Leaked Walmart memo reveals competitive threats
vox.com
vox.com
The business could easily have gone the way of Sears.
Target’s pickup operation is superior in every dimension. They made the decision to put it front and center, and their employees seem happier. It takes <3 minutes to have a Target person drop stuff in your car, Walmart requires scheduling and is usually late.
The other issue they have is that their logistical operation is best in class for retail, but not so good for shipping.
I've hit their website from Google looking for an item, and the lead time to ship is 2+ weeks and it's highlighted that it's sourced from a partner.
Putting aside the obvious - it's just a worse deal. For most items, they're competing with 1-2 days, a product page packed with verified reviews to help decision making, a company with top notch customer support/return policies and the price is usually the same or cheaper, there's other issues at play too.
It's subtle psychological cues. First, the way they highlight that it's from their partner almost makes it seem like they're doing dropshipping, they don't actually know if it's in stock and I can order and they will put a hold on my credit card. Maybe I'll get it in 2 weeks. Maybe a month. Maybe the order will eventually be cancelled or I will go through a nightmare dealing with their support or having to do a chargeback.
I'm not going through all of that stuff in my head, it's just my mind in the background doing pattern matching with other bad experiences I've had shopping online.
I understand it takes time and truckloads of money to get something even close to what Amazon has, but it also requires good leadership at the executive level.
The one area that Walmart could absolutely crush Amazon in would be picking up your order online, same day. Walmart should be able to leverage all their experience with brick and mortar to do this.
Instead, they're flagging behind Target. Their solution is pretty middle of the road, all the big retailers have something similar.
Amazon bought Whole Foods, so they have a footprint, just like Walmart has an online store. Based on how these companies have executed which do you think happens first? Amazon nails in person pickup or Walmart nails online shopping.
Amazon has nailed free shipping with prime. In person pickup costs money in time, fuel, available vehicle. Feels like checkmate in 2021 but this may change
I bought rope there (in a physical store) a few months ago, for tying down furniture in a truck. Got home, cut the rope, it was a foam core with braiding around it to make it seem like true rope.
This applies to their food items as well, by the way.
Not everywhere. I didn't renew my prime subscription a few years ago, because they rarely met their delivery times and I was starting to get broken, counterfeit, and obviously returned/resold items.
* It’s cheaper for Walmart as it can ride on the back of an existing trunk from a logistics perspective.
* Dependent on how confident you are on stock, Walmart could offer “instant” click and collect on any range in stock in store. This does depend on inventory policies and is more complicated than it initially seems though.
* It gets someone in your store which has an umbrella effect as they are likely to purchase something else.
Most are benefits for Walmart, but the lower delivery cost can be passed on to customers and instant pickup is great for customers when it happens. Furthermore, click and collect is great for people in flats or where leaving a parcel isn’t practical.
I do not see deals anymore. Sure they like to bundle (especially in threes), but the product is usually the stuff that isn't selling elsewhere, and the price isn't much if the consumer divides by 3.
I used to buy there all the time because of the no question asked return policy. That has changed. They question a lot more than electronics returns too.
Oh yea, most high end watches you see in the case are Grey Market bought, and have no manufacturer's warranty.
What's keeping Costco happy is the membership fees. That is pure profit.
Biggest reason I don't go grocery shopping at Walmart. Doing a full cart through a tiny self-checkout area is a PITA.
French ones still run in criminal mode.
Safeway has managed to piss off every singe one of their employees.
My local Safeway couldn't find help for years.
Since the epidemic, that is changing. They are hiring people who don't care much about conditions, or pay, and I know I'm suspose to say that's great.
Those people will get tired of being treated terribly in the future though.
I bet Safeway is lobbying the state right now to allow booze sales through self-checkout. The only people I see in line waiting five deep is liquor sales.
Plus with contactless payment my shopping is an essentially frictionless walk through the store building.
If you want good customer service go somewhere they dont cut corners on staffing while paying the heroes that have to do 3 people’s jobs minimum wage.
Then take that gaggle to the back in a meeting room so that it's not visible to the customers.
>If you want good customer service go somewhere they dont cut corners
Where does this exist? I'm free this weekend. I'll see about taking a visit to this magical fairy land you speak. /s Seriously though, what public facing retail store doesn't cut corners on staffing or any other aspect? I need to expand my list of stores not on the "disgusted with" list
In my experience, it's rarely as low as 3 minutes. It's often quicker for me to go in and get in line at the customer service.
Is any company in retail any different? Except for the "hire anyone", most people would probably say that describes Amazon.
Huh sounds a bit like another company I happen to know
In a way, it reminds me of "MSFT is Dead" stuff from circa 2008. Google had taken email by storm, was moving on office and seemed to be making web into their own OS. Windows Vista & IE sucked. Google just seemed so much nimbler. Apple had risen from the dead, and was reinventing consumer electronics. MSFT was looking decrepit, the next IBM.
MSFT never panicked. Software was a great business to be in, and the pressure was never financial. Meanwhile, they maintained their own ways and their own cultural advantages, long term perseverance, reverse compatibility, etc.
They didn't win every race. Google won mobile OS, the "browser war. MSFT's attempts at a search business didn't succeed. They did win enough though, plenty. Google was better at web based software earlier, but MSFT held on to Office/Productivity. Office 365 wasn't as slick as early, but it was/is the product businesses will pay for. Most notably, they beat Google on cloud. Cloud was in Google's wheelhouse, and emphatically not in MSFT's. They started late. Google's "paradigm" mentality was great for the early part of the game. Getting where we are today though, that required carrying old paradigms into the new world. It required lots of mess, details, requirements that don't really make sense... That is MSFT's wheelhouse. Meeting companies where they are. Its a foreign concept to Google.
