Snippets from the Walmart annual meeting that took place last Friday in Arkansas…
• The New York Times reports that Doug McMillon, the company's new CEO, captured the attention of attendees when he "talked about the company’s long-term strategy and ways to move ahead in a rapidly changing retail world," and specifically about how it will compete with Amazon, which has developed a potent online challenge to Walmart's longtime low-price dominance.
"There are so many new ways to serve customers,” McMillon said. “Technology, data and information are opening new doors for us to lead through. Our purpose of saving people money will always be relevant, but we’ll do it in new ways.”
• The Associated Press reports that "despite the festivities, Wal-Mart is under scrutiny. Revenue at established Wal-Mart stores in the U.S. has declined for five consecutive quarters. The number of customers has also fallen six quarters in a row at the division, which accounts for 60 percent of the company's total sales.
"Like many other retailers that cater to working-class Americans, Wal-Mart has been hurt by an uneven economic recovery that has benefited well-heeled shoppers more than those in the lower-income rungs. Moreover, shoppers are increasingly looking for lower prices at online rivals like Amazon.com and at dollar chains and pharmacies.
"As a result, Wal-Mart is opening more small stores, like Walmart Express and Neighborhood Markets. It's also pushing online grocery services. It's also adding money transfers and other services to cater to low-income shoppers. Meanwhile, Wal-Mart has more than tripled the number of items it sells online to more than 7 million from 2 million just 18 months ago."
In addressing these challenges, the Times writes, Bill Simon, president of Walmart US, said: "It’s a combination of just trying to get better in the day-to-day operations, merchandising, and dealing with the structural changes that are happening in the marketplace … We could be doing better, and we’re trying to be better, and I’m seeing momentum in the business that leads us to believe that that’s happening."
• According to Arkansas Business, Simon also said that "supercenters for us are still performing very well. The bottom 10 percent of our stores, they’ve been a pretty big drag on us. I get asked all the time, ‘Why don’t you just close them?’ We still make a lot of money on them. They’re profitable stores.
“We don’t have a significant number of stores that are negative cash flow stores. Our problem is a high quality problem, even our worst stores, the ones that are not having the same-store sales we would like, are still very good stores."
• Neil Ashe, the CEO of Global e-Commerce for Wal-Mart, talked about a groceries test the company is running in Denver…
We are testing both delivery and pickup,” Ashe said. “I will tell you that pickup has grown faster than delivery at this point in Denver, which has been very interesting to us. One of the challenges with grocery delivery is obviously you have to have a time slot for that delivery … In a market like Denver, which is a driving market, it is proving to be very attractive … to have the convenience of picking up the order whenever she wants. We’re enthusiastic about that.”
Ashe said that Walmart's goal is not to segment different kinds of sales, but rather offer shoppers a multi-platform experience from which they can choose.
"Our goal is not to have a percentage of sales that is specifically e-commerce,” Ashe said. “Is Denver e-commerce or is it retail? I’m not sure it really matters. It is solving a problem for a customer in a new way that no one else can do. We want to do a lot more of that. If that ends up being 100 percent of our business that’s awesome."
• Walmart said that its 2013 e-commerce business reached $10 billion, and projected that it will do $13 billion in e-commerce sales this year.
• The New York Times reports that Doug McMillon, the company's new CEO, captured the attention of attendees when he "talked about the company’s long-term strategy and ways to move ahead in a rapidly changing retail world," and specifically about how it will compete with Amazon, which has developed a potent online challenge to Walmart's longtime low-price dominance.
"There are so many new ways to serve customers,” McMillon said. “Technology, data and information are opening new doors for us to lead through. Our purpose of saving people money will always be relevant, but we’ll do it in new ways.”
• The Associated Press reports that "despite the festivities, Wal-Mart is under scrutiny. Revenue at established Wal-Mart stores in the U.S. has declined for five consecutive quarters. The number of customers has also fallen six quarters in a row at the division, which accounts for 60 percent of the company's total sales.
"Like many other retailers that cater to working-class Americans, Wal-Mart has been hurt by an uneven economic recovery that has benefited well-heeled shoppers more than those in the lower-income rungs. Moreover, shoppers are increasingly looking for lower prices at online rivals like Amazon.com and at dollar chains and pharmacies.
"As a result, Wal-Mart is opening more small stores, like Walmart Express and Neighborhood Markets. It's also pushing online grocery services. It's also adding money transfers and other services to cater to low-income shoppers. Meanwhile, Wal-Mart has more than tripled the number of items it sells online to more than 7 million from 2 million just 18 months ago."
In addressing these challenges, the Times writes, Bill Simon, president of Walmart US, said: "It’s a combination of just trying to get better in the day-to-day operations, merchandising, and dealing with the structural changes that are happening in the marketplace … We could be doing better, and we’re trying to be better, and I’m seeing momentum in the business that leads us to believe that that’s happening."
• According to Arkansas Business, Simon also said that "supercenters for us are still performing very well. The bottom 10 percent of our stores, they’ve been a pretty big drag on us. I get asked all the time, ‘Why don’t you just close them?’ We still make a lot of money on them. They’re profitable stores.
“We don’t have a significant number of stores that are negative cash flow stores. Our problem is a high quality problem, even our worst stores, the ones that are not having the same-store sales we would like, are still very good stores."
• Neil Ashe, the CEO of Global e-Commerce for Wal-Mart, talked about a groceries test the company is running in Denver…
We are testing both delivery and pickup,” Ashe said. “I will tell you that pickup has grown faster than delivery at this point in Denver, which has been very interesting to us. One of the challenges with grocery delivery is obviously you have to have a time slot for that delivery … In a market like Denver, which is a driving market, it is proving to be very attractive … to have the convenience of picking up the order whenever she wants. We’re enthusiastic about that.”
Ashe said that Walmart's goal is not to segment different kinds of sales, but rather offer shoppers a multi-platform experience from which they can choose.
"Our goal is not to have a percentage of sales that is specifically e-commerce,” Ashe said. “Is Denver e-commerce or is it retail? I’m not sure it really matters. It is solving a problem for a customer in a new way that no one else can do. We want to do a lot more of that. If that ends up being 100 percent of our business that’s awesome."
• Walmart said that its 2013 e-commerce business reached $10 billion, and projected that it will do $13 billion in e-commerce sales this year.
- KC's View:
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Saying that a company is trying to be different, to adjust to new marketing and consumer realities, is different from actually doing it. And Walmart has an enormous infrastructure to reorient, which makes it in credibly difficult.
That said … I do think that McMillon, Simon, Ashe and their compatriots seem to be focused in the right direction … and given an opening, they could make this work.
