Advantages of walmart purchasing established web businesses
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Read the following case study and answer the questions that follow. Respond to at least two of your peers with meaningful content.
Walmart Gets Serious about E-Commerce
As the world's largest retailer, Walmart has built thousands of brick-and-mortar stores in the United States, Mexico, and elsewhere. Although a success story when it comes to traditional retail locations, Walmart has struggled with its e-commerce efforts, with recent online sales accounting for about 3 percent of the company's $300 billion in annual sales. The company has tried several different e-commerce strategies in the past, but none of them was an overwhelming success. Some company insiders objected to the pricing strategy used for online purchases; they were fearful that Walmart's lower prices online would take customers (and sales) away from the retail locations.
Doug McMillon, Walmart's CEO since 2014, believed a significant change was needed in the company's e-commerce business, and he recently made changes in a big way. Over the past two years, Walmart spent billions to acquire several online companies to expand its e-commerce business in an effort to take a small bite out of retail giant Amazon's success. In 2016, Walmart purchased Jet.com, an e-commerce site that sells a little bit of everything (books, clothing, electronics, etc.) at discount prices. Once the $3 billion acquisition was completed, Jet's co-founder and CEO, Marc Lore, who now runs Walmart's e-commerce platform, worked with McMillon to identify other established online companies to add to their e-commerce portfolio and add they did.
First Walmart purchased footwear e-tailer ShoeBuy for $70 million in January 2017. The following month, Walmart bought outdoor specialty retailer Moosejaw for $51 million. Then in March, Walmart paid $75 million for ModCloth, an eclectic shopping site for women's fashions. Walmart is also said to be in negotiations to buy Bonobos, a hip fashion retailer geared to millennial males.
Reaction to the acquisitions has been mixed, depending on whom you ask. Retail analysts applaud the company's radical move, pointing out that several well-known traditional retailers have closed their doors or filed bankruptcy because they failed to take part in the e-commerce revolution. Fashionistas, on the other hand, are lukewarm about the move. However, McMillon's decision to allow online retailers to operate independently may help retain loyal customers. The new e-commerce strategy may also lure typical in-store shoppers to take advantage of the expanded offerings available through both Walmart.com and Jet.com.
Critical Thinking Questions
- What are some advantages of Walmart purchasing established web businesses?
- What impact is Walmart's acquisition of nontraditional retailers likely to have on the shopping habits of Walmart's customers?
- How will the aggressive e-commerce plan implemented by Walmart affect operations at its retail locations?
Reference no: EM132830796
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What impact is Walmart’s acquisition of non traditional retailers likely to have on the shopping habits of Walmart customers?
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Let's do rent sphere given a question that what impact is walmart's acquisition of nontraditional retailers likely to have on the shopping habits of walmart customers? Okay, so here we are supposed to know that it is a proper fact based question. We can directly state here that acquiring nontraditional retailers acquiring, okay, non traditional, non traditional retailers, expense. Product retailers expand, brought up, Okay, Product availability, visual availability, which is easily accessible to the easily excessive yeah, to the consumers using through the consumers using Orland shopping apps. Okay, Online shopping. Online shopping apps. Okay, students. So that's all about our final answer. Thank you.
Web development
Placement
Online placement is one of the areas that can either make or break an e-commerce venture. It makes no sense to have a fantastic website that users cannot find. In order to ensure proper placement, Walmart has hired technology gurus –Rajaraman and Harinarayan who were former Amazon employees.
The duo sharpened Walmart’s search engine optimization. They introduced a new search engine for the company that would translate customer’s queries into tangible results.
Before their employment in the company, a customer who typed ‘cotton socks’ would get results like cotton candy or cotton shirts and no socks (Manjoo, 2013). Therefore, streamlining internal processes to ensure fast response to customers’ searches was critical.
Placement of Walmart on Google searches has also been streamlined as the first six search results on Walmart USA are links to the company’s website. Walmart has also worked on a series of social media applications that analyze consumers’ profiles and helps them get gifts for their friends.
Merchandise and audience size
Walmart has taken advantage of its online platform to merchandise its products effectively. One way of doing this is displaying items on the basis of their appeal. Customers are likely to find the latest offers, in-demand and seasonal items first on the company’s webpage.
For instance, Easter gift packages are prominently on display now because the Easter holiday is around the corner (Walmart, 2013). Additionally, images contain descriptions, prices and necessary details to acquire the item. Price cuts and discounts are especially prominent in these descriptions.
It is quite easy to access other products sold at Walmart other than the ones on display. Every webpage has a link of product categories on the top left corner that customers can click and peruse. Besides these, the retailer takes advantage of cross selling by displaying related products alongside search items.