Today, Google is the one that seems weaker. They're plenty rich, and plenty capable technologically. They aren't very good at building businesses though. It's still all about adwords.
MSFT could have gone the way of IBM.
Office 365 just destroys Google Docs, everything MSFT offer just integrated well, is priced well.
Chrome OS + Android + Docs could have been the productivity Windows PC killer if they'd executed it with vision.
Executing well on a new paradigm for a 30 year old suite, maintaining compatibility, etc. These are really hard, and MSFT's speciality. Office became office originally for maintaining meticulous compatibility with its predecessor, Lotus.
It's incredibly tedious, frustrating work. Takes a ton of perseverance. Google docs came out of the gate to oohs and ahs. It was slick. Cool, innovative features like real-time collaboration worked well. MSFT's start was much clunkier, and expectations were already high. It took years before it wasn't an embarrassment. Even then, office 365 was never cool, not even now.
These two companies are at opposite ends of the spectrum. Google likes paradigms, impressive launches. Then, they expect that the paradigm, being better, will just win. Everyone will adapt to their new way. They don't have the belly for years of kludgy, schleppy work while everyone makes fun of them.
Google cloud was a great example of this. It was early. It solved the problems that needed solving, in theory... especially the sexy ones. Everyone just needed to abandon everything they had been doing and come over to the New Way.
This is the exact opposite mentality to the one that maintains badly thought out feature of excel from 1996, itself design to clumsily support Lotus notes features from 1985. A million boring details, technical debt and nothing sexy. Where there's muck there's brass.
I disagree. Office licensing and the whole Microsoft account managament is so incredibly annoying to the point where I prefer the google suite simply because it works. Office recently left me stranded with an outdated license and no way to enable it because the ones in charge were not in office that day, so I went with google, and I'm sticking to it now even though there would be the option to enable to license. I don't want to go through the same hoops and hurdles every 6 months again.
Yes that’s better than bankruptcy but Walmart is a far cry from a successful old incumbent being able to address new upstarts.
Also what makes you say Walmart Labs has great tech and hires top software talent?
A quick look on Glassdoor shows the salary is quite low (esp. as it’s based in San Bruno). I know plenty of new grads that are earning much more, even at non-FANG company. I imagine like most incumbents, Walmart underinvests in tech because they see it as a cost center.
The typical Walmart Labs Software Engineer salary is $116,635. Software Engineer salaries at Walmart Labs can range from $66,567 - $184,513.
https://www.glassdoor.com/Salary/Walmart-Labs-Software-Engin...
To be fair, they’ve been paying ~ 2% dividend yield that whole time. Still, if your comp is mostly in stock, those dividend payments hurt versus something like a buyback.
If you check the total return price, they're actually doing better than the s&p 500.
total return for walmart: 223% (https://ycharts.com/companies/WMT/total_return_price)
total return for S&P 500: 221% (https://ycharts.com/companies/SPY/total_return_price)
the administration and process involved in setting dividends isn't very trivial either
and too often maintenance of dividend payments are placebos for lackadaisical areas of more important management responsibility
and it's too common for factions in the boardroom to be trying to serve and attract entirely different types of investors who would be better served with tracking stocks or demergers and so on
for some people any dividend unsupported by a very clear rationale is a red light but of course if you are doing in depth company analysis you may have all of this covered in your models and settlement and actions systems.
Something tells me only people who feel insecure about their pay report it to Glassdoor...
Point being, Glassdoor data is so incomplete that I don’t think you can meaningfully compare even two companies on it. Especially if they have different comp structures.
Stick with levels.fyi
https://www.levels.fyi/company/Walmart-Labs/salaries/Softwar...
While their RSUs are not at a FAANG level, the base + bonus are more than in line with top paying companies in CA.
Amazon stopped innovating as a store 5-10 years ago. Nothing has meaningfully changed for the better and things have gotten worse on the front of fake reviews and counterfeit products.
Amazon spent its innovation on AWS, which is not even the same industry Walmart is operating in.
It should have gone the way of sears. Its an abusive business that is bad for everyone.
It was not felt they could yet compete with more well-funded better-established chains. Most stores more closely resembled today's Dollar General than a big box There were not yet "superstores", and most people in big cities had never heard of them.
With IBM PC's not yet having a significant impact on business, and almost nobody doing any data networking compared to today, Wal-Mart already had a fully computerized POS/inventory/logistics-management system in every store, integrated into their headquarters in small-town Arkansas in almost real-time, with data-mining informing the financial decision making.
No one else had anything close, not Sears, Target, or Kmart, who were obviously going to end up having difficulty when Sam thought the time was right for Wal-Mart to come to the big cities.
Even though all these retailers had the same computer hardware in their respective headquarters, IBM's good old "impersonal" mainframes which only big companies could afford.
Walton would bus all his managers to Bentonville for a pow-wow every year, scheduled to start at 8 all week.
If you got there precisely at 8, you had already missed the most important half-hour with Sam, he would start at 0730.
Drove an old pickup truck too, so he could save money.
I would say the only thing that makes them competitive is their price.
That's the entire story of Walmart. Pretty much the only person that smiles is the greeter, and they aren't always very friendly.
