Bentonville to Silicon Valley: Walmart Thinks Like a Start-up

Looks like Wal-Mart starts to strike back comprehensively since ecommerce giants are nibbling its big cake with a growing speed. No doubt, ecommerce is the future, but is there any conflict between traditional Wal-Mart (tWM) and e-Wal-Mart (eWM): will eWM cannibalize tWM? Who is the hero and who is the hero-support? Moreover, in the future, who are combo-Wal-Mart’s main competitors? Is it Target or eBay? Or both?

If eWM is the hero, to compete with ecommerce giants, eWM can provide lower cost and better customer services such as quick delivery and easy to return, so tWM will be a hero-support, in that case will tWM still need that huge market space to display products with decreasing in-store-sales? If tWM continues to be the hero, and eWM is the extension of its tradition domain, then the business hasn’t jump out of the old thought. The challenge for giant Wal-Mart, I reckon, is not from the outside, but from inside: how to control the two animals: tWM and eWM?

Personally, I would like to say that future belongs to the eWM. For durable products such as electronic products, Wal-Mart’s “everyday low price” doesn’t work well when it meets the challenges coming from ecommerce giants such as eBay or Amazon, even though they each have different focuses, but one advantage of ecommerce is low cost. From this point of view, Wal-Mart is no longer the king in the cost arena. Besides, ecommerce players provide more value-added services such as comparing different products, changing products’ color to preview, or reading reviews to make purchasing decision by simply clicking mouse at home. Online buyers take those services for granted, but store sale can’t afford. When online buying becomes a hobby (personally, after I order something online I have specific expectation in the following days: prolong the time for finishing the buying process ends up increase my satisfaction. Here “prolong the time” I mean “compared with traditional buying experience in which consumer will own the product right away”), it reframes people’s buying behaviors. Ecommerce will dominate the future by changing buying process from go-and-own-it to wait-and-own-it with the waiting time shorter and shorter, like the way Wal-Mart dominates the retail industry by changing the way people buying: pick up your products in big volume in a big warehouse at a low price with low frequency rather than buy product in a nearby grocery with higher price frequently. Wal-Mart will continue to be the game-rule-changer?

Lifa Huang of AR 5:36PM May 16, 2012