The firm’s search engine recommends story books to someone who wants to purchase a toy for their child. The firm also has a shopping cart that it uses to assess a client’s interests and makes recommendations on how they can improve their selections.
The check out page is quite clear such that customers can complete their transactions with confidence on the same (Walmart, 2013).
Presentation – online customer size
Walmart sells a range of household items that cut across a large spectrum of individuals. This implies that its customer size is as large as the online shopping market. Current statistics indicate that internet advertising cost about $72.18 billion in 2012. Therefore, the firm has a large market to reach through the internet.
It works on converting prospects to buyers through an effective presentation on its website. Clients could either be first-time visitors or current ones. These individuals can all find the right information easily on their website. Additionally, the firm refrains from placing too much clutter on its website.
Given the large customer size, having a direct option for completion of transactions is essential in the success of its e-commerce venture.
Therefore, Walmart makes it easy for non members to buy items without having an account. Account users also navigate the company’s website easily through a streamlined process (Walmart, 2013).
Payment
When selecting a payment system, one must consider what one sells. Walmart sells multiple items, so a shopping cart was ideal for such an arrangement. It considers shipping costs and includes those charges in the final payment (Walmart, 2013).
One must also consider the popularity of online payment methods as it is pointless to have methods that no one will use. Walmart uses credit and debit cards, Bill-me-later and PayPal as its key methods. It selected such platforms because they are popular and relatively inexpensive (Laudon & Traver, 2007).
Security
The retail chain has a privacy policy that details how it handles information. For instance, it does not sell information to third parties. However, it may share it with supply chain partners who need to enable effective consumer transactions (Walmart, 2013).
The information can also be used to market other products. It secures other privileged information on well protected servers. After a sale, Walmart authenticates the sales transaction through an email.
Fulfillment
Walmart has worked on improving its ability to fulfill orders in the e-commerce world (Rayport and Jaworski, 2004). It now has a same-day shipping program that mirror’s online giant Amazon. Furthermore, repeat online clients are increasing in number owing to the transparency, support and speed of online transaction.
Four infrastructures of e-commerce
This retail giant has also taken advantage of media, capital, technology and public policy infrastructure to boost its e-commerce effort (Rayport & Jaworski, 2004). For instance, it has dependable servers that handle the large volumes of transactions that take place on a daily basis.
It has invested in a lot of software to optimize customer experiences. One such case is the use of technology to tap into the social media world (Manjoo, 2013). With regard to capital, the company has organized its budgetary systems in a manner that gives the online aspect as much financial support as is necessary.
Walmart also takes advantage of media infrastructure in order to boost its stylistic and design interfaces. When one visits the company’s website, one will have no problem in identifying what the company sells.
It is easy to deduce what the organization is about and how a client can benefit from it through choices on media infrastructure. Finally, the organization understands public policy infrastructure by setting up procedures that protect consumers during online transactions.
Online and brick and motor business model comparisons
Value propositions
The key value proposition for Walmart in its e-commerce portfolio is to give buyers access to their products at any time and in any location. The company believes that the internet is the future as seen through the rapid proliferation of smart phones and other devices (Manjoo, 2013).
If Walmart’s consumers are heading in this direction, then the company needs to follow suit. The organization perceives online retailing as a long-term strategy. Although it has only recently entered the e-commerce world, the retail chain plans on growing with its clientele.
The company uses both online and brick and motor models (Rayport & Jaworski, 2004). For instance, promotion of products occurs through the traditional media channels.
Retail outlets are part of the distributional system in e-commerce. However, it also markets products on the internet and avails them in its stores. Both models coexist; although the online platform is yet to catch up.
Online offering
The key offering in this technology platform is convenience (Laudon & Traver, 2007). Individuals can get whatever they require from the retailer at the comfort of their homes.
Certainly this works hand in hand with its brick and mortar system; that is everyday low prices. Therefore, clients get cheap commodities in a convenient way.
Resource system
Walmart has the largest supply chain and greatest income revenue in the retail sector. These have all been used to enhance the e-commerce platform. For instance, when shopping online, clients have the option of picking the item from a brick and mortar store.
Since there are Walmart stores in 20 mile-radii from every citizen in the country, then online sales can be revamped in this way.
The organization also uses its strong revenue base to hire top IT talent for its e-commerce portfolio. Revamping an online shopping experience takes a lot of monetary resources, of which the company has plenty.
References
Laudon, K. & Traver. C. (2007). E-commerce: Business, technology and society. NY: Prentice Hall.
Manjoo, F. (2013, January 13). Walmart’s evolution from big box giant to e-commerce innovator. Fast Company, 22.
Rayport, J. & Jaworski, B. (2004). Introduction to e-commerce. NY: McGrawhill Companies.
Walmart (2013). Walmart Homepage. Web.