I was amazed last year to find Argos, a traditional bricks and mortar catalogue based outlet here in the UK, now offer a good website and next day delivery to most of the mainland, and at competitive prices.
By doing what, clearing out the rest of the local competition?
They can’t just replicate Amazon they have to be better than Amazon.
I wouldn’t say they’re replicating Amazon, they’re a brick and mortar chain with thousands of locations. That’s definitely a potential edge over Amazon.
Amazon just has a superior webpage and shopping experience than all the other major players.
If it’s a big ticket item I might get it from a retail store. But with the recent kohls Amazon return policy I’m slowly changing that behavior as well.
Last I checked, Amazon had removed that option as of maybe a decade ago, and they commingle inventory so they do not assure me of any supply chain integrity.
And they are more expensive for any dense, heavy, especially liquid products.
I never went to Walmart for better quality. Heck that’s why I personally use target more now. Slightly higher price and slightly better quality.
I’ve gone into their stores. Their stock assortment isn’t bad compared to the competition. In fact, aside from Whole Foods on the organic/bio side of things, they measure up very well and better compared to their competition. They are more of a hypermart where you can do one stop shopping ala Carrefour.
The issues I see are: very drab color palette. Working class shoppers. Sure, it’s elitist, but people like shopping alongside people in their own stratum.
They could likely address this by having a second more upscale brand.
1) All the employees look sad, all he time.
2) They've obviously carefully tuned their check out staffing so that the lines are always long. This is such a constant that it has to be intentional, and they're doing a good job of it.
3) Sometimes they attempt to check receipts at exit. I don't get that at any other non-membership store.
4) All the shoppers look sad.
5) It's the only place I know where I am 100% guaranteed to smell both strong cigarette odor and way too-strong perfume application multiple times per visit.
6) The shoppers are uniquely talentless when it comes to existing in space without being in others' way. I don't see this anywhere else. It always feels 3x as busy as it is both because they cram the aisles full of crap, and because no-one knows how to walk or stand without being in the way. It's bizarre.
7) The most prominently-placed thing on entering the building is a row of gambling machines. I shit you not. They're directly ahead, and you have to veer right to enter the actual shopping area. That definitely sets a tone.
Most of these are true at any other Wal-Mart I visit. I avoid them most of the time, despite their having much lower prices than, say, target. The visits take longer and are miserable. Their weird interior color choices (WTF is up with that dirty-looking orangey-yellow?!) and something they do with the lighting (can't put my finger on it, it's just drab and dingy) make it even worse.
I'm about 90% sure that Wal-Mart didn't used to be this gross and unpleasant.
The Walmart near me isn't like this. Only #2 is true.
Walmart is probably the #1 big box store where I live. Everyone shops there, rich and poor alike. It's clean, the people are fine and the staff are as happy as any other big box store staff. The Walmarts in the adjacent towns are similar. Most Walmarts I've seen are about like this. The tire center will have a Festiva in one bay and a Tesla in the nest
The Walmart near my work is very different. Way more dismal in all the ways you've described. I dunno about the gambling thing, that may vary by state and I've never seen it anywhere. But where I work has enough wealthy people to support other stores so the Walmart clientele is much poorer on average. I've been in probably a dozen Walmarts over the years and it's by far the worst.
It's similar to visiting a small town DMV.
Your description of gambling machines reminds me of my last visit back home in IL, after they legalized gambling. It's very jarring to walk past locals glued to video slot machines at 9AM in a gas station. It's depressing as hell, I'm sure the walmarts have cashed in on the action too but I didn't visit one while there.
They've installed these gates at the walmart nearest to me that essentially force you to walk through a checkout line even if you don't end up buying anything. Most necessities are locked in cases and I always struggle to find the single employee with the key to any particular case, who then has to follow me to the checkout and have me pay for the item immediately.
The H-E-B two miles down the road is significantly nicer in almost every capacity and only marginally more expensive. The time I save not waiting in checkout lines (I scan everything on my phone at H-E-B then bag it while I shop) and looking for keys quite literally makes up the price difference and then some.
I've lived in five different states and been to Walmarts and flipped cars and the variance is EXACTLY like variance in DMVs in both QoS, clientele/employee demographics.
Another interesting window in this vein is the local courthouse. The smaller towns don't separate out traffic violations from everything else, it's all on display handled in one room. You can get a sense of what's going on and the type of people in a given small town rather quickly this way.
When there's just one grocer serving a given area, it's effectively the same situation. But when competition eventually arrives, I think they tend to quickly divide along class boundaries.
Around here there's only one grocery store in my local town, and as a result it's actually pretty decent. The exact same chain has a very similar store in a significantly larger town ~25 miles away, where there's a competing upper-class grocer in the adjacent lot. The effect is devastating on the mediocre chain. Customers are treated poorly, the place is a filthy mess, cashiers aren't even trusted enough to manually enter prices when a barcode won't scan. The contrast is shocking, just next door in the higher end grocer none of these problems are experienced, but the prices are slightly higher.
If Walmart started treating their staff like Costco we’d see a lot happier staff, and pay less taxes on entitlements.
If Walmart paid their staff like Costco their prices would be high like Costco’s and there would be little reason for them to exist anymore.
For people on a budget, Costco’s prices are terrible on many basic items. The “bulk prices” in many categories (e.g. dairy) are at best the same price per unit as Walmart with the huge purchase requirement.
