Wal-Mart Gears Up Online as Customers Defect to Amazon [WMT]

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#1
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14:17 20/03/2012
Wal-Mart Gears Up Online as Customers Defect to Amazon

Bloomberg - Wal-Mart Stores Inc.’s (WMT) customers were latecomers to online shopping. Now increasingly they’re trolling for deals at Amazon.com Inc., (AMZN) putting pressure on Wal- Mart to fix its lagging e-commerce operation.

Five years ago, the world’s largest retail chain didn’t have to worry much about the world’s largest online mall. After all, only about a quarter of Wal-Mart customers shopped at Amazon, according to data from the research firm Kantar Retail. Now half say they do. 

 

That’s changing as two trends converge: Wal-Mart’s traditional customers -- bargain hunters making less than $50,000 a year -- are getting more tech savvy, and less-strapped shoppers who began frequenting Wal-Mart during the recession are now rediscovering Amazon, said Bryan Gildenberg, a Kantar analyst based in Glen Ridge, New Jersey.

 

Continue: http://www.bloomberg.com/news/2012-03-20/wal-mart-gears-up-online-as-customers-defect-to-amazon.html

#2
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01:46 21/03/2012

Bloomberg - Wal-Mart Stores Inc.’s (WMT) customers were latecomers to online shopping. Now increasingly they’re trolling for deals at Amazon.com Inc., (AMZN) putting pressure on Wal- Mart to fix its lagging e-commerce operation.

Five years ago, the world’s largest retail chain didn’t have to worry much about the world’s largest online mall. After all, only about a quarter of Wal-Mart customers shopped at Amazon, according to data from the research firm Kantar Retail. Now half say they do. 

 

That’s changing as two trends converge: Wal-Mart’s traditional customers -- bargain hunters making less than $50,000 a year -- are getting more tech savvy, and less-strapped shoppers who began frequenting Wal-Mart during the recession are now rediscovering Amazon, said Bryan Gildenberg, a Kantar analyst based in Glen Ridge, New Jersey.

 

Continue: http://www.bloomberg.com/news/2012-03-20/wal-mart-gears-up-online-as-customers-defect-to-amazon.html

Few brick and mortar retailers have made a successful transition into e-commerce, due to the perception that shops without high street overheads will always be able to offer cheaper prices. However, I think that e-commerce has one big elephant in the room, and that is delivery problems. While people might not have the time to go to the shops, most people are not in a position to wait around at home for a delivery. If they need to go to a depot to collect the item, they could just as easily have gone to a shop and picked it up, and they wouldn't have had to wait for it in the first place. For this reason, I think e-commerce will take a hit when the economy recovers, and consumer impatience leads them back to the stores. However, Amazon's successful diversification into manufacturing with the Kindle means that they should be able to weather this storm if it comes.

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