Focus on the issues facing Walmart and what they can focus on to improve their business and image for the future.
This is written from the consultant point of view. For example, I represent a consultant company presenting my ideas to Walmart on what I think their issues are and what can be done to fix them.
Sprucing Up Walmart
For more than half a century, Walmart has prided itself onproviding value to customers by being a low-price leader.But the consumer mindset is changing. Now “value” alsomeans convenience, ease of finding what you want, andthe ability to get exactly what you want when you wantit. Nationwide dollar-store chains often have lower pricesthan Walmart, so that point of competitive advantageis fading. And thanks to Amazon.com and other onlineretailers, consumers can shop from home wheneverthey like, compare prices, and know immediately what isavailable.
Contrast this with the experience many Walmart shopperspreviously had when they entered a store—low inventory,disorganized aisles, unhelpful staff, and an overalldepressingatmosphere. The company’s online presencewas about the same. The site was difficult to navigate andattempts to search for products were frustrating at bestand more often fruitless.
Named Walmart’s CEO in 2014, Doug McMillonset out to change this. “What people think about thecompanyis important,” he noted. And at the moment,people weren’t thinking about value and low prices whenthey thought about Walmart. McMillon enacted a numberof changes. First, since the company had earned areputationof treating its store employees poorly—lowwages, few benefits—while profits were in the billionsof dollars, Walmart announced it would increase itsminimumwage.
Second, the company asked for and paid more attentionto employee feedback. Recurring issues included thedress code, store music, and even store temperatures. Soclothing rules were relaxed, more variety in music was introduced,and thermostats were adjusted. The companyhopes improving employee morale will translate into abetter experience for customers, thereby changing someof the negative images.
Walmart’s Web presence was another target for bigchanges. With Amazon as the store’s biggest competitor,McMillon wanted to offer customers more items, pick-upoptions, and ways to meet their needs and demands—likean online grocery ordering service. This means a new way ofthinking about marketing and inventory across the board.
McMillon was able to see how consumers have changednot only what they want, but also the way they want it—whether from the hands of happy employees or with thesimple click of a button. The question remains: Will his actionsbe enough to change the way consumers see Walmart?
Sources: S. Halzack, “Why Walmart is Ditching Its Celine Dion Soundtrack and Getting a DJ,” Washington Post, June 3, 2015, http://www.washingtonpost.com/news/business/wp/2015/06/03/why-Walmart-is-ditching-its-celine-dion-soundtrack-and-getting-a-deejay/; B. Ritholtz, “Walmart Learns to Live without Everyday Poverty Wages,” Bloomberg View,June 11, 2015, http://www.bloombergview.com/articles/2015-06-11/Walmart-lives-without-everyday-poverty-wages; and B. O’Keefe, “The Man Who’s Reinventing Walmart,” Fortune,June 4, 2015, http://fortune.com/2015/06/04/walmartceo-doug-mcmillon/.
Questions
- What key factors do you think prompted Walmart to change? Do they exemplify the change pressures discussed in this class? Why or why not?
- What effects from Walmart’s changes do you predict? How do you believe they and other companies will be challenged to keep changing based on current and future trends?
- Describe how McMillon acted as a change agent in this situation.
- How do you recommend Walmart approach the next major change initiative it undertakes?