Costco is for middle to upper middle class incomes and Walmart is for middle to lower class incomes. If you don’t recognize the price difference between the stores, you are privileged enough to be in the former category.
I would believe that if the Waltons weren’t one of (the?) richest families in the world. They can afford to pay more but don’t as the US taxpayer is making up the difference in welfare.
Privatize the profit, socialize the cost.
I got that at Safeway on Market/Church in SF. But in other places I've seen Walmart and other stores' staff have been much happier and nicer. Even though these chains try to have consistent experiences across locations, there is a pretty large variability from city to city.
There’s still the whole, all very poor people shop there dynamic that isn’t going away unless someone can undercut Walmart significantly.
I almost never find an old employee at Costco, while at Walmart most of them are old or middle aged.
If I'm at a Whole Foods, the sensitivity is way at the other extreme of politeness. I wonder if anyone's ever went deep on an analysis of this sort of phenomenon.
Macy's has a similarly annoying policy. They deliberately keeping their cash registers unmanned, which they apparently tell their employees is to "avoid intimidating customers" so you have to stand around waiting or seek out an employee manually. I thought my local Macy's was simply understaffed, but since learning they do it on purpose I've decided never to go there again.
Tangentially related. In college or football team would go to old country buffet. Which has a microphone in the wall to order more from the kitchen for the staff. One of our smart ass players went up and said "we need more fried chicken". The manager caught him and scolded him. Then looked at the buffet and said "make that two orders of fried chicken" in the mic.
The store is just like a Vegas casino, every last thing has been thought out and everything is A/B tested down to a regional and sometimes city basis.
If all of their changes are focused on near-term bottom line, is it really surprising if that comes at the expense of customer/employee satisfaction and brand reputation?
Fixed income customers see things like an ultra clean speed and efficient store as 1) intimidating and 2) overhead that makes prices go up and "wastes" their money.
I can understand e.g. when I buy a TV, but a gallon of milk is ridiculous and profiling.
Any employee that stops you might be guilty of kidnapping.
https://www.lawyers.com/legal-info/consumer-protection/prote...
I would much rather stop for 30 seconds than be banned from my local grocery store.
Worst case is they call the local PD who are having a bad day and want to point a gun at a black man
#7 is a separate issue though. That is a predatory practice and I'm glad I live in a state where it isn't allowed.
They're also the only store I know of that shuts down their checkouts at closing time; if you were already in line, too bad, they'll check you out tomorrow. (Of course, a lot of their stores are 24x7)
I'm still debating the merits of growing up on a Rez versus how I see my fellow humans.
Only time I see that much concentrated sadness in a store, that consistently, is when I find myself in a dying-rural-town grocery store that looks like it time-travelled from 1990. I don't remember whether those were sad places when I was growing up, mostly in those same sorts of dying rural towns. Wal-Mart wasn't, and their store function, service, cleanliness, and design all improved constantly through about '05, then abruptly reversed course and haven't stopped going downhill. Dunno what happened. Maybe Amazon happened, though that doesn't explain some of their oddly ill-looking paint color choices from the last couple re-designs.
I’ve noticed this at Walmart. However, I’ve noticed it’s worse at Target, (an arguably higher end store) where I’ve observed the queue reaching from one end of the store to the next. Interestingly, I’ve also noticed this effect on grocery chains in my area. Fry’s (Kroger) seems to have many queues open, which go quickly, whereas the higher end Safeway will have 1-2 queues open and zero open after hours.
All stores are bad with lines, until you get to really high end (like Whole Foods or Natural Grocers), but Paradoxically the more expensive stores (mid range, like Target and Safeway) are the worst offenders out of everyone. I don’t know why this is. Maybe they don’t have enough customers and not enough profit to justify more staff, or maybe they found that if the lines are long, customers will make another trip around the store and buy more stuff.
That said, it used to be, before the self-checkout area. And, when traveling, I end up popping in to Walmarts in various parts of the country now and then, and the checkout times are always a gamble.
re: #6 - I wonder if it has something to do with the aisles being there more for the convenience of the packers and movement of goods in the store, vs the convenience of shoppers. I understand your point, and do notice it sometimes, and have tried to compare it to other shops. However, in the last few years, I found myself going to shops less and less overall, so it's harder for me to remember and compare against competitors fairly.
Nothing about your list describes Walmarts in the Dallas-Fort Worth Metroplex, except perhaps the poorest parts of Dallas, which I have not personally visited.
Grapevine, Flower Mound, Roanoke, Rome, Keller, Preston Hollow Walmarts are all immaculately maintained and clean.
I'm currently working on robotics deployment for several new Amazon warehouses and I hate having to visit the already operating ones - everyone looks like they would jump out of the window like the people at Foxconn, except they don't because they know the fall wouldn't kill them.
Amazon is truly staffed with geniuses at the upper echelons... keep the peasants who make the whole operation work away from the customers, that way the customers can always feel good about buying from Amazon. Walmart doesn't have that luxury, what with it's enormous physical presence and all.
"Wow, [mid-tier jeans brand] is only $16/pair at Wal-Mart, and they're $40 when you find them on sale on [jeans brand]'s web site. What a bargain!"
... but then it turns out they're not the same thing, even if they're made to look very much like they are even down to the labelling, and in fact the manufacturer produces a separate low-end- and outlet-stores version that's much worse than their standard product.
---
This is actually an anti-pattern in their org;
They have FAILED to properly train to and address this problem, thus it persists.
