Wal-Mart Rolls Out HBC Products Online
Watch out Amazon.com,
cvs.com, drugstore.com, walgreens.com and every other online merchant
selling everyday health and beauty care items online. Walmart.com
has entered the business.
The online
division of Wal-Mart Stores announced earlier this week that it would
begin selling the very same beauty products, over-the-counter remedies
and personal care items online that it sells in stores.
"Customers have long trusted Walmart
to provide the best values on health and beauty brands in our stores, and now
customers can also access these savings online at Walmart.com with the convenience
of home delivery," said Kelly Thompson, Walmart.com’s chief merchant, in a
press release. "By offering savings on our customers’ favorite health and beauty
items online and in our stores, we can better help our customers shop the way
they want."
Discussion
Questions: What will Walmart.com’s entry into health and beauty care
product sales mean for it and Walmart’s stores? What will it mean for
competitors?
HBC online? There is a caveat here and I think we can equate it to grocery stores online. HBC products have a touch/feel/smell process to them and I’m not sure customers are ready to buy this kind of stuff online. And is the person buying a plasma TV or lawnmower going to attach a bottle of Head and Shoulders and tube of Colgate to the order? What about waiting times? I find that I buy HBC products when I run out. Not 2-6 days in advance. What about delivery charges as well? We’re talking about products in the $1 to $20 realm. Pushing for a big order can help the basket and margin but are customers going to actually go for it? I’m going to wait and see how this turns out for Wal.
The Wal-Mart Model: Today the world; Tomorrow the universe. Selling HBC products online is just another ‘reach toward the sales zenith’ by Wal-Mart. This latest move will have some effect on their in-store sales but it will also draw sales from other sources, resulting in more total HBC sales.
Undoubtedly, there are even more universal sales penetrations being planned in bountiful Bentonville.
Now this comment comes from a male, who has never purchased a HBC item online…but I think I’m tracking the topic correctly, because:
1. I asked the “Blonde Bombshell”–that great looking, Phi Beta Kappa who I was fortunate enough to marry 35 years ago. She has the wherewithal to buy when, where, and what she wants (within reason, as she is SMART). She buys more and more of her items, particularly the high-end ones, online.
2. I look at our BIGresearch Consumer Intentions & Actions (CIA) Survey data of over 8,500 Adults who are purchasing HBC items.
Walmart’s strategy to bring the HBC marketplace closer to the consumer makes perfect sense. In the process, they will encourage their customer base (still growing on a worldwide basis), to explore other opportunities for HBC items.
This will have the impact of having those same customers exploring other sites–online is an ideal way to shop, compare, and build a plan. Several questions embedded in the Consumer Intentions & Actions (CIA) Survey of March, 2009, pointed to challenges that Consumers have when shopping for Personal Care/Hygiene items. And, helping those Consumers/Customers overcome those challenges, leads to SALES:
AT WHAT RETAIL STORE DO YOU SHOP MOST OFTEN FOR PERSONAL CARE AND HYGIENCE PRODUCTS?
27.4% of Adults said WALMART.
TELL US WHEN SHOPPING FOR PERSONAL CARE AND HYGIENCE PRODUCTS DO YOU REGULARLY, OCCASIONALLY, or NEVER HAVE TROUBLE FINDING THEM?
6.7% said Regularly.
41.0% said Occasionally.
55.3% said Never
WHEN YOU HAVE TROUBLE FINDING THE PERSONAL CARE & HYGIENE PRODUCTS YOU WANT TO BUY, WHY IS THAT?
Difficulty in finding where all the Products are on the Shelves -13.5%
Difficulty in finding the Products I need – 21%
Difficulty finding the exact Product form I want (solid, spray, gel, etc) – 28%
Difficulty finding the exact Brand I want – 21%
Difficulty finding the exact size I want – 13%
Difficulty finding the exact scent/fragrance – 15%
Out of Stock – 23%
Store doesn’t carry the exact item I want – 16%
Taking the HBC offerings online merely shows that Walmart is doing what helps them continue to drive sales, product turns, and profits higher–they are LISTENING TO THE CONSUMER.
HBC products take in a very broad array of products and categories; everything from mouthwash and shaving cream to eye drops and Preparation H. Walmart will do a great job online and no sales will be lost inside the store. Online competitors will no doubt feel the wrath of Walmart’s grip with EDLP.
One might wonder why this is news. Why shouldn’t Wal-Mart offer the same product categories online as in their stores? Wasn’t this expected? If a customer is willing to shop at Walgreens.com, drugstore.com or amazon.com for their HBC items, why wouldn’t they shop at Walmart.com? If Wal-Mart can compete in other online categories, there is no reason why they can’t in this one.
How many naysayers were out there when Amazon moved into HBC? That move by Amazon came with surprise and doubt. Yet, today, they are included in the same breath as Drugstore.com and others.
Wal-Mart has no boundaries. They are not constrained by the way they operated yesterday. They religiously follow Sam Walton’s words, “I have always been driven to buck the system, to innovate, to take things beyond where they’ve been.” Wal-Mart doesn’t see itself as a Mass Merchant. Wal-Mart doesn’t see itself as an operator of stores. Wal-Mart doesn’t see itself as a grocer. Wal-Mart sees itself as a retailer that sells goods and services to customers better than anyone else.
Totally agree with Roger Saunders. Thought the data was fascinating, and it rang true in my own experience. Walmart is listening to the shopper, and making this available as an option, for those who might want it. Smart.
BTW, does anybody yet truly understand when it is Walmart, Wal-Mart and Wal*Mart? I’m not even sure Wal’Mart knows.
The next step–grocery retailing in a big way, online, at Walmart. If their superstores didn’t turn grocery retailing on its ear, the next step will land it right on its head altogether. This move is as significant as any made by Walmart to date. If this works for them, even to a medium degree–look out!
This is no minor thing here folks, especially to the market that HBC products online is after. If they can pull it off–and they generally don’t fail–it’s no big leap; at a minimum to land right into selling grocery staples online. Perishables or fresh? Well, that’s another story. If anything, Walmart has shown the ability to be champions at incrementalism. This is one of those instances. That there are so few comments on this discussion is fascinating….
Makes perfect sense and I have little doubt that Walmart will not be the last to venture down this path. HBC items, not unlike other items found in the household, require replenishment. And if the Walmart initiative makes it convenient, affordable and simple to order HBC items online, then many consumers will migrate in that direction and change the way they have traditionally shopped. It is called evolution.