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Retailers broadening horizons

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The reshuffling of the retail landscape is proceeding, indeed accelerating, at a pace undreamed of as recently as five years ago. This is not a reordering of companies or priorities or strategies. It is a reordering of people.

Most recently, Michael Francis, the legendary retail marketer, has signed on at Walmart, as the world’s largest retailer continues to seek guidance on extending its relationship to its customers, a group that once flocked to Walmart to save money. What’s startling about this appointment is that Francis, until relatively recently the marketing genius behind Target, was once viewed as the key to that retailer’s success in effectively competing with, and sometimes outdoing, Walmart.

The appointment of Francis comes on the heels of another key Walmart hire: Early in December the retailer named George Riedl to run health and wellness, at a company that had previously promoted almost entirely from within the organization. Riedl’s experience, it will be remembered, had been gained almost entirely at Walgreens, the chain drug retailer that has emerged in recent years as a bona fide competitor to Walmart.

What’s going on here?

Whatever is going on, these and other personnel transplants have got to be viewed as a remarkable effort to transform the old ways of doing things amid the verbalization that those ways no longer work as well as they once did. Sticking with the Walmart example, Francis and Riedl are bound to exert an influence on an organization that once believed it had created a magic formula for attracting customers. If that formula is no longer foolproof, it remains the core anchor of a $500 billion enterprise, a company that continues to dwarf all competition.

The bigger lesson here is that retailing, once an inbred industry, is becoming aware that there is more than one way to do business. Price, to be sure, remains the main driver for consumers. The idea of saving money, or at least not spending inordinately for basic merchandise, still drives the shopping trip. But it is no longer the only driver. Walmart, for perhaps too long, viewed price, or value, as the ultimate driver, perhaps neglecting the idea that customers seek other incentives as well. Francis and Riedl, it is likely hoped, will help emphasize these incentives.

Much the same set of dynamics is emerging at other mass retail organizations. So it is that major retailers have come to routinely consider applicants from other trade classes when searching for new staffers. And so it is that retailers that only knew of one approach to doing business now consider alternate strategies. With these strategies have come new ways of thinking about business — and new ways of doing business.

Retailing can only benefit from this new embrace of old ideas. For too long the industry has relied on established ways of doing business, and such ancient practices as putting the onus on the supplier community to provide retailers with unbeatable reasons for attracting customers.

This, then, as previously stated in many places, is the dawn of a new era in mass retailing, an era of more intense competition, more exciting formats, more competitive marketing and merchandising ideas. For if Walmart will likely become more competitive, so, too, will Target. And Walgreens. And CVS. And Albertsons. And a group of mass retailers that have until now not had the strategies to compete with the major players. The field is leveling — but at a higher level.

Finally, it should be noted that these Walmart personnel moves are not an ending, but a beginning. There is a wealth of retail talent out there, much of it searching for new opportunities. It only remains for retailers to determine they are ready for those opportunities and, with them, open the door for new thinking, new excitement, new strategic ­adventures.

The good ones certainly will.


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