Its not intentional - it is through lack of taking a focus on this aspect of their business, or looking at it - and determining they prefer/dont mind it...
Brilliant turn of phrase!
Sorry you have to mix with the “rabble”!
People want to shop with others of similar taste/preferences. They presently cater to the one of the lowest common denominators (Dollar stores could be lower, I guess), so how could they appeal to other shoppers?
That’s the crux of the question. The current stores appeal to one audience but not another.
Whole Foods has the same problem, except from the other direction. Working class folks will sneer at Whole Foods. It’s not their bag. Amazon would have to open something that caters to price conscious shoppers if they wanted to expand groceries to working class shoppers...
Furthermore, I'm wondering what shitholes these people live in or near where they actually experience this sort of thing.
The Walmarts around Keller, Texas are nothing like what's being described here... although granted, this is an upper middle class area of Texas, and unlike California, we don't allow people to steal shit out of our pharmacies with impunity, nor do we allow people to shit on our streets.
If you know their history then you understand how they got where they are.
Walmart grew in the 80s and 90s by planting itself just outside the city limits of small towns across America. They attracted the towns people with low prices and jobs. Their presence eventually shutdown every competing small business in those towns and the former purveyors of those businesses often wound up working at Walmart. Businesses that didn't directly compete often setup shop inside the Walmart leasing space from them. That is until Walmart started partnering up with larger chains and pushing those small businesses out.
At the same time Walmart was strangling small businesses in small town America, they were also putting the squeeze on suppliers. They were demanding custom products at lower prices from companies who were forced to outsource to other countries in order to meet Walmart's demands. Well known American brands like Huffy went from being proudly made in America to just being stickers slapped on products coming off the boat from China.
If you drove across the US in the 90s you'd run through empty ghost towns and as soon as you'd hit the "Now leaving..." sign for the town there'd be a Walmart Supercenter with a parking lot full of vehicles. Walmart destroyed small town America by draining towns of tax revenues and running small businesses under.
Through all of this Walmart proudly displayed Made in the USA or some other patriotic bullshit on the outside of their stores.
Yeah Walmart has an image problem, and there isn't anything they can do about it in my opinion.
Also note - Amazon is doing the exact same thing to any remaining small retailers, squeezing suppliers like crazy and intensifying the brands selling exclusively from overseas (also destroying brand reputations as fakes are absolutely rife).
Also doesn't help that the middle class has dwindled and anyone caught below the "capital gains" economic apartheid line doesn't have money anymore so even if they wanted to buy local they couldn't.
That's where Amazon hits, once a customer knows what to buy they can find it on Amazon.
Short of some breakup, or government intervention, what can be done? The system is designed to reward those who find the best market fit. The problem is, there's no brake pedal on their growth. They can absorb entire industries.
The government has an obligation to ensure negative economic costs are paid by the producers and consumers of goods and services.
An example of this would be Walmart for years relying almost exclusively on Medicaid benefits for their employees healthcare. Walmart is hardly the worst company in terms of passing economic costs on to others or future generations. But, the point is, that unless the government forces a company to pay the true costs of doing business it's always going to result in market distortions.
It's a design flaw of capitalism, which is actually easy to correct within an equitable political system. However, this is much more rare than it ought be.
Not going to comment on the ethics/politics of it, but if people like shopping alongside people in their own stratum, then they have to accept that they have to pay a premium for it (i.e. shop at Whole Foods). You can't really say "I want to shop at the discount store but I also want only other wealthy people to be there".
If you accept that premise, then perhaps Walmart doesn't have an image problem, it's simply the fact that it's the cheapest place to shop in the neighborhood, so lower income folks will more likely shop there.
Only half tongue in cheek, and completely agreeing with you.
If your wealth is such that food cost is a fairly negligible part of your expenses, USUALLY the Walmart will be further away located on less expensive real estate, roaming around the Walmart supercenter can literally take more time (both of these points are, to be fair eliminated by curbside pickup/delivery), the variety might be good but it's of foods that might not necessarily be worth the cost savings, the meat & produce might be alright but it's rarely going to be exceptional. It's not that any cook worth their salt can't go to Walmart and cook some fantastic food, it's that the real fancy store can be the path of least resistance.
I patronize both stores, tending to make runs to Walmart type stores for mostly non-perishables sold at superior prices. Honestly I feel more uncomfortable among wealthy patrons can poor ones. I can feel a miasma of snootiness around me in an upscale enough shop.
For people beyond a certain income level, a few dollars in savings aren't as attractive as shopping in a place where people seem to be more "happy". Many of these stores also tend to have an attached gourmet cafe where you can grab a "healthy" bite post/pre shopping. The whole foods in Downtown Austin even has yoga classes (an other fitness activities) on its terrace.
I agree that Walmart can be extremely unpleasant compared to a regular grocery store for many reasons.
However, I’ve found Whole Foods staff to be extremely unwelcoming unless you seem like you fit in regardless of how much money you make.
Can definitely recommend wegmans for a more upscale shopping experience (Eg fancy cheeses, meats, selection of fish) without any of that “too cool for school” factor if you’re not in an “in” group.
Edit: Trader Joe’s is also pretty cool but it reminds me a bit of Aldi.
Well, not originally, but they’re owned by Aldi Nord for a while now.
People at Wal-mart have a bad day all the time. It's about the customer service. I have less anxiety knowing that if I do run into problems in the store, the staff would be more approachable.
