Archive for the 'e-commerce' Category

will wal-mart win globally?

April 22nd, 2008 Comments(0)

Wal-mart announced the other day a $700MM investment in E-Commerce in Brazil. Fortune magazine announced that Wal-Mart is number uno on the Fortune 500 list

SAO PAULO/NEW YORK (Reuters) - Wal-Mart Stores Inc said on Thursday it will branch out into electronic commerce this year in Brazil, where it plans to invest 1.2 billion reais ($722.8 million) to keep up with fast-growing consumer demand.

Hector Nunez, chief executive of Wal-Mart Brazil, said the plunge into e-commerce will be a crucial part of the U.S. retailer’s growth strategy in Latin America’s largest country, where an economic boom is lifting millions out of poverty.

“We’re … entering into new channels, the most important being e-commerce that we will launch in the second half of this year,” he said at the company’s international analyst field trip in Salvador, in northeastern Brazil.

So we all know that annual growth of 20-50% in US e-commerce operations are a thing of the past and that competition is stronger than ever before. Check out the compete.com chart on target.com vs. walmart.com and see why wal-mart has to invest globally. (also note kmart.com on the graph below):

The big question is $700MM is a TON of money. You could bootstrap, and I use that term lightly, a site for 1% of that and be competitive to what wal-mart is going to be doing in Brazil. That is why the internet is the great divide. Long tail vs. head. Good luck wal-mart you are going to need it. Hopefully you have realistic expectations and give it time…..

office supply update

November 20th, 2007 Comments(0)

Quick update on my post below. OfficeDepot announce today that earnings were down 9%. US same store sale fell 5%.

Look for them to continue to have troubles if the holiday season does not perform like last year. Now lets watch staples and see if they can overcome the - going into November.

Are office supply companies in holiday trouble?

November 09th, 2007 Comments(0)

Out of curiousity, I wanted to take a look at a vertical market that is dominated by three players. Looking at Office Supplies online the players are Staples.com, OfficeDepot.com and OfficeMax.com. Revenue between those three account for over 98% of total e-commerce revenue for that vertical market. The 2005 (sorry, working of an old Internet Retailer book) revenue is as follows:

officerevenue.png

Basically, Staples.com and OfficeDepot.com were the same with OfficeMax.com pulling in a respectable $2.6B, yes BILLION. So that was 2005. Now lets look at what is going on now. Check out the compete.com chart below which includes the most current visitor data for October:

officsupplies.png

What is cool is that you can download the data you can see the 12 months prior visitor data which I downloaded to Excel below:

uniques.png

Okay, a couple of things stand out.

  • Overall visitors to the three combined are down 9% vs. October last year.
  • OfficeMax.com traffic is down over 18% vs. October Last Year
  • OfficeDepot gained 2% market share in October of this year.
  • OfficeMax.com makes more money per visitor than Staples.com and OfficeDepot.com
  • November and December visitors last year were all +50% vs. October last year.

    • So the questions are:

  • Will OfficeMax have below expected holiday sales?
  • Will OfficeDepot.com overtake Staples.com?

    My educated guess is that holiday sales at the big office supply sites are going to struggle vs. last year. Look for them to promote more in the upcoming months due to the current downturn in visitors to their sites. OfficeMax.com has a big hill to climb and needs to push hard quickly.