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Not being from the US, I had my very first trip to Walmart just 2 months ago – and what an experience that was. I was impressed at how massive the place was, it literally had everything under one roof and the customer service was certainly eye opening. I couldn’t believe they actually paid someone to stand at the door all day and greet customers as they came in and out, and the conversation I had with the checkout lady about the bees nest she found in her garden was enlightening to say the least! I know more about the nature of bees now than I ever learned from the discovery channel.
However the store has been losing a lot of customers over the past few year to retail giants such as Amazon, and Walmart has been trying all kinds of campaigns to get people back in the door. None of which have had much impact it seems, as they struggle to prevent the closing of a number of outlets and the sad consequence of vast redundancies through the US. Just last month, the chain revised its annual sales growth forecast from 3-5% to a conservative 2-3% which is a massive slump in revenue compared to previous years. The good news however, is that executives are taking notice and making changes with much more of an ecommerce focus predicted for 2015, when there will also be a move towards smaller stores which will better suit today’s busy shopper. Walmart also will cut its capital spending next year to around $11.6 billion, which is down as much as $1.4 billion from an earlier forecast. The breakneck expansion we’re used to seeing from the corporation just won’t cut it anymore as this model becomes increasingly financially unsustainable, so the move to online and smaller ‘neighbourhood market’ type stores seems to be a great step forward. Up to 200 of these stores are expected to open in the next year as the company continues to adapt to meet customer needs, and ecommerce offerings will also be accelerated with an ecommerce growth of 25% expected during the course of 2015.
If the company had recognized the surge in ecommerce more quickly in recent years, they might not be fighting so hard to get back on top today, but this is something that many businesses are learning at the moment as their customers put down their shopping baskets and pick up a mouse instead.