Walmart Store Closings: Are They Too Big To Innovate?
Walmart was known as the business that moved in, and shut down entire towns of livelihood when I was younger. Today, they have created a culture where Americans Know they can trust the prices, and life's needs can pretty much be met in one store... or can they?
If you consider that Walmart's big innovation was that they were a one-stop shop where you could get everything you needed. They then branched out with the Supercenter model which undercut the competition everywhere it went, and pushed the other guys out of the game. We watched Albertson's fail as Neighborhood Markets moved in, and prices kept the competition at bay.
Today in a world where groceries bring people in to shop, an entire health culture has grown up on the internet with healthy whole eating super-sites shunning Walmart for being a GMO Supercenter. You walk down the aisles, and nothing is edible if you are of this mindset, and Mainstream America is moving that direction through social media education and communication.
Will they innovate in this arena like some of their healthier competitors such as Whole Foods and Sprouts?
They've done a great job with construction innovations as in this solar powered store:
Walmart squeezes manufacturers for every penny to cut costs. I know one product that marketed to the giant. Walmart made an offer on his product that cost $89 to make: To pay $3 profit for every unit sold, but he had to maintain warranty. Instead, he left Walmart in the rear view mirror, and continued on to sell his product for $199.00, and sizeable profits. So Walmart lost a good product for it's shelves, and much of the public missed a great idea for their cars. They squeeze businesses so hard they must manufacture in China to be considered for a real offer. They have become a crackerbox of Chinese wares, and the grocery aisles are filled with pesticide laden foods: so fear the healthy minded majority. Add to that the fact that most Supercenters are unable to handle the traffic at their registers, and the public has become hungry for alternative higher service solutions, or near-to-farm healthy choices.
Competitors in the grocery field like Aldi have continued to be a faster cheaper shopping experience, and have also invited more nutritious non-gmo, antibiotic free, grass fed solutions to their shelves, while the price conscious, time conscious, health conscious shoppers are happier and better served with much of their selection. Walmart's phone app supposedly shops for the cheapest competitor sale prices, and refunds the difference. Aldi carries it's own brands, so Walmart chooses by proxy not to compete on price with them, making the app feel like a little white lie.
So the question remains, will Walmart Change with the tides, and continue to innovate? Or have they grown too profit-centered to innovate to the continuous changing cravings of it's ravenous public, and the competitive businesses that are filling the gaps around the edges? The decay in share values last year is the writing on the wall. The shutting down of older store models might just be a necessary transition, but will they take it far enough to keep their edge? Are they listening to their customers?
I was there when Albertson's quit listening to their customers, and the complaints about pricing increases filled my ears while they focused in on the profits. Shortly after, they failed. A few streamlining decisions could be the difference between the most loved and most hated business of all time. They have a chance to save Sam Waltons legacy and make him proud. Can they continue to serve the public the way he would have wanted? Let us watch and see.
~by David Webster