Walmart – Thinking Outside the Box

Walmart conquered America with “Big Box” stores.

BENTONVILLE - where the world’s biggest retailer hones some of the new ideas which, it hopes, will help it keep its crown.

Touch & Feel of Vegetables – Quicker checkout processes.

Evergoing challenge for Brick & Mortar –“Evolve or Decline”.

Macy’s and Gap share prices ↓25%.American e commerce= 9.3% in 2014 to

10.4% in 2015.Amazon Sales in North America

rising by nearly 30% in 2015.

Value PropositionsEDLP – “Every Day Low Prices”.Food, toothpaste, soap, paper towels etc.– Walmart is

the King.Supply chain being the main focus Walmart changed

the product strategy of companies like P&G.Operational Efficiency: Noodles shape change: 500 lorries off the road. Concentrated version of detergent: 57000 tons of cardboards & 400Mn gallons of water saved.Conflict: Job destroyers or creators.i. 11% of Chinese imports to US in 2013.ii. 400,000 American jobs displaced between 2001-2013iii. Walmart claims 2/3rd of products are “sourced” in

America.Capitalist approach & commonly called as “Mr. Sam”.

Walmart is raising workers’ wages, for better service.

More than $1 billion to e commerce this year while Last year $10.5 billion into IT.

Main issue is growth in Sales and the challenge is to Merge.

Strategy: Operate with the lowest costs, sell at the cheapest prices and watch sales grow. 

Bentonville BelieversDiscipline in terms of employee involvement.Each employee is sure of his/her tasks,or “go-

dos”Decline in leadership: Low price is not a unique

factor – competitors intervention.Amazon – Women clothing alone1.8 Mn of

product portfolio.

WALMART vs AMAZONLow price vs Price, Range &

Convenience.Fast shipping.Amazon prime.Amazon dash.Pharmacy chains such as Walgreens an

d CVS faces huge threat.Walmart being less vulnerable because

groceries and food sale is not easy online.

Narrowing down wealth gap of A’s & W’s customers is a threat to Walmart. (Chart)

Clicks vs BricksLess profitability.Same customer segment target. “You pour from one bucket into a less profitable bucket”.Self cannibalization.Challenges of closing down

underperforming shops and cutting down network size

Retails space per person, sq. metre.. (Chart)

Strategy PhoenixOffer more goods at low prices to more

consumers. “The best thing you can do is always someth

ing that makes what you already do better,”.Combining of existing Brick & Mortar stores,

supply chain, assets etc. with growing e-commerce business and array of new digital and analytical tools.

New technology platform – how website works – how to manage customer payments and analyses data.

Lowered volume of boxes shipped by about 1/3rd by using 27 types instead of 12.

Combining sales figures from its shops and data from its website to discern which goods to keep where.

Buy from online and collect from stores at no charge.

 Eg. In Rogers, online shoppers park in special bays and their Walmart app signals their arrival. Staff roll out crates of groceries, load them into vehicles & send shoppers their way.

Boost sales by making them more attractive, easier places to visit.

Raised its minimum wage to $10 this year to improve customer service.

Easy to read different department signs.

App to pinpoint a salsa or pram. View expanded selection online and pay.Staff with handheld devices with apps to

simplify common tasks.Scrappers to remove icing at bottom of tubs

saves 35+ lorry loads of butter cream icing/year.

LatestAmazon prime annual fee $99 vs Walmart’s

testing of $49 for free delivery.Shipping cost and technology still makes less

profitable in long term.More cutting down of price….. But….Walmart must now contend with millions of s

mall ones, piled high on America’s doorsteps.