Walmart is finally making a small dent, but will it be enough or too little too late? With this effort, I give Walmart a thumbs up b/c it has found a white space of customer, i.e., the lower income consumer who is surfing online but isn't buying since (s)he prefers cash (or doesn't have the income, credit, etc. to use debit or credit--or may not trust this form of purchase). It looks like Walmart's effort to redo its online search has also paid off. Finally, I found the trend of "showrooming" an excellent example of how digital media is forcing retailers to modify their sales methods. Do you agree?
Article TEXT:
Wal-Mart Stores Inc is seeing a sales lift from new efforts to get
more shoppers buying online while still visiting physical stores, Joel
Anderson, chief executive of Walmart.com, the ecommerce arm of the world's
largest retailer, said on Wednesday.
Wal-Mart launched Pay with Cash in late April, allowing customers
to order on its website and pay at a store within 48 hours.
The program, aimed at getting more Wal-Mart shoppers with limited
access to credit online, has had a strong start, Anderson said at the Internet
Retailer Conference & Exhibition in Chicago.
Pay with Cash now accounts for almost two percent of all online
orders and 30 percent of these customers are new to Walmart.com, Anderson said.
The size of Pay with Cash orders is 50 percent larger than the
average online order, according to Wal-Mart.
When Pay with Cash customers come into a Wal-Mart store, about 40
percent of them end up paying with a card or some other form of non-cash
payment, Anderson also noted. That suggests a lot of Wal-Mart customers are
still concerned about using credit and debit cards online, Anderson said.
Wal-Mart also launched a new search engine on its website earlier
this year. Since then, the company has seen a "double digit" increase
in conversion - a measure of how many shoppers end up buying something after
searching for a product, Anderson said.
Wal-Mart and many other retailers are scrambling to keep up as
more consumers shop online at Amazon.com Inc, eBay Inc and other e-commerce
destinations.
The increasing popularity of smart phones is hastening the shift
online as shoppers check prices and availability of products sold by online
rivals while they are in stores.
This trend, known as showrooming, worries a lot of retailers and
is a big topic of discussion at this year's Internet Retailer conference.
Anderson said Wal-Mart is tackling this threat by trying out new
mobile technology that lets customers use smart phones a lot more in stores.
"It's happening and we're embracing it," he said in an
interview with Reuters.
Wal-Mart's online sales are still a small fraction of its total
revenue. However, Anderson said mobile transactions are growing a lot and often
do not show up in traditional e-commerce data, which typically measure Web
activity only.
Even Wal-Mart's most "economically challenged" customers
are gaining access to Internet connections now because they are giving up home
landlines in favor of cell and smart phones - a trend that is helping increase
mobile sales inside and outside of stores, Anderson said.
During a presentation at the Internet Retailer conference,
Anderson showed a video highlighting some of the new mobile technology Wal-Mart
is using and testing.
One scene showed a customer scanning products with a Wal-Mart app
on their smart phone and checking out with the device.
Mobile checkout may help Wal-Mart reduce labor costs and cut
shopping times for customers.
Last week, Neil Ashe, president and CEO of global eCommerce at
Wal-Mart, told analysts the company will test mobile checkout later this year.
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