HOME DELIVERY IS ON-LINE LURE FOR WAL-MART

LIZA B. ZIMMERMAN

BENTONVILLE, Ark. -- If you are craving Maine lobsters, hankering for some mahimahi or maybe just want to stock up on a few aged T-bone steaks, a quick click on Wal-Mart's web site will have them at your door the next day.

The chain, based here, is providing access to home delivery of fresh seafood and meat items through its site on the World Wide Web.

"If we can offer this concept of one-stop shopping and offer everything, I really think we can accommodate, help and service more customers than we have in the past," noted Phil Martz, the director of Wal-Mart on-line, about his operation's new meat and seafood home-delivery service.

Aiming at a computer-literate, web-surfing market niche, the program offers a selection of fresh products that generally are more upscale than a Wal-Mart Supercenter's seafood department would typically merchandise, said executives involved in the project.

The chain installed the direct-delivery component in its cyberspace merchandising site about three months ago. "We went on-line with precooked smoked meat, then fresh meat, lobster and then fish," Martz said.

Wal-Mart's web site celebrated its first birthday at the end of July, he said.

Live lobster has its own listing on the site, where in late July two 1- to 1.5-pound live Maine lobsters were selling for $39.96, shipping included, delivered to your door. "From Shore to Door in 24 [hours that is]!!," Wal-Mart promised in advertising copy running alongside the digital color image of a lobster.

Other seafood options at the site included six packs of 6-ounce portions of mahimahi for $45.96, tenderloin of yellowfin tuna for $54.96, Alaskan halibut tenderloin for $49.96 and eight 6-ounce fillets of farm-raised Atlantic salmon for $49.96. These packages, as well as larger quantities such as 12-packs, were all available for next-day delivery.

"These are not items that most supermarkets carry," acknowledged Martz about the kinds of seafood Wal-Mart has chosen to offer on-line.

He said the current selection of seafood and meat available on-line was smaller than what was available in the stores, but it would soon be expanded.

"We will continue to roll it out slowly, and because we aren't short on shelf space we can offer a large variety," he said.

Martz added that he believed that some of the on-line seafood offerings were also more unusual than what a customer might find in a typical food store, and that the web site could serve as a marketing test pad for the seafood shops in the chain's supercenters.

"If we can offer things that are hard to get and make them available, then we'll know what customers want to buy and we believe that we will able to offer shark, sea bass and all the hard-to-get items," he said.

Regarding the premium price points, Martz said that the prices of the items offered on-line can be more expensive because shipping was included. Without that additional cost, he said, customers would typically pay on-line prices identical to those found in the store for the same items.

A call placed to a Wal-Mart Supercenter here revealed a substantial discrepancy between on-line and in-store prices.

At the Bentonville location, for example, mahimahi was $5.98 a pound and Maine lobsters sold for $8.97 a pound. Including shipping, the on-line per pound prices for those items were respectively about $20 and $16, based on an average shipment of two-and-a-quarter-pound lobsters.

Also at the Bentonville location, the meat department's non-aged T-bone was selling for $5.98, filet mignon for $7.99 and strip for $6.18 a pound. The steak assortment offered on-line cost an average of $15 a pound for aged versions of the same cuts.

"You are paying for convenience," said Paul Skillestad, Wal-Mart on-line coordinator and a sales and customer service manager at Landlock Seafood Co., a seafood processor and distributor in Carrollton, Texas, that supplies Wal-Mart.

Skillestad noted that "most on-line purchasers have an income of at least $50,000 to $55,000 a year on average or more," painting a lucrative portrait of the market segment that Wal-Mart on-line is after.

Martz said, however, that although Internet shoppers might be above average wage earners, he believes that on-line consumers are also value-minded. He added that he hoped the on-line and in-store prices would be more comparable in the future.

"The majority have been trained and educated to look for the best value and we hope that is what is going to distinguish us as we go forward," he said.

Martz said Wal-Mart has plans for expanding the on-line offerings, but he would not share specific information as to what the chain intended to add to the selection.

"Hopefully, we can continue to build fast enough so customers will continue to shop with us," he commented.

Landlock Seafood's Skillestad said that the next item that he plans to add will be shrimp, as well as some value-added products like stuffed salmon and sole.

In the past three months since the program's inception, direct-delivery sales of meat and seafood have been increasing, said Martz, "although it hasn't done tremendous sales." He declined to provide specific figures, but remarked that "it's been a novelty item."

Skillestad of Landlock estimated that since the service started, a dozen orders of fish and four dozen orders of lobster had been sold, the first of which was delivered to the District Attorney in Anchorage, Alaska.

The supplier said he thought that the sales had not dramatically increased since the program started "because of people's reluctance to turn their credit card loose over the Internet."

If Wal-Mart's on-line business "ever got to be half a percent [of the chain's total business] it would be tremendous. If I thought as big a percentage as 1% was going to be made on-line I could retire. Wal-Mart buys a lot of seafood," Skillestad remarked.

On the web pages, the seafood selections appear as attractively plated with a variety of vegetable side dishes. The items are displayed with the same species-specific recipes that come on recipe cards with the seafood when it's delivered.

"A lot of folks wouldn't purchase fish or live lobster because they don't know how to prepare it. And we find the recipe enhances the merchandise and gives people an option," said Martz.

Explained Skillestad, "We make the recipes real simple: five ingredients or less. Things that people might have in their condiment cabinets."

The seafood ordered on-line is shipped directly to the customer from Landlock's facilities, typically without ever passing through Wal-Mart's distribution system, said Skillestad.

A program of Landlock's -- instituted about a year and a half ago -- that provides live Maine lobsters on a next-day basis to Wal-Mart Supercenter locations nationwide laid the groundwork for the current on-line format, according to Skillestad.

"Wal-Mart said, 'Hey, we already have this great program, why don't we roll that out because it's easy?' It's not that logistically different sending it to the public or to a grocery store. It's still packaged the same way, you just don't get as many [pieces of fish]," Skillestad explained.

When shipping fish directly to consumers, "the only difference is with how it's supplied is that it is portion cut, and retailers buy whole fillets," he said. "We put it in Cryovac, label it, wrap it in wax-lined butcher paper and put an ice gel and point-of-purchase material on top of it," he explained. In addition to the recipes, the supplier said his company is "looking to provide other things in the package, like [the publication] Simply Seafood," a consumer publication typically distributed through supermarkets.

Regarding the prospect of overcoming any barriers in perception that the program might have to face, Martz of Wal-Mart told SN he hadn't heard of any customer concerns over the freshness of the product.

"If they are buying from a reputable catalog they are not going to be so concerned [about food safety], especially if you have a corporate name. I think that's the key," he explained.

The web site also offers a mixed pack of aged meat -- with four 6-ounce filet mignons, four 10-ounce strip steaks, four 16-ounce T-bones and a complimentary package of steak seasoning and baste -- for $119.96.

The meat items, which Martz estimates number from 30 to 40, are slated for delivery two days after the order is placed. He said that Wal-Wart uses a variety of meat suppliers, declining to identify them.

Skillestad, meanwhile, said some of its other retail customers are looking at their own versions of the on-line/home-delivery program. The seafood supplier services 2,400 retailers in a 23-state area, he said.