BUSINESSWEEK ONLINE : DECEMBER 18, 2000 ISSUE
INFORMATION TECHNOLOGY

Walmart.com vs. Amazon: This Race Isn't Even Close


Conventional wisdom is a funny thing. This time last year, Amazon.com Inc. (AMZN) was king of the world. The company was worth more than $40 billion, CEO Jeffrey P. Bezos was Time's Man of the Year, and thousands of you--you, because I can't buy tech stocks--were getting rich going along on Jeff's ride. This year, to some, Amazon looks more like the Titanic than the most famous line in the movie about it. Its market cap has slid to a lowly $9.4 billion. And to hear some pundits tell it, the big boys are coming to get Jeff and kill his company dead, the biggest bully of all being Wal-Mart Stores Inc. (WMT)

Trouble is, the case for Amazon getting crushed by Wal-Mart doesn't stand up when you do some side-by-side comparing of their Web sites. What's wrong with Walmart.com? Put simply, it settles for taking orders for the products people come looking for rather than enticing them to buy things they hadn't even thought of buying. Amazon is much more ambitious. Once you've visited the site, it knows who you are when you come back and suggests items based on what you bought before. Customers can make a purchase with one click of the mouse. The site's easy to use--and fun to boot.

Our little test was simple: I shopped at each e-store for books, toys, records, and electronics to judge the convenience and the value each site provides. I like Wal-Mart's traditional stores fine--they're inexpensive for what you get, and when I've shopped for complex goods such as consumer electronics, I've found good sales help. But I want my shopping experience to include a bit of entertainment, whether I'm online or not. Part of the value a traditional store provides is giving me ideas and making me feel comfortable. With their ''greeters'' and easy-to-follow floor plans, Wal-Mart stores do a pretty good job of this. But Walmart.com doesn't measure up to its own brick-and-mortar stores, much less to Amazon.

In fact, it's just plain boring. The eye-glazing treatment begins at the home page, which is a long list of categories. But to understand Walmart.com's true dullness, try shopping for books. Consider Stanford law professor Lawrence Lessig's Code & Other Laws of Cyberspace. At Walmart.com, you learn in three sentences that Code was published last year, is ''categorized by the Library of Congress as intellectual property,'' that it weighs 1.32 pounds as shipped, and that its International Standard Book Number is 046503912X. This data may help Walmart.com's warehouse keep track of inventory, but it didn't do diddly for me.

It's a different scene at Amazon. You get reviews from Amazon itself, from The New York Times, and from Amazon users who love and hate the book. You're also alerted to related books, just as a good salesperson would do. And you learn that sales have been heavy to people working for the U.S. House of Representatives and the Justice Dept.--a measure of the book's influence.

This isn't about frills. Walmart.com doesn't even give customers the basics. Take electronics. I went shopping on both sites for portable CD players and boomboxes, and Amazon's superiority could hardly be missed. Both sites had plenty of good machines at prices I was willing to pay, but only Amazon had enough information to help me make good decisions. On a GPX CD player, for example, the Amazon review and 33 user reviews were supplemented by a table that let me compare the GPX' features with those of other players. Simple one-click boxes referred me to accessories and batteries. At Walmart.com, I got a jargon-filled quickie list of features with no explanations and the news that a similar player weighs 1.9 lb. I also got fewer choices, which surprised me. I bought the player at Amazon.

The personal touch matters online as well as off, and Walmart.com just doesn't bother to reach out to shoppers the way Amazon does. In category after category, I found Walmart.com's recommendations to be off target. Why? They weren't in any way tailored to my tastes and interests. Among the new CDs it offered me on a single list of ''new releases'': ones by Pope John Paul II and the rapper Nas. In contrast, on Amazon, once I filled in a questionnaire about myself, it showed me all kinds of books and movies I would consider buying, including Stephen King's On Writing: A Memoir of the Craft, which I purchased. I was stunned by how quickly the site zoomed in on my interests.

In fact, if anything, Amazon was a little too responsive. Just when I thought I had it trained to recommend stuff I like, I went and bought one lousy Backstreet Boys CD--for a teenager, not for me. Amazon decided I was even more juvenile than I actually am and offered as a top video pick Our Lips Are Sealed, starring the Olsen twins. It had no way of detecting that I had bought a CD for someone else. The choice was, to put it mildly, a far cry from the boxed set of The Sopranos videos that Amazon had been pitching me before.

While Amazon took me almost effortlessly to where I wanted to go, Walmart.com's navigation features missed the mark more often than not. It couldn't locate some of the popular toys for 3-year-olds even though one toy in question was from the well-known brand Playskool. My trip to its online photo store, which Walmart.com promotes on its home page, landed me at a broken link, one of many niggling performance problems I noticed. My search for romantic comedies starring Tom Hanks turned up Nightmare at 43 Hillcrest, a drama about a wrongful accusation of drug-dealing, before his hit Sleepless in Seattle.

Prices at the two sites were roughly equal. I would have paid the same $14.97 at both for cyclist Lance Armstrong's It's Not About the Bike. Walmart's price beat Amazon's for the Britney Spears CD Oops I Did it Again, $11.38 to $13.28. But Amazon underpriced Walmart for a Sony Mavica digital camera, $449.99 to $498. Shipping costs at the two sites were about the same, too. On Walmart, for arrival in three to six business days, shipping for a music CD cost $2.88, and $3.57 for a DVD. Amazon's price: $2.98 for either a CD or a DVD. Shoppers who are really concerned about price should probably bag both sites and use shopping ''bot'' sites that comb the Web for the lowest prices on specified goods.

To sum up, Spike Lee said it best in a Nike Inc. (NKE) commercial about women's hoops a few years back: Basketball is basketball, and athletes are athletes. Translation: It doesn't matter if you started out as an e-store or a bricks-and-clicks store. What matters is whether or not you've got game. Right now, Amazon.com is a very good store, and Walmart.com is still learning the online fundamentals.

By Timothy J. Mullaney
Mullaney writes the Clicks & Misses column for Business Week e.biz.

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