Marc Lore, CEO of Wal-Mart’s US e-commerce business said recently that the company has way to go to match with top players like Amazon.com Inc. Arguably, the biggest retailer in the world, Wal-Mart has a lot of homework to do to compete with online majors like Amazon.com Inc. Lore admitted that there were horizons where Wal-Mart were playing defence and the company is behind and added that the firm needed to catch up, according to a Bloomberg report.While speaking at the Bloomberg Breakaway Summit in New York recently, Lore quoted one instance where the Wal-Mart lagged behind was the “long-tail” categories that the company was going after with acquisitions.The terminology, “long-tail” referred to the seemingly endless assortment of products that online retailers could offer, compared with the shelf-space constraints that forced physical stores to focus on a more limited variety of top-selling items, the Bloomberg report said.
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After acquiring his firm, Jet.com for $3.3 billion in September last year by Wal-Mart, Lore was made the CEO of its e-commerce business. After taking over, the 45 year old Lore introduced free two-day shipping for orders in excess of $35, besides expanding the online grocery business. What is more, Lore also acquired the outdoor retailing firm, Moosejaw and women’s apparel firm ModCloth. With the result the online sales showed an upward tick of 29% over the December quarter, helping the retailer’s same-store sales top estimates, the Bloomberg report pointed out.Offensive modeAt the same time, the company is also playing offensive, if Lore’s statement is anything to go by. Lore offered discounts on one million online products, provided its clientele were willing to pick up the items at one of its 4,700 outlets. Lore was confident that his strategy would work as the programme takes advantage of Wal-Mart’s nationwide network of outlets and it’s 6,700-strong trucking fleet.Lore said that the company’s cost to ship the product to the store worked out 75 cents a box in contrast with shipping the same product to a customer’s doorstep, the cost would scale up to $5.Apparently, the moves are meant to widen Wal-Mart’s online assortment and close the gap with Amazon, which now accounts for 51 cents of every dollar spent on online retail, thanks to its wide range of product offering and Prime membership benefits, quoting Macquarie Research, the report said.Lore’s business journey started by selling his first start-up firm, Quidsi to Amazon.com Inc back in 2011 and continued working there for few years before embarking on a different business. About the loss Amazon had suffered by acquiring Quidsi, Lore was of the opinion that Amazon had not pumped in enough resources in growing the company that forced Amazon to shut Quidsi down in March this year.When parried about the struggles of mall-based retailers such as Sears Holdings Corp., and Macy’s Inc., Lore was of the opinion that the retail segment was still fairly healthy and added that few brick-and-mortar brands might as well disappear, with the current environment of steep discounting and online encroachment persisted. Lore said that it was not easy to change and adapt, when things were moving at a rapid speed. The pressure is for the firms to stay on top of it and not everybody is capable of staying at top. Also there is a perceptible change in the way people shop. What is more, those firms, which are willing to adapt will stay on top of the business and those who are not willing to change will perish, Lore added.
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