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Wal-Mart checks out new site
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December 30, 1999: 8:13 p.m. ET
Y2K bug, competition, no big worries for world’s No.1 retailer
By Staff Writer Rob Lenihan
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NEW YORK (CNNfn) - If you listen to the doomsayers, a digital Armageddon awaits us all when the clocks strike midnight on Friday and the Y2K bug comes out to dance.
So, of course, this is the perfect time for Wal-Mart Stores Inc. to launch its new and improved Web site.
Having sat out the mega-hyped 1999 online holiday shopping season, Wal-Mart, the world’s No.1 retailer, is launching its revamped Web site right at the start of a potential millennium maelstrom.
Company spokeswoman Melissa Berryhill in Bentonville, Ark. said Thursday everything is good to go.
"We have contingency plans in place,” she said. "We expect business as usual. For us, it will be another day at Wal-Mart.”
Okay, you’re ready to take off at this critical time. Then the million-dollar question goes something like this: Why?
"To make a big bang,” said Alan Mak, retail analyst with Argus Research in New York. "It’s sort of like Pizza Hut putting an ad on a rocket ship. Everything they’re telling us says that they’re Y2K compliant.”
"It shows just how confident they are,” said analyst Sally Wallick of Legg Mason Wood Walker in Baltimore.
Wal-Mart, which operates more than 2,400 stores and 450 Sam’s Club membership-only warehouses, announced plans to kick off the new site in October. While the company has had a Web site since 1996 and kept it going through the holidays, the redesigned site will offer many more products, personal shopping aids, a travel service and a photo service.
"For us, it will be another day at Wal-Mart.”
--Wal-Mart spokeswoman.
The discount retailing giant has been testing the new site since October and is also planning to set up kiosks in stores that will allow customers to log on to the site while they are in the store.
"We looked at the site as not being about e-commerce, but about commerce,” Berryhill said. "We want our customers to be able to shop when, how and where they want.”
With all this preparation, the company decided to take a pass on this year’s cyber Xmas shopping spectacular. Were they nuts? Analysts don’t think so.
Wallick said the seemingly slow-motion walk to the Internet is typical Wal-Mart—slow and steady.
"They’re at a point now where they can take what they’ve learned and they can do something more,” she said. "They can do something better.”
She noted that Wal-Mart (WMT) online sales represent a very small portion of the roughly $164 billion in total sales the company is expected to pull in for 1999.
Wal-Mart’s stock has been on the upswing
"Yes, they missed the holidays,” she said, "but a lot of other companies were online and they had real problems because they weren’t ready for the volume. Maybe Wal-Mart wasn’t so dumb.”
Mak concurred, noting that the average Wal-Mart customer, who has a household income of about $30,000 per year, was not clamoring for a new Web site.
"It’s Wall Street that’s been screaming and yelling for a Net effort,” he said.
Many of Wal-Mart’s shoppers do not have Internet access, and he pointed to the company’s alliance with America Online Inc. (AOL) announced earlier this month that will provide Wal-Mart customers with low-cost Internet access. Also, Mak said, many do not have credit cards, which are essential to online shopping.
"It’s so early in the game, " he said. "People hear a lot about e-commerce, but they fail to recognize how few people actually shop online. And when they do, they don’t spend all that money online. It’s a lot of hype.”
As far as the kiosks, Mak said Kmart Corp. (KM) has tried a similar approach with little success.
"They are not very techno savvy,” he said. "If they can walk around the stores and do their shopping, why stand in front of a computer?”
Wal-Mart officials dismiss the idea of cannibalization—where a Web site could eat up the business of its brick and mortar counterpart. The idea, Berryhill said, is complement, not competition.
"Land-based retailers worry about cannibalization and they’re been proven wrong many times,” Mak said, noting the holiday debacle involving Toysrus.com, where the company could not meet some orders because of overwhelming volume.
"When you lose customers on the Internet it’s very hard to get them back,” Mak said. "I would much prefer these retailers come up with good sites rather than poor ones.” 
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AOL, Wal - Mart in Net pact - Dec. 16, 1999
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Wal - Mart
America Online
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