> what class you are and should have shown more reverence
I didn't read the original comment this way. It sounds like you are projecting a bit
I shop at the wally all the time, and I am just calling an elitist a spade free of any strawman you want to pile on.
You're probably white and haven't experienced casual racism that exists at Wal-mart and less worldly venues
> dog whistle
> calling an elitist a spade free of any strawman you want to pile on.
Is it an elitist dog whistle when less affluent people also avoid Wal-mart on the sentiment that it's not actually a better value proposition such that customer service is a differentiating factor ? There is extreme poverty where people have to squeeze every penny out of their expenses even if it means trading their time for those pennies, but I'd hardly call a family in the middle ( below the middle class ) vying for Costco or a Target as having elitist preferences.
You're the one who sounds like an elitist white knight suggesting less affluent people have zero options and necessarily have to shop at Wal-mart. For example, Dollar Stores have great service, not actually cheaper, but is perceived as a cost saving to less affluent people.
I love you. Fight the hate!
Almost everyone in America is "working class". America no longer has a leisure class to speak of, if we ever had one. Looking at the most recent data - I forget where I saw it - but the wealthiest Americans also put in the most hours at work.
I know a lot of people have brainwashed themselves into thinking they're something they're not, but they're all wrong. If you have to go to work in the morning to maintain your lifestyle, even if you "work" for yourself, you're just a working class stiff like everyone else, you can just afford bigger shit.
If you can decide to just stop what you're doing and go attain spiritual enlightenment for the next 18 months, and literally nothing about your life, your children's lives, your grandchildren's lives, and your great-grandchildren's lives will change - you're not working class.
> Sure, it’s elitist, but people like shopping alongside people in their own stratum.
That doesn't make someone elitist, it just makes them an asshole.
It is a polite rephrasing of the now antiquated phrase: “lower class”.
In fact, the “working class” aren’t necessarily even employed.
For instance, hanging from the ceiling smack-dab in the middle of some aisles are little TVs showing you that they're recording you. And when you walk down the aisle, the little TV senses you and lights up (it's remarkably bright) so that you _have_ to notice it.
And nine times out of ten I get hassled by the LPOs on my way out—demanding to see my receipt like they're busting some sort of birthday card stealing ring.
I do get that shoplifting is a big problem for them. The (small, middle-class) city I grew up in always has a cop in the parking lot of the local Walmart because so many people steal things. In high school, kids would grab booze or energy drinks and pass it through the bars in the garden section to their friends. Or just shove it in their backpack and run. And most of the "Do you recognize this shoplifter?" posts on FB or wherever by the local PD are from the Walmart.
But I can't help but think that they're driving away the type of people they _want_ to shop there. I'll gladly drive farther and pay more to shop in a pleasant environment.
That is just the store you went to. The company crunches tons of data before they decide on store placement, and grouping like-shoppers by socioeconomic status is absolutely a goal. My hometown for example - one side of town has a Walmart that is very run down and exactly as you describe, while on the other side of town the Walmart looks like an upscale Target on the inside and an REI on the outside.
They tried the "upscale" brand online with Jet.com and it was an absolute failure. Amazon owns almost all of the non-price-first shoppers and Marc Lore doesn't know how to run a business without oversight.
The shuttering happened because the website was racking up seven-figure monthly Azure bills and bringing in five-figure revenue. Marc just couldn't figure out how to drive traffic without all his domains he sold to Amazon (soap.com, diapers.com, etc).
When I was very young, I liked talking to my dad about possible business ideas and how to make millions of dollars so I could buy a castle for our family to live in when I grew up (yeah, yeah, I was a kid). One evening, after proposing yet another crazy idea (I can't for the life of me remember what it was), my dad sat me down and asked me which kind of customer I thought Walmart would prefer to have: 1 customer that spends $100 or 100 customers that spend $1. I naively answered "The $100 customer, because it's a guaranteed higher amount!" He corrected me, saying that they'd prefer 100x $1 customers for two reasons: 1) there will always be a market for them and 2) it's less detrimental to lose a customer when each one pays $1 than it is to lose your only customer.
I don't think attracting the average Joe instead of the elitist is a bug, it's a feature.
The thing about America is that you honestly cannot tell the social status of a person based on appearance alone. The middle class is large and we value frugality and humility.
I think of this as a collective tendency: rich or poor, when you go to Wal-Mart you just wear whatever you're wearing.
I don't know if you have ever heard of Chris Arnade but he is an ex Wall Streeter who wrote about the "McDonald's Test," which probably lines up with Wal-Mart too.
"Eventually I came up with what I call the McDonald’s test. The broad thesis of my book is that our society sorts people into what I call the front row and the back row – the privileged class to which I used to belong, who are financially secure and live in safe neighborhoods with good schools and public services – and everybody else. The test is to ask a person: how do you view McDonald’s? In my experience, the answer usually reveals whether someone belongs to the front or back row."
https://www.plough.com/en/topics/justice/social-justice/econ...
You walk in through a one-way turnstile, they have a permanent police presence, clear loss prevention people randomly throughout the store, and someone doing loss prevention just after check out.
I'm sure other stores in our area have loss prevention, but they hide it much better. WalMart is the only store where I feel like I'm being scrutinized for wanting to buy the products they sell.
That doesn't bother me. I'm not so elitist that I need to always be with people who are me same class as me.
What's more important is that the people catering to me make a living wage. Or, to put it differently, are comfortable with what they are paid without relying on government assistance?
