What does it take to change the face of retail. To become Fortune 1 and sustain the position for six straight years, 14 in total. What does it take to become Walmart.
Well, many things. But if the foundation is laid by someone as rock-solid as Mr Sam Walton himself, is it any wonder, that the company has become, what it is today. Charismatic leadership coupled with a deliberate, lucid business strategy made him reach the pinnacle of retail success.
In the early days, the one strategy that hugely worked in Walmart’s favour, was profit sharing with associates. In today’s age of company stocks and the other vast variety of employee benefits, this may sound commonplace. But in the 1960’s, this was quite an innovative idea. Getting managers to invest in the company and letting them share profits, was a sure bet to keep them motivated about their jobs. Each store was run like an independent entity where the manager had almost complete authority over how he chose to run his store. Vast autonomy, minimal micromanagement, own skin in the game, all led to more and more managers reporting impressive sales and profit numbers year after year.
Another factor that greatly helped the retail giant was humanizing the brand, the textbook definition of good marketing! In sync with the company’s strategy to locate the stores in small towns, Sam couldn’t be clearer that his company was for the regular, middle-class woman. His job was to make her life easier. Then, everything, from the choice of inventory to the ‘Every Day Low Price’ scheme seemed an attempt in the same direction. To help her run the house. Going to Walmart became a whole experience for the average American. And a joyous one at that.
And the customer was the king. End of story. Walmart, till date, is unmatched in its service to the customer. If you found a better price at another store or online, they would match it. If you came back with an item you no longer wanted, they would quickly take it back. There is a whole wall of returned items in the Walmart museum in Bentonville. The thermometer “didn’t tell the right time”, the fishing pole “didn’t catch fish”, and the thermos (that was made before Walmart even existed) apparently “broke”. Such endearing stories. Who wouldn’t want to shop from them.
But what really set this company apart from its peers, wasn’t a clever marketing style or just eye-catchy price slashings. It was pure, impeccable logistics. Just incredibly meticulous supply chain strategies.
Walmart owns most of its store properties, from small express ones to big supercentres. There is a Walmart owned distribution centre within a day’s drive from every store. And the fleet of big burly delivery trucks? All Walmart property! This is where the heart of the business lies, if you ask me. They own the entire supply chain. No dependency on third party carriers, no hassle from distributors, no lease renewal hiccups. Isn’t this the ultimate retail dream.
Walmart’s core strengths lie in their brick and mortar business. But I wish they had jumped on the digital wagon much sooner. Why did they let Amazon grow until they could no longer handle it. While acquiring Jet.coms and Flipkarts of the world are all welcome moves, one wonders why the company failed to see the massive e-comm wave and take out its surfing board sooner.
In any case, I will always be a proud (ex-) employee of the company and shall hope for its continual relentless growth in the future.