Wal-Mart Enters Amazon Territory
Discount retailer Wal-Mart Stores, Inc., which has already made competitive inroads on consumer electronics retailer
Best Buy and the
supermarket vertical in general, now appears to have internet retailer Amazon.com in its crosshairs. Wal-Mart
today launches Walmart Marketplace, a new program that expands its online product assortment to more than one million items.
Walmart Marketplace enables a select group of retailers to offer additional products at Walmart.com, expanding Wal-Mart’s assortment in categories including home, baby, apparel, and sporting goods. Wal-Mart handles purchases through its proprietary online checkout process and the retail partner manages and support the order, including shipping and handling, customer service, exchanges and returns. Retail partners include department store retailer CSN Stores, luggage retailer eBags, and specialty sporting goods retailer Pro Team.
Wal-Mart, which says it will expand the Marketplace program next year, is using a model similar to one Amazon has used to expand its online assortment without taking on excess inventory. Amazon previously partnered with leading toy retailer Toys R Us on internet sales, and operates its
own program aimed at independent sellers looking to offer fixed-price goods next to Amazon goods.
While Wal-Mart remains the world’s largest retailer and reported a
small increase in U.S. net sales during its Q2 fiscal 2010, the retailer is actively seeking to increase product assortment and expand its reach to consumers. In addition to the aforementioned growth of its consumer electronics and supermarket business, this year Wal-Mart has also increased its number of self-service
DVD/video game kiosks. Although it does not represent an assortment expansion, Wal-Mart is also launching a new
sustainable product index designed to respond to increased consumer awareness of environmental issues and enhance the retailer’s brand image and public perception.
If Walmart Marketplace proves successful, it will be interesting to see if Wal-Mart follows Amazon’s footsteps in other areas of e-commerce, including offering site development, hosting and fulfillment services for other online retailers.
