newprotest.org: WALMART VS. AMAZON

WALMART VS. AMAZON

September 20, 2006
by: jovial_cynic
What is it about food and toilet cleaning products that makes a person more inclined to shop in a physical store than through an online retailer?

With books, music, and movies, the longtail effect is easily understood and accepted, because those kinds of things are typical online purchases. But something stops us short of buying underwear, soap, toothpaste, and a box of Tide detergent online, even though there's no need to "try them on" in the way required if you were buying a new coat or pants.

Is it the item-cost/shipping-cost relationship? Is it because we're only buying toilet paper because we ran out today, and can't wait for shipping? If we overcome whatever might be the issue, is online retail of this nature a viable business?

John Fleming, chief marketing officer for Walmart, doesn't seem to think so. Instead of working towards a stronger online retail presence, Fleming wants to utilize walmart.com to drive more traffic to the store, stating that the online presence is "more of tool to drive loyalty than a key engine of commerce."

Walmart's online store generates a fraction of Amazon.com's revenue of $10 billion, but Walmart itself pulls in $300 billion, making competition from Amazon "meaningless," as Fleming stated at AMD's recent Global Vision Conference.

It's hard to say that a $300 billion company is making poor financial decisions. And it's hard to say if the online market drives traffic away from the physical stores, or if it just causes people to buy more goods and services in additional to their in-store underwear and soap shopping. If that's the case, Flemming is on the right track... but if not, Walmart's revenue is certainly going to show it.
np category: corporations
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COMMENTS for WALMART VS. AMAZON


Mark Glesne said:
FYI: 'towards' is not a word.

Just keeping you on your toes, Cynic!

September 20, 2006


jovial_cynic said:
ahem.

The good folks at Merriam-Webster disagree with you.

:)

September 20, 2006


Mark Glesne said:
Blasted! Haha.

While my college journalism background disagrees, even Dr. Grammar believes you can use either (although toward is more common in American English).

More proof that a college education gives you little knowledge today.

September 20, 2006


jovial_cynic said:
Well, I think that "towards" is incorrect when you're using certain style guides, and I believe professional journalists (whatever that means) are supposed to stick to the AP style guide. Your college education was probably correct, but you may have framed the information improperly. It's correct when applying the AP style guide.
September 20, 2006


Kristen said:
Perhaps Wal-mart is trying to protect its "impulse" buys. Most people say they can't go in to a WM store without buying something. That's actually one reason why some penny-pinchers are willing to do a lot of online grocery shopping, even with the delivery fee and occasional tip: it keeps them within their budget and away from impulse buys.
September 21, 2006


jovial_cynic said:
I hadn't considered that. If Walmart is banking on those "impulse" buys, it would absolutely make sense to drive as much traffic to the stores as possible.

On the other hand, people who shop online a lot are just as susceptible to those same impulses.

September 22, 2006


betmo said:
i can only speak for myself- i love amazon- i would shop online all of the time because i hate crowds. i don't love the shipping and handling though. that's it in the nutshell. i usually shop at target when i can because i loathe wal-mart. so john can put that in his pipe and smoke it.
September 24, 2006


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