For a long time, omni-channel retail thinking seemed to focus overwhelmingly on ‘becoming Amazon’, but today there’s a realisation that offline real estate has an important role to play and, with suitable investment, can offer a positive competitive differentiator against the online pureplays.
So it was with some amusement that I received the news that Walmart is dropping the stores. Or rather, it’s dropping the stores part of its legal name, Wal-Mart Stores and shifting to Walmart Inc. Or rather, again, it’s shifting back to Wal-Mart Inc which was its original title anyway when the firm was incorporated in 1969, having opened its first store - simply called Walmart - in 1962.
In a blog, Doug McMillon, Walmart President and CEO, argues that it’s a bit of corporate housekeeping that’s tidying some brand issues up:
Most of us, and I’d guess all our customers, refer to our company as Walmart and still will. Changing our corporate name from Wal-Mart Stores, Inc., to Walmart Inc. is just a symbol of how customers are shopping us today and how they’ll increasingly shop us in the future. Whether it’s in our stores, on our sites, with our apps, by using their voice or whatever comes next, there is just one Walmart as far as our customers are concerned. When they shop with us, they expect it to be an easy and seamless experience.
The retailer has made no secret of its determination to grow its online presence, both organically and through acquisitions, most notably that of jet.com. That push has seen online sales more than double year-on-year in the last reported quarters. McMillon affirms the commitment to this strategic direction, adding that it’s consistent with the philosophy of company founder Sam Walton:
Sam Walton said, ‘To succeed in this world, you have to change all the time’. He wouldn’t have known that customers in the future would shop on their smart phones or with their voices, but he did know that retail would continue to change. He taught us that, and that for a company to succeed, it has to be agile and innovative.
Hence the focus on building out online capabilities. But to put that in context, digital sales are estimated to account for no more than 5% of total revenues ar present.
It’s the offline business that’s still the cash cow. Walmart has north of 11,600 physical stores and one of the most frequently-made boasts by management is that 90% of Americans live within ten miles of a store. That locality aspect is a primary driver for a push towards increased levels of order online and pick up in store business.
For the Holidays season, Walmart’s taking that further, increasing the number of items that are available for collection on a Pick-up Today basis. According to the firm, 84% of their customers still haven’t finished their festive shopping and there’s always a big rush in the last two weeks before Christmas.
Steve Bratspies, Chief Merchandising Officer of Walmart US, pitches this as an opportunity that the firm is ideally placed to exploit:
We know the vast majority of our customers are still shopping and there is no more important time to deliver on our promise than the final days before Christmas.
In another move to tap into the ‘late shopper’ market, the retailer will also be adding unloaded gift cards to some of its orders placed online. Shoppers can add funds to the cards at a later date if they realize they’ve forgotten to buy Auntie Mame and Uncle Billy-Bob a present.
It’s a welcome relief from a personal point of view that McMillon has decided to tidy up the Walmart naming conventions. Every time I write about the firm, I’m torn between Walmart and Wal-Mart. Aside from that, the reach for a brand recognition of ‘One Walmart’ is an encouraging development. I’ve said it before, but Walmart’s network of stores is its biggest asset, even if massive acquisitions like the jet.com deal have captured the mainstream headlines.