This article looks at the business ventures of super brand Walmart and its attempts over the recent years to combat a change in consumer buying habits. The article summarizes some of the challenges that Walmart has faced and the bad name they get for employee relations. In 2009 the brand got a new CEO with a plate full of problems to sift through. First, the brand over-estimated their growth potential on international soil. They opened 14M square feet, compared to a planned 22-23M square feet over the past year. International markets did not receive these superstores with open arms. Internationally, consumers tend more towards smaller convince stores, close to home. Secondly, Walmart has been adjusting to a new superstore competitor, Amazon. With no bricks-and-mortar store front, some might say Amazon has a disadvantage, but that has not prevent to be the case. Consumer's shopping habits tend more towards online purchases, both domestically and internationally. Amazon sets themselves apart by offering Prime membership to customers, which offers free shipping on prime items. Amazon has noted a shift in shopping trends from electronics and speciality purchases, to everyday goods such as diapers and detergent, making it a large competitor to Walmart.
So, what will Walmart do? They have looked at plans to make stores smaller to fit better into towns, and close-by shopping habits, as well as acting as their own middle man. What I mean by this is that consumers can go online to Walmart.com and select all the items they need, pay online, and go to a store for pick-up. The only problem that arrises is Walmart's supply chain that took them years to develop and implement. Walmart has low prices because of how they distribute the products, with tight delivery schedules and packaging regulations for distributors.
While this idea is a valid attempt to combat online competition, it is going to be hard to implement. I believe that Walmart needs to take a critical look at how they run their business and make changes from the bottom up. While they should attempt the online order fulfillment in stores, they should not bank on this as their saving grace. I know many people who would be more inclined to spend suggested retail at a store where the employees are respected and valued, rather than three cents less than suggested retail at a store that limits employee mobility.
5 comments:
Regarding international market, I also don't see that Walmart's culture will fit in. As I see in Europe and Asia, people prefer to go to farmer market, where everything is cheap and fresh, and convenient and the large scale distribution channel of Walmart may not be able to deliver that freshness.
I would prefer Amazon over Walmart any day. Walmart's labor practices are wrong. They pay people as little as possible to make billions each year. While Amazon may not be great to it's employees, there is much less in the news about amazons practices.
I agree with Duong that Walmart would not fit in many international markets. Big box stores are part of American Culture, they would not work in many places. I would much rather purchase produce from a farmers market than Walmart.
I've read and heard about Walmart's labor practices but as a consumer it is very hard to not shop at Walmart because it is so much cheaper. I think lowering wages for employees is party of their strategy to reduce the cost, but if wages are ridiculously low, sure it is wrong labor practice.
I agree that Walmart will not fit in the international markets. It is not part of most cultures to go a huge store like Walmart. Whether purchasing food or other products, people in other countries would rather buy from smaller, local stores. Walmart also tends to be located outside of the city and it takes awhile to travel there. It is more convenient for them to go to the smaller stores and markets than to travel to Walmart.
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