When will Wal-Mart (NYSE: WMT ) learn?
The world's leading retailer is once again taking a stab at a hot online trend -- this time, free Internet classifieds. Taking a potshot at both Craigslist and eBay's (Nasdaq: EBAY ) Kijiji, Wal-Mart has turned to Oodle to power a platform for the sale of local goods.
This certainly isn't the worst idea that Wal-Mart has ever had, but let's revisit some of this old-school company's other lame-brained forays into the perilous world of new media:
- Wal-Mart once tried to hop on Netflix's (Nasdaq: NFLX ) coattails, offering a mail-based DVD rental service. It pulled out in 2005, handing over its meager subscriber base to its big red rival.
- Wal-Mart launched -- and botched -- a social-networking experiment two summers ago, aimed to get back-to-school teens to frequent Walmart.com. It lasted less than two months.
- A Wal-Marting Across America blog, seemingly written by fans taking an RV trek through Wal-Marts around the country, backfired when it was exposed as a company-bankrolled publicity move.
And don't even get me started on Wal-Mart's lackluster attempts at MP3 downloads (where the company has disappeared into a distant third place), selling dial-up Internet access, or drawing the ire of the Campaign for a Commercial-Free Childhood by tying online wish lists for kids to animated Wally and Marty elves.
The stakes are low
Thankfully, Wal-Mart has less to lose this time. It's simply slapping its brand on an outsourced -- yet proven -- virtual classifieds platform through Oodle. The move resembles how Playboy (NYSE: PLA ) launched its PlayboyU social networking site last year on the back of Ning.
The move's a decent gamble on Wal-Mart's behalf. These white-label ventures may not bring anything new to the medium, but they're easy to walk away from with minimal scrapes if they don't pan out. With Wal-Mart's recent strikeout streak, that may be sooner rather than later.
The fine line between "success" and "suck less"
If this works, it's because Wal-Mart delivered the traffic to make it effective. The company's site knows how to draw a crowd, particularly over the holidays.
Wal-Mart's experiment is unlikely to take a material bite out of Craigslist. Walmart.com itself can't even hold up to the whirlwind of traffic at the leading online classifieds website. There's no shame in that. According to Alexa, Target (NYSE: TGT ) and even Amazon.com (Nasdaq: AMZN ) also trail the mostly free commerce exchange that Craig Newmark created 13 years ago.
Unfortunately, Wal-Mart also needs to look around. Why aren't Amazon.com and Overstock.com (Nasdaq: OSTK ) all over this online classifieds space? Both online retailers had no problem following eBay into auctions.
Could it be that folks who go to a website to shop -- and wind up finding an alternate product for less through a local transaction on a free listings site -- actually hurt an online retailer? It seems that way in theory.
The ball is in Wal-Mart's court; let's see whether it proves a naysayer like me wrong. The way things have been for Wal-Mart outside of its namesake e-tail site, I'd say that it's facing some stiff odds.
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