Can Wal-Mart Get You To Buy Your Shampoo Online?
In its latest push to boost its online business, Wal-Mart Stores has started selling health and beauty products online for home delivery.
For the past year, shoppers were able to use Walmart.comto browse some of the retailer's grocery and health and beauty items, but it wasn't able to have those goods shipped to their homes. Instead, they check to see if they were in stock at a store near their homes.
Now, the company will send items such as Maybelline mascara, Sudafed cold medicine, or Pampers diapers directly to customers' homes for a shipping cost of 97 cents an item.
Wal-Mart's move has the potential to shift more sales of those items online and change the game for consumer products manufacturers, who have been showing signs that they want to sell more of their goods online and might begin taking matters into their own hands.
It also could force a shift in Wal-Mart's pricing strategy. In an effort to be competitive, the retailer has often had a regional price strategy, which means the prices of some household and beauty items might vary by as much as 20 percent to 30 percent from one part of the country to another. By placing these items online, prices may need to be made more standardized.
The company wasn't immediately available for comment.
Although sales of products online have accounted for a growing part of the retail business, consumer goods such as shampoo and toothpaste have been slow migrate to the online market.
Consumer products giant Procter & Gamble recently announced plans to try to convert the traffic coming to its Web site into more active sales, but doing that can be complex as the manufacturer deals with a large number of retail partners.
Meanwhile, an online retail start-up, Alice.com, wants to give manufacturers a way to ship directly to their customers. The Web site has been billed as a housekeeper and personal shopper rolled into one.
Unlike Walmart.com, shoppers at Alice.com receive free shipping and can pick from a wider array of goods, including toilet paper and laundry detergent, to ship to their home. Typically, the average Alice shopper buys 10 separate items at a time.
However, the business model at Alice.com is different than at Walmart.com. Alice.com allows its shoppers to track the items they use and store their selections for future purchases, almost like a Netflix video queue.
The goal of Alice.com is to eliminate the chore of shopping for common items like paper towels and tissues, says Mark McGuire, president of Alice.com.
And by bundling a large number of items together, the site may be able to clear a signficant obstacle that has been a factor in why these items are not more widely sold online: the cost of shipping bulky items.
When asked what McGuire thinks of Wal-Mart's latest move, he said, "In a lot of ways, it is very exciting for us."
"It's crazy that people don't buy things like diapers, toilet paper, and other staples online...because of Wal-Mart has the scale and the attention...it will get people thinking about buying those products online," he said.
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- What Does Wal-Mart's Marketplace Say About Online Shopping?
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