Wal-Mart Targets Amazon, eToys for Holiday Rush

Retail powerhouse Wal-Mart Stores, Inc. (NYSE:WMT) has taken direct aim at eToys and Amazon.com by focusing its redesigned Web site on toys, books and consumer electronics.

The company also indicated Friday that it is still considering entering the online auction business through its Sam’s Club site. The site is based on Wal-Mart’s Sam’s Club warehouses.

The new moves come as the company prepares for the 1999 Christmas season, which is expected to produce $12 billion (US$) in online consumer sales. Wal-Mart spokesperson Melissa Brown said that the site will also offer Christmas decorations and holiday items.

According to Brown, customers will soon be able to “personalize the site, putting in their zip codes to get specific information about Wal-Mart stores in their area.” Internet visitors will be able to obtain information about inventory and sales in local stores, while store shoppers will be able to access Wal-Mart’s Internet site from computer kiosks in the company’s stores, blending online and offline merchandising.

Internet Retailers Brace for Wal-Mart’s Moves

Rumors have been flying for months about Wal-Mart’s plans for its Internet operations. Industry analysts expect Wal-Mart to change the online retail business as the company brings its customer-service expertise and buying power to the Internet.

Wal-Mart has been online since 1996, but its recent strategic alliances with Books-A-Million and Fingerhut substantiate the view that Wal-Mart has plans to become a major force in online retailing. These moves also indicate that the company “gets it” on Internet retail operations.

Fingerhut and Books-A-Million Alliances

Books-A-Million, the third largest U.S. book retailer, will become the exclusive provider of books and related products to Wal-Mart’s online customers. “Our customers will have access to hundreds of thousands of books at our every day low prices,” said Glen Habern, Wal-Mart’s Senior Vice President of New Business Development.

Fingerhut, a direct marketing company, will handle Wal-Mart online orders and ship products to customers. These two alliances are part of Wal-Mart’s overall strategy to improve its online operations and to focus upon customer service. To industry insiders, the relationships show that Wal-Mart has a strong understanding of what it takes to build a successful Internet retail operation, strong customer service, low prices, large selection, and expert fulfillment.

Wal-Mart Stores, Inc. operates 2400 stores and 450 Sam’s Clubs in the United States. Internationally, the company runs more than 725 stores. The company employs over 815,000 people worldwide and has held the position of top world retailer since the early 1990s.

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