business news in context, analysis with attitude

Sometimes, when covering a story, one piece of the narrative gets so much attention that it obscures another piece...which may, in fact, be just as important.

In this case, the Walmart story got most of the spotlight last week was the decision by the company to invest in smaller store formats. But the piece that got lost, upon further review, was the fact that Walmart confirmed its plans to test online grocery shopping in 2012, and plans to use the small stores as drop-off locations for products ordered online - which would enable those small stores to actually sell a lot more SKUs than they are able to physically carry.

In addition, Walmart’s US CEO, Bill Simon, said that he anticipated that Walmart’s efforts would be “enabled by learnings” gleaned from Asda’s online efforts in the UK.
KC's View:
Thank goodness for the Financial Times, which covered the e-commerce piece in its blogs.

The thing is, if Walmart gets the small stores right, and the online component right, it becomes an even more formidable competitor than in the past with a game-changing combination. Companies and executives that do not recognize this ... and do not make plans for how to combat it ... proceed at their own risk. Denial is not an option.

Of course, it is not a forgone conclusion that Walmart will get it right. It has made missteps before, and other companies - like Tesco - have been less than successful in gauging how to make small formats work.

But you can’t proceed on a wing and a prayer, hoping that Walmart won’t get it right. You have to prepare for what you think can happen, not what you hope will happen.