The only kind of stores that I avoid because of the customers are liquor stores where half the drivers in the parking lot are drunk.
Walmart jobs in my fairly HCOL area still start at $12 an hour.
Where I live (a decent sized metro), their stock collection beats all other retail stores in the area. They'll often have SKUs for products I can't find anywhere else. As an example, I have a spray carpet cleaner from what is likely the best selling brand in the country. When it runs out, I want to get a solution refill, not buy a whole new spray. Walmart is the only general purpose store in the city that carries it. All other stores carry just the spray version, which costs about double. Target used to be my go-to place for this kind of stuff, but even they've stopped carrying it.
Their fresh produce sucks, but for everything else, they often have good selection and quality. And with good prices. A few other examples:
- OTC Medicine/supplements: If you're trying to get one of the well known "alternative" brands (e.g. vegetarian tablets), their prices are much cheaper - perhaps half of that in any other local store.
- Perfumes: It's the same perfume as you'd get at Macy's, Nordstrom, etc, but usually at 20-50% off their prices. Reason? They source these perfumes from the Asian market. Perfume manufacturers cannot sell in Asia at the prices they charge in the US, so they sell it cheaper there (again, from all my research, it's the same perfume - not a lower quality one). So Walmart simply "imports" them back in from Asia.
I rarely shop at Wal-mart. It's not near me, and I go there only when I simply can't find what I need at another local store. It certainly has its down sides and legitimate criticisms, but I've begun to appreciate the positives to it.
Based on what the article says from the memo, a lot if their issues stem from changing shopping behaviors and a desire for more convenience-- such as curbside pickup-- that Walmart has had difficulty scaling up fast enough to meet demand.
This is more subjective, but in every country I go to, I visit a "cheap supermarket chain store" and look at the people working there. Do they look happy? Do they look healthy? Do they look tired? Switzerland was amazing on that front.
That's kinda what Sam's Club is, though Sam's is competing against Costco
Sam Walton is the originator of both Sam's Club and Wal(ton)mart.
Sam's competes more with stores like BJ's and Brandsmart than Costco, which is really in a league of its own.
It's no wonder that people who can afford to shop elsewhere do.
Elitist or not, wouldn't this advice simply move them from one stratum to another?
Best Buy is the most confusing of these as the receipt checker is stationed about 3 feet from the last register by the door watching you get rung up and pay.
Eh, I think the problem isn't even "lower class" it's "I don't want to shop at a store with a meth lab"[1]
How does walmart begin to fix problems like that? IDK. Even Kmart back in the day didn't have that sort of image problem. Heck, other brands like Kroger or albertsons/safeway don't have that problem. It's a pretty unique problem to the walmart brand.
Oddly enough, Asda (walmart's UK brand name) doesn't have the same image problem. It really is a problem unique to the US walmart brand.
[1] https://slate.com/news-and-politics/2015/03/meth-labs-in-wal...
In other countries their micromanagement made them fail. Like in Germany, where it's the place where it crashed and burned the worse.
The whole business of sending people to do shopping in retail stores seems a temporary business until the grocery industry gets fulfillment figured out. It's like a throwback to the early days of Internet commerce, when the web site didn't talk to the inventory system, so many orders could not be fulfilled properly.
Because making shoppers wander the aisles leads them to buy more things than they intended to. There's a reason best-selling items are always placed at eye level.
And the dairy or automotive sections are nowhere near the entrance. They want you to impulse buy some cookies or a $5 DVD on your way to get milk or an oil change.
For example you might see a novel ingredient in the ethnic food section of the app, go look up a recipe that includes it, add all the rest of the ingredients all without putting on pants.
Less foot traffic, less money.
They ended up just raising prices on all products purchased through Shipt (instacart) or through curbside. Most people don’t notice that a pack of batteries is 5.49 in store versus 5.99 in the app.
Some big ticket items, like Xboxes or other digital items, where customers generally know the price, were not increased. But in general it worked out well and became profitable.
Instacart collapses brand identities as consumers don’t care where the food comes from. This is very top of mind of whatever reason for retail/grocery execs.
Only very recently did Walmart even attempt to bring up wages, and it's not because they felt some accountability for decimating small towns and family owned businesses, but because they were becoming a dinosaur and suddenly had to compete for workers who would rather work someplace that paid more, even if only marginally and exploited them a little less brazenly.
> Minimum wage
> Costco: $16
> Walmart: $11
>
> Average pay
> Costco: $24
> Walmart: $15
>
> Employees on food stamps (subsidized by you)
> Costco: Virtually none
> Walmart: More than any other company
>
> Founder net worth
> Costco: not a billionaire
> Walmart: $220+ billion; up $30 billion in the pandemic
>
> Both companies have similar business models and charge the same low prices. One decided to treat its employees like humans and forgo enormous profits, and the other one took the opposite track.
>
> Business is about choices.
Either way, Costco’s customers are richer, and they have a different business model. They are objectively a good employer, but a lot of that has to do with their customer not being extremely price sensitive and being able to afford to buy large quantities, which also results in less loss due to theft.
You can find the richer parts of any town by searching for Costco.
As for founder net worth, it’s not very meaningful if a founder owns it or others own it in 401k. Divide the Walmart founder net worth by employees and it still would not give them a meaningful improvement in wages for long. They’re simply a low margin business selling to customers who cannot afford to spend extra.
Online retail, much like offline retail, is about physical infrastructure. You still need warehouses with all the product, you still need fulfilment, all online changes is the balance of those factors. The core assets don't change.
