Inside This Issue - Opinion
Walmart: a work in progress
November 15th, 2010
by David Pinto, Editor
Even the casual visitor to Walmart’s Bentonville, Ark., Home Office can’t avoid noticing the changes, both superficial and significant.
On landing at the Northwest Arkansas Regional Airport, the visitor’s mind wanders back to a time when the facility didn’t exist, when calling on Walmart either meant landing at Fayetteville, 45 minutes to the south, or in Tulsa, two hours to the west by car. Not only is the new airport a reality, it is currently being expanded. An additional runway is under construction, as is a new terminal building capable of accommodating additional gates.
Along the road to Walmart’s Home Office 20 minutes from the airport, one encounters the sign informing the visitor that he is entering Bentonville, population 28,680. Thirty years ago the town contained just 3,000 residents.
But the most significant changes confront the out-of-towner upon arriving at the Home Office itself, a modest, low-slung facility just to the east of Walton Blvd., one that hasn’t changed all that much since the time, 30 years ago, when Sam Walton patrolled the lobby, asking questions, charging visitors five cents for a cup of coffee, and determining what merchandise the vendors were selling and how their products were performing.
Today, it is all but impossible to find a parking space anywhere near the headquarters building, and a trek of 10 or 15 minutes to keep an appointment is not uncommon. Even the Walmart associates have difficulty parking, unless they are physically handicapped or have achieved that elevated status where the “reserved parking” signs apply to them. Supplier parking spaces are limited to fewer than two dozen, hardly ample at a time when hundreds of suppliers descend on Walmart in a typical week.
Inside, the simple procedure by which visitors were once announced and checked in has long since been replaced by an elaborate computer-based registration process that prints out a badge that is then claimed at the visitor’s desk. In another, often frustrating departure, the associates who control entry to the merchants’ offices no longer phone the appropriate office to announce the arrival of a supplier or guest. Today they e-mail that office.
Buyers, young as ever and, in many cases, new to their assignments, still come to the lobby to greet suppliers. They are more cordial, in the main, than they had been in recent times. In many cases, that cordiality is based on friendship or respect. Clearly, however, they have been told at the highest levels to once again begin treating suppliers with the respect once routinely accorded them as indispensable partners in Walmart’s success.
Just as clearly, however, some merchants remain unclear about the supplier’s role and have not yet determined just how to respond to Bill Simon’s mandate, as head of Walmart’s U.S. business, to return that business to the halcyon days when complete assortments, vendor partnerships and a collaborative dedication to low prices and high in-stock positions combined to insure Walmart’s primacy in the retail firmament. Many buyers, schooled in the now-discarded program that stressed pared assortments, indifference to supplier priorities and prices that, while low, were not necessarily the lowest, remain unsure of themselves in the new order of things.
At the company’s senior levels, however, Simon’s leadership is seen as an eleventh-hour reprieve, a much-needed injection of new thinking and new decisiveness. The senior merchandising team that Simon put in place late last summer is uniformly dedicated to restoring SKUs, lowering prices, and eliminating such short-sighted practices as zone pricing and misplaced promotional initiatives, while the operating executives are committed to returning to the stores that cluttered and well-shopped look that announced bargains in every aisle and had customers routinely ransacking the shelves.
Duncan Mac Naughton, the retailer’s most significant merchandising addition — he arrived from Walmart’s Canadian unit last month to head up consumables, health and wellness, and Walmart.com — is quickly settling in, getting the feel of Bentonville and of the Walmart way of doing business, and insisting, as all strong merchants do, that he has lots to learn, most notably about the health and wellness business, which is new to him. Based on his performance in retailing to date — in a resume that includes significant contributions in both food and drug retailing — Walmart’s decision to bring him to Bentonville will very quickly pay big dividends.
So Walmart, like the Bentonville community that has been transformed in two generations from a town of several thousand into the fastest-growing urban area in America, remains very much a work in progress.
And for those associates who had become disillusioned and those suppliers who had learned to live with frustration, Bill Simon’s promise to return the nation’s largest retailer to its glory days is being hailed as exactly what it is: a long-overdue call to action that is simply too compelling to resist.