Tuesday October 3, 4:22 pm Eastern Time
Wal-Mart move to suspend online site seen dramatic
By Anna Driver
CHICAGO, Oct 3 (Reuters) - Wal-Mart Stores Inc.'s (NYSE:WMT - news) recent move to shut its online shopping site for a few weeks to add improved search capabilities is highly unusual and suggests a major change is underway, analysts said on Tuesday.
``Shutting down a site for anything more than a few minutes is definitely dramatic by e-commerce standards,'' Ken Cassar, senior analyst for online retail at Jupiter Communications Inc (NasdaqNM:JPTR - news) said. ``It suggests that whatever is going on is a fairly big deal.''
Typically, an e-commerce company will run an old site at the same time it relaunches a new site to ensure that service is not lost, Cassar said.
On Sunday, Wal-Mart posted a note on Walmart.com notifying customers that the site would be closed for a few weeks for a planned remodeling before the holiday season.
``The Walmart.com site is an evolutionary site,'' Walmart.com spokeswoman Cynthia Lin, said. ``We had planned this closing back in the summer.''
After the overhaul, Walmart.com will have merchandise grouped in categories like home electronics or hot gift items, Lin said.
One Wall Street analyst who covers online retailers like Amazon.com Inc. (NasdaqNM:AMZN - news) and eToys Inc. (NasdaqNM:ETYS - news) said Walmart.com's decision to shutter operations suggests that success in cyberspace may be harder than expected for the retail behemoth.
``Online is entirely different,'' Kevin Silverman, analyst with ABN AMRO, said. ``I suspect they may be having trouble with logistics and they may have trouble with average order size.''
Wal-Mart is known for its top-notch logistics system that efficiently ships product to its more than 3,000 U.S. stores, but shipping parcels to individuals who ordered from its Web site may pose a challenge, Silverman said.
Palo Alto, California-based Walmart.com was established earlier this year by Wal-Mart Stores and venture capital firm Accel Partners. The retailing giant's Internet operations are headed by former Gap Inc. (NYSE:GPS - news) executive Jeanne Jackson.
Shares of Bentonville, Arkansas-based Wal-Mart were off 1/16 at 45-3/4 in late afternoon trade on the New York Stock Exchange.
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