Inside This Issue - Opinion
Back on track, Walmart prepares for what’s next
January 28th, 2013
After experiencing its share of ups and downs in recent years, Walmart’s U.S. business is on a steady course, one aligned with the company’s philosophy, history and position in the marketplace.
That’s the impression that Bill Simon conveyed during an appearance at the National Retail Federation’s Big Show.
Responding to questions following his formal presentation, the president and chief executive officer of Walmart U.S. succinctly stated the retailer’s mission: "We’re doing what we do best — save people money so they can live better. We’re operating our business model. We try to keep our costs down and invest every saving in price. When we can do that, our business grows."
The clear vision that now guides the company follows a period of experimentation several years ago when, in an attempt to increase sales per square foot, Walmart streamlined its merchandise mix and reduced the clutter in its stores with an eye toward appealing to more affluent consumers than traditionally shopped there.
The initiative, which seemed to make sense at a time when, in Simon’s words, "there appeared to be no end to the top," backfired. "What we found is that our customers really wanted us to be Walmart. They like who we are, for the most part, and they really respond to who we are."
The return to its core business model, which reversed a negative trend in domestic same-store sales and put the retailer back on track, shouldn’t be mistaken for a willingness to be satisfied with the status quo ante. Simon made it abundantly clear that Walmart fully understands the forces of change that are reshaping retailing, and that it is determined to get out of ahead of them.
Walmart will build on its heritage of utilizing technology to enhance operations and improve the customer experience, he said, and work to further capitalize on the new opportunities created by e-commerce. One priority is to effectively meld the store-based and virtual supply chains, a task that might include using the 4,000 Walmart Supercenters as small-scale distribution centers that support fulfillment of e-commerce orders.
"We’ve made a lot of progress," Simon noted. "But much like everything in our industry, there’s no end. Our fiscal year concludes at 12 o’clock on January 31, but at 12:01 you’re into next year and you’d better be running at full speed."