Posted on: Tuesday, May 11, 2004

Wal-Mart goes more upscale on its Web site

By Julie Moran Alterio
The (Westchester, N.Y.) Journal News

Imagine an online shopping spree to a single store where you can download the latest song by Britney Spears, rent "Pirates of the Caribbean" on DVD and sign up for an Internet service.

And while you're there, you can load your virtual shopping cart with a $3,288 diamond ring, a $1,950 digital camera and a $2,409 Beautyrest mattress set.

Would you be surprised to learn that you are shopping at Walmart .com?

Wal-Mart Stores Inc., which popularized "everyday low prices," is turning to the Internet with new zeal.

In March, Walmart.com introduced an 88-cents-a-song music download service. Last summer, it began offering DVD rentals by subscription.

Though Wal-Mart's in-store merchandise remains inexpensive, Walmart.com sells top-of-the-line models of popular items such as digital cameras, which top out at about $300 in stores.

Carter Cast, senior vice president of merchandising and marketing for Walmart.com, said the idea is to offer "more Wal-Mart" to shoppers.

"We want to expand the four walls of the store and provide customers with the products that they can't get at a Wal-Mart," Cast said.

Wal-Mart also is trying to wrest boasting rights from Web-only retailers that define online shopping in their categories, including Amazon, iTunes and Netflix.

Wal-Mart is the world's biggest retailer — more than 130 million people visit its more than 3,000 stores each week. But the Bentonville, Ark., company was late to the dot-com race when it created its online division in San Francisco in 2000, and struggled to identify the right mix for the Web.

"In 2000, we might have had a plastic cup on there," Cast said. "When you add shipping and transportation, it isn't economical to be shipping a single unit of something that costs under $1. We learned that pretty quickly, and it was painful at the beginning."

Today, Walmart.com is able to offer a wide assortment — including 600,000 book titles and 3,000 video games — because much of its merchandise is mailed directly from suppliers to customers.

When Wal-Mart began its online store in 2000, its entrance generated some fear among Web retailers. Today, the attitude is more complacent.

"I think you'll hear from us what I suspect you'd hear from most of the other online brands Wal-Mart's tried to compete with: While they're formidable, to put it mildly, in the brick and mortar world, they've never established much of a brand or presence online," said Netflix spokeswoman Lynn Brinton.