Wal-Mart targets range of new sectors

20 October 2009

BENTONVILLE, Arkansas: Wal-Mart, the US retail giant, is expanding its activities in a variety of different areas, from selling more goods online to establishing its own mobile phone service, as it seeks to further drive growth during the downturn.

The discount specialist is argued to have been one of the few beneficiaries of the current financial crisis, as an increasing number of consumers trade down to cheaper products.

It has recently announced a major reorganisation of its website, despite already having the second most-popular retail portal in the US, after Amazon.

This process has included adding baby products, cosmetics and medicines to the list of goods it delivers direct to customers, as well as offering millions of items from a wide range of other companies.

Raul Vazquez, ceo of Walmart.com, said "in a few months, whenever someone thinks about buying diapers – in the same way they think about going to a Wal-Mart in the physical world – they will think about going to Walmart.com."

"Eventually, we'll be the biggest in sales and the biggest in mind-share and all of those other things that we've established in the offline world."

In an effort to further strengthen its bricks-and-mortar operations, Wal-Mart has also hired a new managerial team to run its Neighborhood Markets arm.

These smaller-format stores, which are around 25% the size of its Supercenters, are targeted at urban areas, and aim to offer a more localised approach.

In the last month, the Arkansas-based firm has also begun to sell more than 100 toys for around $10 (€6.69; £6.10), as it seeks to boost sales through the non-food category.

Similarly, it will slash as much as 60% off the price of a number of newly-released hardback books later this week, some of which will be available for under $10.

With regard to the grocery segment, Wal-Mart has previously announced its intention to further develop its private label range.

Despite this, it is also now stocking more premium items, like Apple'siPod and a Miley Cyrus-branded fashion range, as it seeks to cover all price points relevant to consumers.

In the mobile market, the US corporation forged a tie-up with TracFone Wireless, part of Mexico's América Móvil, in mid-October.

As a result, it will roll out an offer to 3,200 of Wal-Mart's outlets, enabling consumers to buy 1,000 pre-paid minutes for just $30.

Craig Johnson, president of Customer Growth Partners, the research firm, said "clearly they are more aggressive and they will cede no ground to the competition, whether it's the Best Buy's of the world, or Toys "R" Us or ... Amazon."

Johnson added that Wal-Mart's share of the US retail market has grown by 0.85% since the start of this year, to 11.3%, a "huge increase ... given the glacial changes that occur at the macro level."

Data sourced from Reuters/Financial Times; additional content by Warc staff