Wal-Mart Goes After Amazon.com

Leading e-commerce retailer Amazon.com (Nasdaq: AMZN) is clearly dominating online bookselling. The competition, however, just got a lot tougher.

Today, Wal-Mart (NYSE: WMT), which is massively expanding its e-commerce presence, announced that it has formed a strategic alliance with Books-A-Million (Nasdaq: BAMM), the third largest book retail chain in the United States.

Wal-Mart Will Sell Latest Bestsellers Online

This deal greatly expands Wal-Mart’s book title base, which will now include the latest bestsellers, and could set Wal-Mart up as an immediate threat to the book selling market share of Amazon.com, barnesandnoble.com and Borders.

Books-A-Million will be the exclusive provider of books and related products to Wal-Mart’s online customers. The book chain will use its Florence, Alabama distribution center to provide order fulfillment services for Internet orders.

“Wal-Mart’s online customers will have access to hundreds of thousands of book titles at our every day low prices,” said Glenn Habern, senior vice president of new business development at Wal-Mart. “Books-A-Million has been in the book business over 80 years, and by combining their literary expertise with our focus on customer service, we are confident that we can make an immediate impact on the quality of the online book industry.”

Will Offline Power Become Online Success?

Wal-Mart’s online presence could benefit greatly from the companies brick-and-mortar presence. Wal-Mart is the world’s largest retailer with more than 2,400 Wal-Mart stores and 450 Sam’s Clubs, and more than 725 stores internationally. Books-A-Million also brings a solid brick-and-mortar arsenal to the table. The bookseller operates 177 stores in 17 states.

Wal-Mart is looking to capitalize on its offline strength and leverage its brick-and-mortar presence into an e-commerce force. Wal-Mart is reportedly working with IBM to re-launch its Web site. Wal-Mart currently already sells hundreds of products online, including, books, music, appliances and toys.

Earlier this month, Wal-Mart announced a strategic e-commerce alliance with catalog company Fingerhut, which will provide order fulfillment for Wal-Mart’s online customers.

Wal-Mart Wants To Enter Banking Business

In related news, Wal-Mart has expressed interest in buying a savings and loan institution in Oklahoma. Wal-Mart has filed a request to the Office of Thrift Supervision for permission to make the purchase. The company noted in the filing that its three-year business plan includes opening five bank branch offices at Wal-Mart stores.

If Wal-Mart gets approval to make the purchase, this could be another step toward expanding its e-commerce presence. Online banking, after all, is a fast-growing industry that Wal-Mart would almost certainly pursue — if it ultimately decides to enter the banking business.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

CRM Buyer Channels