business news in context, analysis with attitude

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Arkansas Online has a story about a Walmart Supercenter in Lane Nona, Florida, just south of Orlando, which " is one of two concept stores the retailer has opened this year along with a similar supercenter located in the Houston area. The Lake Nona store, which opened Jan. 25 and is located in a growing community within Orlando’s city limits, is being tested to determine whether the retailer will roll out the prototype at other locations across the country.

"There are a few tech-based features available in the store. The most prominent is Wal-Mart’s Scan & Go, which allows customers to scan items with their mobile phones as they shop and pay for them through a mobile app to skip the checkout line. A version using a hand-held device also is available."

The story goes on: "Wal-Mart also included an interactive table in Lake Nona’s electronics department, which allows customers to swipe their hand to learn about a product. Projectors located overhead sense hand movements and determine the direction a customer wants to go in their search for information.

"The store has a large touch screen in the toy department, giving customers a chance to sift through the retailer’s instore and online catalog. A series of questions — like a child’s age and gender — help narrow choices and selections are either on the store’s shelves or available online. If the selection is only available online, customers can purchase the product through the mobile app."

The story says that Walmart continues to believe that the supercenter format can help meet consumer expectations, "providing Wal-Mart with a brick-and-mortar tool to help marry online and in-store capabilities for customers."

Analysts who have seen the store seem to conclude that while this may not be the perfect Walmart, it is a very cool Walmart ... and a step forward in the way Walmart approaches bricks-and-mortar retailing. Which is important, because Walmart has to up its game in physical retail even as it invests billions in the online arena.

• The Los Angeles Times has a piece about how Walmart "is belatedly but aggressively expanding its e-commerce business to keep pace with the seismic shift in consumer shopping from brick-and-mortar stores to the Internet ... With nearly a half-trillion-dollars in annual sales and 4,700 U.S. stores, Wal-Mart has been buying online retailers, slashing shipping rates and rolling out new ways for in-store customers to do more of their shopping at and its other websites."

While "Wal-Mart’s effort to tap that online growth often is portrayed as a direct attack on Amazon," the story says, Wal-Mart "prefers to frame its strategy as capturing more of the e-commerce market by blending its in-store, online and mobile-app offerings so that customers can easily move from one to the other to make purchases. If it snatches business from Amazon in the process, all the better."

The Times says that the new focus reflects simple math - traditional bricks-and-mortar retailing is growing at less than two percent a year, while e-commerce is growing 16 percent a year.

It is important to remember that e-commerce is growing on a much smaller base, though that is not to suggest that the difference in vitality is in any way illusory. I suspect that the e-commerce growth may accelerate, since Walmart suggests that its new aggressiveness in terms of buying up smaller online retailers and developing new online programs is just beginning, and that aggression is likely to translate into even greater segment growth.

• The Associated Press has a story saying that David Cheesewright, president and CEO of Walmart International, recently said in a speech that "he was optimistic about the future prospects of his company's digital business."

There are, he said, four reasons.

First, a "multiplier effect on sales from having a brick and mortar footprint and online presence." Second, global scale that "provides great access to product and an ability to price aggressively. also provides access to an even wider range of product."

Third, the belief that " has Smart Cart proprietary technology that adjusts prices in real time based on proximity of product to the shopper and shipping costs." And finally, infrastructure: "By giving customers the flexibility to choose when, where, and how to shop, WMT is able to better serve customers in a way pure online players cannot," Cheesewright said.

I continue to believe that there remains a fundamental difference between Amazon and Walmart. Walmart is in the business of selling as much stuff to people as it can, and Amazon is in the business of creating an ecosystem that includes everything from commerce to streaming NFL games. I'm not saying which business model will win out ... though I personally have a preference fro the Amazon approach ... nor do I think that there can be only one winner in this epic battle.
KC's View: