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graphic looking to stir things up
Head of online unit says he doesn't want to be another Amazon but he has big plans for the site.
October 30, 2003: 3:52 PM EST
By Parija Bhatnagar, CNN/Money Staff Writer

NEW YORK (CNN/Money) - CEO John Fleming says he doesn't want to be another, but he does want to stir things up at the online unit of the world's No. 1 retailer.

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graphic CEO John Fleming talks about the company's holiday strategy and future plans for its online unit.

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"We've been asked what our single biggest challenge is. I said our single biggest opportunity is building brand awareness," Fleming said in an interview with CNN/Money Wednesday.

Fleming said the company's latest initiative to revamp the unit is about providing more information, broadening its product assortment and improving service to its customers.

"Wal-Mart overall is great at building the business primarily through organic growth but not necessarily at marketing," he added. "The last couple of years, we [] have had our heads down building infrastructure. It's time to look up and get some action."

The revamped site will now let customers select and buy products online and pick them up at a Wal-Mart store, including digital cameras, contact lenses, tires and pharmacy products.

Fleming was in New York to meet and greet reporters and editors, his first such visit since he assumed the role of chief executive last November. Prior to that, he was's senior vice president of merchandising.

After admitting to's shaky beginnings -- the unit was first launched in 1996, relaunched in January 2000 as a joint venture and subsequently fully acquired by Wal-Mart -- Fleming said now it's all about staying the course.

"We have the potential to grow very large. We're averaging 3.5 million users a week and expect to grow to 11 million a week during the holidays," he said. "E-commerce sales overall are expected to increase 19 percent within the next five years. We think we'll grow faster than that."

He declined to discuss sales or financial results for the online operation.

"This is still a test run for us," said Fleming. "We're looking for opportunities to grow and cut costs." That includes expanding the online furniture category and making the new online DVD rental service more competitive.

"This doesn't mean we're taking a shot at Netflix (NFLX: Research, Estimates)," he said, referring to's main rival in the space. The 5-year-old DVD-rental company based in Los Gatos, Calif., has more than 1 million subscribers.


"The way we see it, the DVD rental service was simply the missing piece for our customers," Fleming said. "We were already selling DVDs, DVD players and recorders."

Nevertheless, is already challenging Netflix's price structure, offering unlimited service for $15.54 a month, compared to Netflix's $19.95 monthly charge for a similar service.

"We're always looking at what the competition is doing," said Fleming. "But do we want to become like Amazon? No. Amazon is an online shopping mall. It benefited from building a great asset early in the game. We're about store integration and expanding the customer reach to Wal-Mart stores."

Wal-Mart (WMT: Research, Estimates) stock edged lower in New York Stock Exchange trading.  Top of page

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