SCDigest Editorial Staff

The News: A few weeks ago, Wal-Mart promoted Carter Cast, formerly in charge of Wal-Mart's online store, to lead the U.S. business strategy function for the company. This has prompted a lot of speculation about what the company may be doing to gain an even stronger presence on the web, and to integrate its web and store strategies more aggressively.

The Impact: Some observers wonder whether Wal-Mart will adopt some of Amazon.com’s strategy, and market products on its web site that it doesn’t stock in its DCs, requiring vendor’s to drop ship, perhaps adding to capabilities and systems needed by vendors.

The Story: On Feb. 15, as one of a number of recent executive moves, Wal-Mart named Carter Cast, formerly president of the retailer’s on-line business, to lead business strategy and strategic planning initiatives for Wal-Mart Stores' U.S. division. (See Wal-Mart Announces New Head of U.S. Business Strategy and Names New President and CEO of Walmart.com)

The move has naturally led to speculation that Wal-Mart will make moves to better integrate its current web and store front businesses, which have been run very separately to date – moves that could have business impact on Wal-Mart competitors, and a supply chain impact on its vendors.

“For several years, Wal-Mart products have been transparently sourced via Froogle, Yahoo Shopping, Amazon.com, and other shopping resources,” Michael Banks, president of Select Marketing and a retail industry expert, told Supply Chain Digest.

“I know through personal discussions that Wal-Mart has watched the growth of these sales as well as those from their own web site carefully, with an eye to fully and transparently integrating their bricks with their clicks. Carter Cast has overseen and driven much of this effort, and has been promoted to a position from which to consummate this integration,” Banks added.

Banks notes that Amazon.com sells a growing amount of merchandise through its site that is shipped direct from manufacturers and distributors – and says Wal-Mart may consider a similar approach.

“Wal-Mart has been watching and learning and, as they have in so many other areas of their operations, is prepared to step out on its own with a system that closely approaches the professionalism of the Amazon.com model,” Banks told us.

That could put a new fulfillment requirement on vendors to Wal-Mart – some of whom may not have strong direct-to-consumer capabilities.

There may even be an RFID play here – as item-level RFID tags would help provide information and capability for store-level return/exchange/repair for products ordered over the web, Banks added.

“I’m not the only observer who sees this picture developing,” Banks said, noting that Wal-Mart has the potential to offer a formidable challenge to both Amazon.com and its traditional competitors if it can provide a integrate web and store front to consumers.

Do you think Wal-Mart will more aggressively integrate its traditional and dot com strategies? What will be the impact on Wal-Mart competitors – and suppliers? Let us know your thoughts.