By  on November 9, 2006

NEW YORK — Wal-Mart might be tweaking its apparel assortment to add more fashion basics, but when it comes to fashion and jewelry on the its Web site, the sky is the limit.

Carter Cast, president and chief executive officer of walmart.com, said Wednesday the retailer could benefit from consumer feedback on products before they're rolled out to stores. Wal-Mart will introduce a major apparel brand exclusively on the Web site in the future.

"I think we will test a new apparel brand online in conjunction with the Wal-Mart apparel team," Cast said. "As the stores get better and better with segmentation, it will allow us to test a new brand."

Cast didn't discuss the timetable for launching a brand. But Wal-Mart already has dabbled in Web exclusives. For example, Uncharted Territories, a jeans collection, recently made its debut on the Web site. "It's doing well," Cast said. "The fit is different."

Narrow-fitting premium denim jeans in a dark wash were $28.77 after a price rollback from the original $38.77. There are five styles in the collection. The line is now being introduced to a limited number of stores.

Wal-Mart, which has been lagging in apparel, said it will remove the Metro 7 line from some stores; skinny jeans and other fashion-forward items did not connect with many customers. But walmart.com has more leeway than stores in terms of trends and Metro 7 is very much in evidence on the site. The styles included a toggle fur vest, $19.94; motorcycle jacket, $59.94; shrunken velvet jacket, $20; baby-doll dress, $16.94, and jersey cocktail dress, $16.94. From George ME, there is a gold metallic leather jacket for $88.82.

Walmart.com also has been successful when it's dabbled in higher price points, such as leather coats for $105.88 and wool and cashmere blend coats for $99.66. Jewelry pushes the price envelope even further. Cast touted a 2-carat diamond and 18-karat white gold ring for $8,000, and a Journey necklace with 2-carat total weight of diamonds set in 14-karat white gold for $4,500.

In an interview, Cast discussed the rationale behind the recent redesign of the Web site and the increasingly important role it is playing in the company, from driving customers to stores to testing new products to providing insight on consumer spending habits.The 13-month-long redesign touched 2.3 million pages and 925 categories. With bigger images that can breathe on the page, rich media and peel-backs that reveal more information, the Web site helps drive traffic to stores. Incentives include free pickup in northern California and Texas for online orders. Customers can upload their photos online and pick up the prints at their local supercenter. "People make incremental purchases when they go to pick up prints or prescriptions," said Cast said. "It shows the value of cross-marketing."

The Web site is a trend prospector for Wal-Mart stores. "When things are successful online, we notify the general merchandise manager at Wal-Mart," Cast said. "Getting a successful online product into stores depends on the product's lead time."

Walmart.com reaches a broader range of customers than those found in traditional stores. According to Cast, almost 90 percent of online shoppers have visited a store. "Our customer base is like Wal-Mart at the higher end," he said. "We have customers with a little more household income and a little more education. Our consumer base is a little more female and a little more urban."

Cast declined to discuss sales. Wal-Mart's online business has been estimated at between $1 billion and $2 billion. "We're growing e-commerce by 40 percent," he said. "There have been projections that e-commerce will account for 10 percent of total retail sales [in the U.S.] in five years."

The value proposition resonates with online shoppers as well as those in stores. "When we sell apparel brands for less, they sell well," he said. "We've had a little easier time than stores because we're appealing to a little more affluent or urban customer. When we find that things don't work, that's good news because it tells us what the customer doesn't want. Last year's cashmere throws for about $100 didn't sell so well. We're testing a lot of cashmere scarves priced under $20 this year."

Without the physical constraints of bricks and mortar, walmart.com can carry 1 million stockkeeping units, compared with the typical 150,000 for a store. Walmart.com sells items not found in stores, such as 50-inch Panasonic flat-screen TVs for $2,348. "The sweet spot in stores in under 40 inches," Cast said.When walmart.com was launched "we had to learn, sometimes painfully, what worked online," Cast said. Now, not only is the site better able to predict what customers will buy, it knows who is buying, right down to the customer profile.

Walmart.com divides shoppers into three groups: deep drillers, who bore right into the product information; searchers, who look for a specific product, and scanners, who cast about looking for values. "We can tell who's buying and where," Cast said. "The whole site redesign was based on consumer research."

Walmart.com may end up teaching the parent about more than consumer preferences, however. The Web site, which was set up in 2000 as a stand-alone company, is based in Brisbane, Calif., far from Wal-Mart Stores' headquarters in Bentonville, Ark. While the company's culture has long revolved around Bentonville, Cast said "bringing walmart.com to northern California has been a great experiment. I think Wal-Mart will be more open to remote offices. You've got to be where the talent is. I think Wal-Mart has seen the value of having the dot-com business in California."

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