2011 Issue 9

Bob Connolly retired from Walmart in 2006 where he most recently served as Executive Vice-President for both Merchandising and Marketing.

In 2000 Bob was named the first Chairman of the Center for Retailing Excellence at the University of Arkansas’ Sam M. Walton College for Business.  In 2005, an endowed scholarship in retailing was established in Bob’s name.  Bob co-authored The Big Middle, published in the Journal of Retailing.

Bob now works both privately and in conjunction with the Center for Retailing Excellence, consulting and advising corporations and business groups worldwide on how to take advantage of trends, business analysis from the customer’s point of view, and the miracles and missteps of branding.

Bob has worked with Disney Corp., International Resources, Inc., Spectra, Unilever, Georgia Pacific, Microsoft, Ben & Jerry’s and Massmart.

In addition, Bob serves on the Board of Directors for Husqvarna in Sweden.  He travels extensively, giving him a first-person view of the ever-changing world of the customer.  Bob publishes a newsletter at www.customerbob.com. 

2011 Issue 9

THE DEATH OF WALMART HAS BEEN EXAGGERATED

Certainly some of Walmart recent missteps are concerning if exaggerated.  But lets put Walmart USA in perspective.  Walmart US will do around 265 billion dollars in 2011.  That is about $2000 for every family in the US, $800 for every person in the US.  The latest transaction count I am aware of is that 200 million people purchase at a Walmart each week.  If you wanted to, you could just about only shop Walmart for all of your needs. 

They continue to groom high capacity talent particularly in the International Division and at the same time hire outstanding leaders (Bill Simon fits this) who bring fresh thinking and new approaches.  Their ability to execute the business disciplines in supply chain, people management, systems and expense control is envied by almost all other businesses.  But they do have some issues.  It is not now important how they came about or even what they are but simply to go back for the most part to the formula that brought them to a 435 billion dollar company. 

1.      Every day low price (EDLP).  Simply put no sales, no loyalty card rebates, just day in and day out low prices.

2.      Opening price points (OPP).  Yes it means just that, each category will have an opening price point.  However it also means that you will have a opening price point on the products that are on the left side (still growing) of the demand curve.

3.      Seasonal aggressiveness.  This is their fashion, whether it is Christmas or Halloween or back to school.  Often high margin and high risk, Walmart has allowed competitors to take a lot of these sales.

4.      New Items.  This makes them contemporary and timely.  Whether it is the Ipad or a drug going from RX to over the counter, they should be leaders.

5.      IN STOCK, IN STOCK, IN STOCK ON BASICS, IN STOCK ON THE PRODUCTS THAT MAKE THE CUSTOMERS TRIP SAFE.  It is often not easy to shop at a Walmart as compared to Walgreens or Kroger.  The customer needs s to feel safe and secure that she will not be disappointed.   There are too many stores with too many out of stocks on the products that the customer says are important.  This is not a matter of too little inventory, but more of discipline and execution. 

Nothing-new here, mostly about execution.  Most likely this is the agenda, however it is not understood throughout the organization or if it is, it is not being embraced.