Third Time?s a Charm for Walmart.com?

For a bricks-and-mortar monster like Wal-Mart Stores Inc., online sales amount to only a drip in the budget.

But with shoppers becoming more high tech, the world’s largest retailer doesn’t want to lose out on Internet sales, which may soon become a major retail sector.

Media Metrix of New York, which measures Internet use, said about 38 million have shopped online with one retailer or another in 2000. That’s about half the number of adults who shopped at Wal-Mart stores in October.

Wal-Mart wouldn’t reveal how much its $165 billion in revenue last year could be attributed to online sales, but Walmart.com was important enough for the company to take it through an overhaul this fall.

From 1996 until this past October, Wal-Mart was basically lost in cyberspace. In 1996, the company launched a bare-bones Web site that was largely ignored by shoppers. Wal-Mart started revamping the site in the fall of 1999 but had trouble getting goods to customers by Christmas. In January, Wal-Mart unveiled its renovated site to a collective yawn from Web site reviewers, who said it wasn’t user-friendly.

Then Wal-Mart got serious. The company hired Jeanne Jackson, former head of Gap Inc.’s Banana Republic division, as CEO of Walmart.com, a joint venture between Wal-Mart and Accel Partners of Palo Alto, Calif.

After closing the site for a month, Wal-Mart reopened Walmart.com on Halloween to mixed reviews. With some 500,000 items in 12 categories, the site contained more books, compact discs and videotapes than before. Gone were many consumable items that weren’t really profitable to sell over the Internet, such as plastic pocket combs and 78-cent pencil sharpeners.

Even though the site was closed for all but four days of October, Media Metrix ranked it fourth for the month among retail department stores with 1.6 million “unique visitors” — the number of people who visit the Web site, regardless of how many times they visit. Walmart.com trailed behind sites operated by J.C. Penney, Sears and Target, in that order, with J.C. Penney clocking 2.7 million visitors.

In contrast, Amazon.com, which is not classified as a retail department store, led the Internet shopping category with 17.3 million visitors in October.

Jane Jung, a spokeswoman for Media Metrix, said the study was based on computer users trying to log on to the Walmart.com site, whether it was up and running or not. So shoppers may not have known the site was down for the month until they tried to log on for the first time in October. Or, perhaps the site was inundated with computer users trying to check it out when it reopened Oct. 31. Or, maybe regular shoppers just wanted to surf by and rattle the door.

In any event, that’s 200,000 more visitors than Media Metrix monitored for Wal-Mart in September, when the old site was still in operation.

Although Wal-Mart said the new site was faster and easier to navigate, reviewers said it wasn’t much better than the old site and it bogged down too often.

Cynthia Lin, a spokeswoman for Walmart.com, attributed the problem to the first-day rush of computer users logging on to the site.

The Jungle

Since that time, apparently, the rush has subsided a bit and things are running smoothly. The Washington Post recently wrote that Walmart.com was in position to give Amazon.com serious competition.

“Move over, Amazon.com, the big boys of retailing are finally online in a big way,” read the Nov. 15 headline at washingtonpost.com.

“Home page is a no-nonsense directory — boom, you’re there; deep, deep inventory; super-enlarged pictures of items; cheap gift wrap and shipping,” says the review of Walmart.com. “If Amazon hears heavy footsteps behind it, here’s the 800-pound gorilla making the noise. Relaunched two weeks ago, this is the whole superstore, minus the laundry detergent and paper towels, online.”

The only negative the reviewer could come up with was that the site is “almost overwhelming in size.”

Initially, many analysts and publications rushed to criticize Walmart.com for closing the site so close to the Christmas shopping season. To cybergeeks, the move clanged like a death knell.

Computerworld magazine quoted Gene Alvarez, a retail analyst at Meta Group Inc. in Pleasanton, Calif., as saying that the folks at Walmart.com must be insane.

“Shutting your site down in the 95 days before Christmas — you’re out of your mind,” Alvarez was quoted in the Oct. 9 issue as having said. “Two-thirds of the business for retail occurs during that 95-day period.”

Since Computerworld misspelled the name of Lin, the Walmart.com spokeswoman, the accuracy of the rest of the article could be contested.

In a Nov. 6 article, InformationWeek, the information technology trade publication, said the unprecedented closing was a good thing. InformationWeek basically said that those who live in cyberspace shouldn’t throw bricks and mortar.

“I take this whole Wal-Mart exercise as powerful and welcome evidence that some degree of common sense and balance is flowing back into the business world …, ” said the InformationWeek review. “Now we see one of the world’s most successful companies bucking all that artsy-fartsy nonsense and saying, ‘Our Web site is not as good as our customers deserve, and it doesn’t do all the things we want it to be able to do for our customers, so we’re going to shut it down, fix it, and then reopen.’ The new site is indeed open for business — understated, easy to use, unglitzy, organized. Not at all unlike a Wal-Mart store.”

InformationWeek said several analysts had viewed the Web site makeover in the proper perspective. Before the relaunch, InformationWeek quoted e-business strategist Carol Baroudi: “People seem to think the world will stop if they [Web sites] go away for a while. But the world will go on.” Chris Newton, an e-fulfillment analyst, said: “Retail stores do this all the time. You walk down the street and see signs that say the store is closed for remodeling or inventorying. Customers get used to it.”

The Home Site

Lin said Wal-Mart purchased HomeWareHouse.com in July and shut down Walmart.com to move the site to that platform.

“We’re moving to an entirely new technological program,” she said. “It offered advantages. Our focus was making this site as usable as possible. That means making the site design clean and clear, making it easier to navigate, making it easier to search for products — all in all, just making it a more user-friendly site.”

And the selection is also somewhat different.

“Basically, it’s the same core assortment,” Lin said. “What we’ve done is we’ve gone deeper into some categories, like books, music and videos.”

Although some critics say few of Wal-Mart’s customers own computers, Lin said that of the 69 million adults who shopped in Wal-Mart stores in October, 37 million were Internet users — but not necessarily Walmart.com shoppers.

“Quite simply, we just want to be where our customers are, whether it’s online or in the stores,” Lin said. “For those people who don’t have a Wal-Mart nearby, Walmart.com gives them access to Wal-Mart at those prices.”

The new site was criticized for having different prices in some cases from those of the stores, but Lin said those cases were few. If a customer buys an item online and wants to return it, he or she may do so at a Wal-Mart store and receive the purchase price for the return, Lin said.