Thursday, March 10, 2016

Some Interesting Thoughts On Walmart

Walmart has not done greatly those past few years. Even though they have invested massive amount of money to keep up with the online competition, they are failing to keep the growth pace of Amazon, and is still far behind. Walmart's online sales only represents 3% of its overal business, while Ecommerce accounts for about 30% of overal commerce nowadays...

I read a very interesting article about Walmarts problems. It outlines well the issues of the American giant. Especially, its news to shut down 269 stores worldwide shows well how important will be the strategy the firm will take in the next few years. 

If I were to highlight one specific paragraph: 

"There are many places where Walmart has missed keeping up with its retail competitors. But consider just one. If you shop at Walmart regularly for the items it specializes in—everyday supplies like diapers, paper towels, toothpaste, laundry detergent, deodorant, and corn flakes—well then Walmart has you on a kind of monthly payment plan. You go to Walmart, you fill your cart with vital supplies for your family, and as you check out, you know that almost everything in that cart will be gone in a week or two. And you’ll have to go back to Walmart and resupply.So why hasn’t Walmart figured out how to automate that process for us—how to make it frictionless, thoughtless, even brilliant? Way back in 1961, when Walmart was born, that was a core element of Sam Walton’s insight: Put everything in one store and assure your customers that the merchandise was as cheap or cheaper than anywhere else. Make shopping easy.Walmart has all that data. Walmart knows what people buy, it knows the pacing, it knows how often you need Tide versus Pampers versus Windex. And Walmart knows something else, too: It knows that no one, in 2016, relishes the effort of stocking up on all that stuff. For modern families, that’s not shopping—it’s not like wandering into an Apple store or even a Whole Foods. Those kinds of purchases are simply logistics, family-scale."
And this is a good question, because Walmart is facing Amazon which tries actually to do exactly the same. Provide the best prices with the best service in terms of automating customers decision making process.
Now I still believe Walmart has a lot of great assess that makes him one of the most efficient retailer on earth. But the struggles happening to Walmart shows well what kind of transformation the retail business is facing right now.