Walmart.com wants to be the first place U.S. consumers go to when making an online purchase, and its announcement on Tuesday that it will sell health and beauty products will help it reach that goal, its chief executive officer said in an interview.
In a few months, whenever someone thinks about buying diapers -- in the same way they think about going to a Wal-Mart in the physical world -- they will think about going to Walmart.com, said Raul Vazquez, CEO of the online division.
Indeed, Walmart.com's parent, Wal-Mart Stores Inc, has gained market share amid the economic downturn as shoppers head to its U.S. Walmart stores for low prices on staple items, like diapers, medicine and food.
Now Walmart.com has decided to start selling thousands of personal care items, including L'Oreal lipstick, Colgate toothpaste, Pampers diapers, Tylenol extra strength caplets, and Durex condoms.
The offering comes a little more than a year after Walmart began allowing visitors to browse that merchandise on its website. But instead of being able to buy the items online, Walmart.com browsers were only able to check to see whether the products were in stock at a store near them.
Vazquez said millions of customers browsed the category online. He described the launch as one of Walmart.com's biggest because it is product that customers need every day.
It made sense for us to go ahead and offer this product, especially because this is one of our core categories in stores, he said.
SEARCHING FOR EXPANSION
Walmart.com has been taking steps to expand its business. In late August, it unveiled Walmart Marketplace, which allows select retailers like eBags and CSN Stores to sell merchandise on its website.
We've been in business about nine years now and we're very pleased with our progress, but we know there is still work we need to do, Vazquez said.
Walmart.com ranked as the 13th-largest U.S. online seller in 2008, with an estimated $1.74 billion in sales, according to trade publication Internet Retailer. Amazon.com ranked as the No. 1 online seller, with $19.17 billion in sales.
Meanwhile, in 2008 U.S. health and beauty e-commerce spending rose 8 percent to $4.6 billion, according to comScore Inc, while spending on baby supplies fell about 3 percent to $700 million.
Walgreen, CVS and Drugstore.com ranked as the top three retail healthcare sites as measured by unique visitors in August, according to comScore. Such sites often have free shipping promotions depending on the amount spent, while Walmart.com is charging 97 cents per item for delivery.
Vazquez said selling health and beauty items online will also allow Walmart.com to reach shoppers in areas like San Francisco and New York City that lack Walmart stores, he said.
There is still a lot of the country that doesn't have access to a Walmart, Vazquez said.
He said the launches of Marketplace and health and beauty provide momentum heading into the holiday shopping season.
While Walmart.com will have more additions to announce before the holidays, Vazquez said it does not plan to offer online layaway this winter.
Last year, many retailers, including Kmart, touted layaway to win over holiday shoppers, and this year, Kmart, a unit of Sears Holdings Corp is offering online layaway.
The thing that we're trying to do is figure out what are the things that are going to be of the broadest appeal to our customers, Vazquez said.
When we were making decisions about what we were going to launch this year things like this -- like health and beauty -- just were above that on the list of priorities.
Vazquez also said he was not ready to discuss selling groceries online. Last year, when Walmart.com began allowing visitors to browse health and beauty items, it also started to let them to browse the groceries that it sells in its stores.
We also have millions of customer taking a look at that every month, Vazquez said, but grocery isn't one of the things we're ready to talk about right now.
Wal-Mart shares rose 1.47 percent to $50.34 shortly before the close of trading.
(Reporting by Nicole Maestri; Editing by Richard Chang)