Tuesday, June 1, 2010

Is Wal-Mart Hurting Themselves?

Most everybody has heard of Wal-Mart. There is probably one in your city. Wal-Mart is one of the biggest chains of stores in America and it continues to grow!

Recently, Wal-Mart has introduced a fairly new program called site-to-store where a customer can order something online and have it shipped to their local Wal-Mart to be picked up at no cost to the customer. Basically if you order something online from Wal-Mart and have it shipped to your local Wal-Mart store, they will fork out the shipping cost. However, you will have to pay the shipping if you opt to have whatever your ordering shipped to your house or business.

This can save customers tons of money if they shop online quite frequently. After all, every store has an online site that offers tons of things that you cannot get at your local store. Some stores offer free shipping if an order is over a certain amount. For example, you might be able to get free shipping on an item you purchase from Best Buy if you spend at lease $100 on it. But with site-to-store from Wal-Mart, every item won't cost you a dime in shipping as long as you opt to have it shipped to a local Wal-Mart store.

So is Wal-Mart helping themselves or hurting themselves? The answer is both. I'll give you reasons for both.

The first would be that Wal-Mart is helping themselves by offering the free shipping if you have the item that you order sent to your local Wal-Mart to be picked up. This is drawing crowds of people to their site for this simple reason. People know that most other sites will charge shipping unless they are having a free shipping promotion or they are offering free shipping on orders of "X" amount of dollars. Wal-Mart ensures that customers never have to pay for shipping as long as the customer ships to a local Wal-Mart. This is great for those who would rather go online and shop rather than go out in town and avoid the crowds. It also is great for people who go online to shop for things not offered at the local store. Wal-Mart, as well as every other retailer like them, offers thousands of items not offered in their local store. Essentially, customers can save a few dollars to hundreds of dollars if they opt to have the items that they are ordering shipped to their local Wal-Mart.

The second is that Wal-Mart is actually hurting their sales by doing site-to-store. This is done by Wal-Mart offering the same items online that they do in their local stores. Wal-Mart does not honor their online prices in their own store even though they are the same place. Also Wal-Mart does not offer an instant pickup like does Best Buy or some other retailers across the country. If you don't know what an instant pickup is, it is where you buy something online and can go to your local store and pick it up immediately if it is available in your local store. Wal-Mart does not offer either of these services. So if I find something cheaper on walmart.com, a DVD for example, and print it out and take it into the local store, even though they are the same store, Wal-Mart will not honer their online prices in their local store. Also if I find something like a DVD and buy it online, I cannot just go down to the local Wal-Mart and pick it up. I have to wait for it to either be shipped to me or shipped to the store via site-to-store.

Most of the time, Wal-Marts online rates are cheaper than their in store rates. Wal-Mart usually offers such things as Blu-Ray DVD's for around $10 cheaper online, than if you would buy them in the store. For this reason, you can get tons of stuff cheaper on their online site if your willing to wait a few days to get it and you can save even more by avoiding shipping via site-to-store.

So is Wal-Mart hurting themselves? Only time will tell, but I say yes. As more and more people are discovering that they can order things online from Wal-Mart cheaper than they can go get them at their local store, the popularity of site-to-store continues to grow. Over time, this can effect the sales inside the local stores. Not only that but this can also create smaller freight trucks for Wal-Mart, due to all the site-to-store merchandise being shipped on regular trucks. This means that in some cases, Wal-Mart might have to send more than one truck to deliver their merchandise to the stores.

While Wal-Mart may not be hurting themselves with things that are online that a customer cannot purchase in the store, they are hurting themselves by offering lower prices on things that are online that you can go to your local store and purchase.

Maybe I'm wrong. I guess we'll just have to wait and see, but I bet that the site-to-store program won't be around much longer. I'd be willing to bet that it's gone within the next five years.

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