Wal-Mart has upped its stake in the battle of the online retailers and in a bid to confront e-commerce leaders Amazon it has revamped their website to make it far more personalised than ever before.
For Wal-Mart, personalisation is the weapon they have chosen in a bid to cut down Amazons sales. Despite experiencing a 30 per cent increase in e-commerce sales (in the past financial year) Wal-Marts $10bn of sales stands small when compared to Amazons titanic $60.9bn worth of sales. The new website will be able to use the customers past purchases and location to offer them appropriate products. For example, if someone is living in a place which is experiencing a heatwave, it is likely that paddling pool and water guns will be first to pop up should they search for leisure items. Similarly if they buy a notepad they will be recommended pens and pencils.
Neil Saunders, managing director of Conlumino, agreed that for e-commerce, personalising the web experience was the way to go but also warned of the risks behavioural marketing presents. “This is a sensible move by Wal-Mart. Using information on a customer’s behaviour and preferences retailers can make sure the products that they put in front of customers are relevant. The trick is, however, to do it successfully by making sure it is intelligent and sensitive enough to realise when purchases are being made for someone else, when a gift is being brought for example. A man does not want to buy a dress for his wife and then find himself bombarded with adverts for dresses.”
Joining the online shopping race considerably late, Amazon certainly has a lengthy head start on Wal-Mart. However, Saunders highlights the areas where Wal-Mart are still very much at an advantage. He said: “Wal-Mart is a store based business currently facing saturation. Amazon has certainly made life more difficult for Wal-Mart and has definitely had a head start in regards to online retail. However this is not to say that Wal-Mart does not also have advantages. Firstly, being so large, Wal-Mart has a large amount of purchasing power. Secondly being a brick and mortar store means Will-Mart are able to offer services Amazon can’t, such as buy and collect. Lastly, Wal-Mart has a huge amount of IT power at their disposal.”
Armed with so much potential, Wal-Mart pose a real threat to Amazons reign as king of online retail.