Inside This Issue - News
Wal-Mart turns up heat in H&BAs
October 26th, 2009
BENTONVILLE, Ark. – Wal-Mart Stores Inc. has given its health and beauty aids business a major boost by making the products available through its web site, Walmart.com.
The site has become the country’s second-busiest retail site, trailing only Amazon.com, but until now it has not offered health and personal care items.
Although the retailer does not break out its online sales, they are estimated at several billion dollars annually.
The H&BA products are being offered at prices generally in line with Wal-Mart’s in-store prices, which in many cases are significantly lower than those of online competitors.
For example, a random price comparison reveals that a 48-count package of Tylenol Rapid Release Gels for Sinus Congestion and Pain cost $8.62 at Walmart.com and $9.99 at drugstore.com. A smaller 24-count pack at CVS.com costs $7.49 (prices do not include shipping).
A 12-count pack of Mucinex Children’s Mini-Melts Expectorant in grape flavor carries a $7.18 price tag at Walmart.com, coming in under drugstore.com’s $7.99. CVS.com, however, has responded by dropping its price on the item to $6.29 from a regular $8.99.
In beauty care, meanwhile, Walmart.com is offering the Olay Professional ProX Intensive Wrinkle Protocol 3-piece Starter Kit for $51.50, representing a $10 reduction from its regular price. That compares with $69.00 at CVS.com and $68.99 at Walgreens.com.
In addition to its everyday-low pricing, Wal-Mart is enhancing its online H&BA offer with shipping charges of 97 cents per item. By contrast, most of its competitors offer free shipping on orders exceeding a certain total.
Shortly after the launch, Raul Vasquez, chief executive officer of Walmart.com, told analysts attending the retailer’s annual analyst conference that personal and beauty care are extremely important segments to the retailer and that the online business is “ramping up very, very nicely.”
In addition to the expanded offerings, Wal-Mart has created a health and wellness destination on its web site that combines content with products. For instance, its home page currently features the company’s partnership with WebMD, offering “ways to be healthy — get WebMD tips and Walmart savings.”
Clicking on a link takes users to a page that provides several health care tools, including a diet and fitness tracker, diet tips and nutritional guidance.
Besides its current logistics network, Wal-Mart is using a new third-party provider to fulfill its web orders.
Along with its online health and wellness initiative, Wal-Mart announced that it would cut prices on thousands of items as the holidays approach.
“Many of these prices represent the lowest we’ve offered in years, because we know these are tough times for American families,” says vice chairman Eduardo Castro-Wright. “We made a purposeful decision to focus initially on everyday staples as well as items that often require larger spending commitments in preparation for Thanksgiving and Christmas.”
Although this was not good news for competitors, it apparently did not cheer investors either. Wal-Mart’s stock price declined by 2% to $50.63 after the announcement.
While some analysts have questioned whether Wal-Mart has been veering away from its deep-discounting roots in recent months, executives insist that the company will leverage the market share it gained in the recession, as well as the cost cuts it has made by streamlining its merchandise assortments and inventories.
These steps, they say, will allow Wal-Mart to offer deals that competitors cannot.