As online shopping goes mainstream, the nation’s top two discounters, Target Corp. and Wal-Mart Stores Inc., are taking vastly different approaches to their Web sites.
Wal-Mart has made the Web central to its holiday sales plan, publicizing special post-Thanksgiving Day sales and tripling from a year ago the number of online-only deals in the last week of November.
Minneapolis-based Target, on the other hand, has shied away from trumpeting Web-only deals. For now, at least, it is sticking closely to the carefully crafted holiday promotions offered in stores.
“Everything we’re doing is to support the bricks-and-mortar store,” said Target.com president Dale Nitschke. “Our guests look at Target.com as Target. We’re trying to create the same lean, fast-moving environment that you find in the Target store.”
In the retail world, both companies have been relatively slow to embrace online sales since launching in 1996. But that’s starting to change.
“Eight years ago, we were crashing every three days trying to figure out how to keep the (online) store doors open,” Nitschke said. “Now we’ve become a much more integrated part of the overall strategy. It’s not, ‘Oh, yeah, Target.com.’ “
Their strategies appear to be working, as traffic to both Web sites has skyrocketed this holiday season.
Ever coy about releasing hard data, Target said its Cyber Monday sales bested the industry average by “multiples,” surpassing its forecasts and goals for the day. And since then, Target.com has become one of the fastest-growing retail sites in terms of visitors, according to Internet research company comScore Inc. of Reston, Va. The others: Yahoo Shopping, Apple, Circuit City and Toys “R” Us.
Wal-Mart expects its online holiday sales to rise 40 percent to 60 percent, two to three times faster than industry projections, said Ravi Jariwala, a Walmart.com spokesman.
Online shoppers already have shelled out $13.4 billion since November, a record increase of about 18 percent, according to comScore. Analysts predict an overall increase in holiday e-commerce of 15 percent to 20 percent this year, making it the fastest-growing retail category.
The changing marketplace was most apparent on Cyber Monday. What started as a marketing event dreamed up two years ago by the National Retail Federation to keep the post-Thanksgiving Day momentum alive now is a “permanent fixture” on the retail calendar, Scott Silverman, executive director of Shop.org, said last week.
Retailers launched special Internet-only deals on the Monday after Thanksgiving, and saw sales increase 21 percent to 26 percent over last year, a record.
Still, Silverman notes, “As the online marketplace matures, the growth of new customers shopping online is slowing down. Retailers are shifting their marketing strategy from customer acquisition to customer retention.”
At Target.com, the online database gets updated every 15 minutes. That means aggressive shoppers can snatch up those Nintendo Wiis as soon as they become available, even if it’s at 3 a.m.
Nitschke said Target’s Web site also has become an important tool in spotting trends and managing inventory, something that could be key as it and other retailers see sales slowing in high-margin products. In some cases, shoes, clothing, bed and bath products and certain electronics are available on the site six weeks to six months before they’re available in stores, Nitschke said.
An online spike in a bright red Isaac Mizrahi party dress or a complete lack of interest in a new storage system prompts stores to adjust their stockrooms accordingly.
Meanwhile, Wal-Mart reports that the Web is bringing in new customers through its “Site to Store” program, which allows customers to order items online but go to the store to pick them up. Started as a pilot program two years ago, Site to Store became available to all 3,300 stores in July.
While 90 percent of WalMart.com’s customers also shop at a Wal-Mart store on a monthly basis, the company found that half of the customers who used the site-to-store service were making their first purchase, Jariwala said. And once in the store to pick up their online order, shoppers spent an extra $60, he said.
Target said it has no plans to offer such a program, believing most of its customers prefer to receive items on their doorstep. To that end, it has offered free shipping for about 50,000 items this year. It also is promoting year-round features such as GiftFinder, which offers gift-giving suggestions, and TargetLists, an online registry.
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