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Walmart e-commerce dwarfs compared to Amazon

3/24/2013

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With $469B in revenues, Walmart ranks first in the Fortune 500 above Exxon Mobil, and yet its online revenues only account for 1-2% of its total sales: $4.9B in 2011, and expecting $9B in 2012.

Compare that to Amazon $50B online revenues and 200 million SKUs (vs. 2 million for Walmart). It’s high time for Walmart to shift its strategy and go all-in digital commerce or incur the risk of being slowly eaten away by Amazon. Walmart is in a unique position with its 4,000 centers (vs. Amazon 40 warehouses). These stores can be leveraged as fulfillment hubs and enable same day delivery and accommodate for “ store pick-up”: features that will be hard for Amazon to replicate.

As ‘Good to Great’ author Jim Collins suggests with its hedgehog concept or Charles Duhigg in his book ‘The power of habit’ with its “keystone” habit: companies that are chasing too many rabbits end up failing. Strategy is about picking the ONE thing the company needs to be good at. The customers have moved online and mobile, digital commerce is a no-brainer and Walmart should probably re-align its organization accordingly with this new reality.

Let’s Walmart the once, premier in supply chain efficiency figures the logistic of running Walmart as a new e-commerce company.

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Wal-Mart outlines its e-commerce priorities
Expansion in key markets, technology development and fulfillment are all on the to-do list.

By Kevin Woodward
Internet retailer
03/19/2013

International expansion, a new technology platform and an improved fulfillment network are top e-commerce priorities for Wal-Mart Stores Inc., the retailer outlined at the Bank of America Merrill Lynch 2013 Consumer & Retailer Conference.

Wal-Mart, No. 4 in the Internet Retailer Top 500 guide, expects to generate $9 billion in global e-commercerevenue in its current fiscal year, ending Jan. 31, 2014. In February, Wal-Mart’s Neil Ashe, president and CEO of global e-commerce, said e-commerce revenue growth was “accelerating and ahead of our plans.”

In 2011, Wal-Mart’s U.S. e-commerce sales totaled an Internet Retailer-estimated $4.9 billion, up nearly 20% from $4.1 billion the prior year. In comparison, Amazon.com Inc., No. 1 in the Top 500, had $48.08 billion in sales.

“We’ve got three clear priorities for e-commerce, and the first is to penetrate and expand in key markets,” Charles M. Holley Jr., executive vice president and chief financial officer said last week at the Bank of America event. “We have a very solid foundation of e-commerce in the United States and United Kingdom. We have a new and exciting platform of growth in China, and we have a very fast-growing business in Brazil.” Sales were healthy in Brazil last year, he said, with expectations for the same this year. He did not disclose sales figures for Brazil.

In 2012, Wal-Mart raised its stake to 51% in Yihaodian, a China-based e-retailer that sells more than 180,000 products. The deal gives Wal-Mart “a very strong foothold in the markets that can only be matched by the U.S. in terms of potential,” Holley said.

Another priority is to develop Pangaea, Wal-Mart’s global technology platform, Holley said. 

Read full article here

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B2B marketers beware: your customers are online

3/3/2013

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Most corporate executives have to make or influence the purchasing decisions in areas outside of their core competencies. For example a CEO, CMO and CIO might have to jointly decide and purchase some enterprise grade mobile security software to allow their employees to use their personal mobile device in the workplace. And these executives would most likely have no training, experience or previous knowledge of mobile security software.

 As this research article from the CEB’s Marketing Leadership Council in partnership with Google shows, these B2B customers will be doing most of their research on the web (mobile, desktop) before contacting potential vendors. So the information and answers these B2B buyers are looking for should be online.
  • “Customer learning is happening all the time, and doesn’t coincide with your campaign calendar.”
  • “If the customer is always learning, then Marketing must always be teaching.”

This is where ‘content marketing’ comes in. Content marketing is one of the most important ingredient of successful B2B marketing.  But as Corey Mull’s puts it, many organizations fail to do it right and B2B marketing teams often haven’t caught up with this evolution and adjusted their teams accordingly. “Most [of companies’] content is low value” and “not at all useful for customers in the midst of a learning journey.”


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B2B’s Digital Evolution

Corey Mull
google.com/think
February 2013

The rundown
New research from CEB’s Marketing Leadership Council shows that potential business customers are increasingly using digital channels to form opinions about major purchases. Today’s business buyers do not contact suppliers directly until 57 percent of the purchase process is complete. The challenge for marketers is to be present in these channels at all times with content that educates buyers and helps guide commercial decisions.

Throughout 2011 and 2012, Google worked with CEB’s Marketing Leadership Council to survey 1,500 business leaders who have recently been involved in major purchases for 22 large B2B organizations. The results suggest that a new paradigm in business-to-business marketing has taken hold.

(…) 

The challenge is digital

(…)

It wasn’t always like this. That customers can engage in this self-directed learning is thanks to the internet; that they must learn about products and solutions themselves is a function of increased budget pressure amid a stagnant economy.

So what’s wrong with waiting for customers to come to us? Because by the time they do, they have hardened expectations about what they want out of a supplier – and at that point, your job is to take their order and fill it for the lowest price. They’re learning on their own, and there’s no room to teach them why what they’ve taught themselves is wrong.

It’s Marketing’s job to influence the 57 percent of the sale that occurs mostly on the web, before Sales contact, but three challenges – incomplete digital integration, ineffective content, and a poorly-optimized channel mix – are keeping marketers from growing mindshare and making the most of what they are getting already.

True integration

Most marketing leaders still treat digital as an unwanted appendage on the traditional marketing campaign cycle, which goes roughly like this: Create a new product, design a campaign touting its features and benefits, figure out a place to stick digital channels within that campaign architecture, execute, measure, repeat.

Take a look at the story we began with, and it becomes clear why this approach won’t work. Customer learning is happening all the time, and doesn’t coincide with your campaign calendar. Marketing organizations have largely been designed from the ground up to support and optimize campaigns, not maintain the continuous presence that the digital channel requires. Marketing management must adjust; if the customer is always learning, then Marketing must always be teaching. 

Persuasive, focused content

It’s not enough to teach; you have to teach well. And the dirty little secret of most content marketing is that it does neither. It’s obvious why: Content creation has been allowed to grow organically, with the inevitable result, our research shows, that it has typically spread across multiple business and product lines and lacks a consistent, cohesive message.

all of that leads us to the biggest problem with current B2B digital approaches: They rely on content that is not at all useful for customers in the midst of a learning journey. Most content is low value; it may be interesting or get a lot of ‘engagement,’ but it doesn’t help buyers make commercial decisions.

This is a structural problem. Marketing’s content creation machine is not designed to create consistent, focused messages.

Read full article here

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