I can see how they are losing on branding but losing to Instacart tells you that management lost touch with customers and sat on their laurels.
That being said, I have no doubt that they will vanquish Instacart. And they will likely pressure aspects of Amazon's business too. It isn't actually possible to compete with WMT because they such a dense network already (outside the US, AMZN is going to struggle even more, they weren't aggressive enough in building fulfilment centres and they tried to build fewer, larger centres, Amazon will begin exiting some of these markets in the next five years and sell out to local operators with exiting fulfilment networks, an alternative would be they cede control over fulfilment to local operators and just operate the front-end website...either way, their position outside the US is likely unsustainable).
Which is why it is so weird when offline entities adding online lose out over and over to online only. They already have most of the infrastructure and their infrastructure is being paid for by two separate revenue streams (existing in store customers and new online customers). It just shows how often and how prevalent it is for these companies to rest on their laurels and siphon off every available penny of revenue for shareholder and executive profit, rather actually investing real time, effort, and talent into the online space. Which is why online companies can start from such a disadvantaged position and still surpass.
One of many problems was that most people never actually came back to get the book when it arrived, and salespeople either didn't mention or actively discouraged buying on the web site, so the sale was lost completely. On the other side, their online wasn't integrated into their brick & mortar locations until way too late to claw back from Amazon. I'm not sure when they finally added the ability to see if a local store had a copy of the book you wanted, but it took too long because of the internal competition, and you still pretty much needed to call the store and make sure they had a copy because you could easily waste a trip if the inventory wasn't up to date or no one could find the book.
Doing a bad job of adding online to their business ended up making the entire experience worse.
Many retail chains seem to have done the same thing in the early days if trying to have an online presence. Heck, you still can't reserve or pre-buy a game at a physical using their web site, which says it's in stock. And you'll often still waste a trip if you trust the website and don't call ahead.
Sadly, this is very common in retail, and one of the things that is destroying brick-and-mortar.
My wife works in this space and tells me that a lot of retailers, from department stores to fancy boutiques, do this.
The worst part is that since the online store is generally located in the warehouse, it gets first dibs on stock, while the stores have to do without. Some of the retail stores she works with will lose out on $20k/day because they can't get stock, but online always has it. The managers are training the customers to check online first, cannibalizing their own employees and stores. Then they send the daily reports to the stores with notes like, "I see that online did 44% better than your store in your zone today." Well, no shit. Online has stock and the boutiques don't.
Sometimes the boutiques do a little fighting back, and sort of "pool" their stock. Meaning that if a store doesn't have something a customer wants, the employees of that store will call another store they reciprocate with and try to have the item shipped to the customer from that store for free. The just-above-minimum-wage shopgirl ends up eating the shipping just so she can make her unrealistic sales goal and stay employed for another month.
I am in the UK. Many of their locations are adjacent to motorways, they literally have a warehouse in the store, and all they need to add is a fulfilment network (which, btw, they already have just not large enough to meet demand). Admittedly, the stuff they carry is pretty heavy/expensive...but they are 99% of the way there.
Instead, you go on their website, a lot of the stuff on there doesn't work properly, and delivery times are a month plus. It is deliberate.
Wayfair is dropshipping stuff from China, and managing to compete with them...how? It makes no sense. Ikea have a position that no competitor could actually replicate without losing billions of pounds, and they are getting beaten by a company which doesn't manufacture goods, owns one or two warehouses, and doesn't fulfil orders...how? Literally, Wayfair just have a bunch of websites (now consolidated) with good SEO...and Ikea are just handing them market share.
And yes, "executive profit" is the key point. Executive comp is set by comp committees who have no clue, and benchmark off whatever they the company is already doing/last year's numbers. Why do execs care if the company blows up in five years through malinvestment? They will have cashed out their options by then and will be lighting their cigars with fifty pound notes. Imo, executive comp structure is 95% to do with why this has happened (in my experience, exec comp in physical retail is structured very poorly across the board, it incentivizes poor ROIC growth).
The point about exec comp is what I have seen at other publicly-listed physical retailers (i.e. dead format, competitors eating their lunch but they keep opening stores because the comp committee wants EPS growth).
Nothing else really matters to me regarding Walmart. There's no subscription service that would get me to shop at Walmart more than I do today (which is zero). There's no competitor that could decline in such a way that I would shop at Walmart. I know many in my social circles feel the same way.
I bought a Keurig that broke on the 3rd day and they wouldn’t take it back because I bought the extra warranty they sell on them.
Warranty company wouldn’t do anything because it was within the store refund timeframe.
I’ve not had that problem with Amazon.
They wouldn't take something back within the return period because you bought an extra warranty? What am I missing here? How did they justify it?
The store manager eventually told me they would not accept the return on anything that had the extended warranty which is conveniently right on the receipt.
So this is the second time trying to return it when I wait to get a manager so I went to my car and called the warranty place again (Asserion) and got an agent on the line. Told the agent I called the day before, followed the advice to come back and get a manager and it didn’t work and she agreed to stay on the line while I walked back in the store to get the manager again.
She was awesome and a total boss. I put her on speaker, told the employee at the returns desk she’d speak to me and the manager and we waited five more minutes on him.
When he came back again I told the manager I had the warranty company on the phone refusing to service the contract and she rattled off all the info he needed to hear and what Asserions policies were and that he needed to do the manufacturer return on his side. 10/10 great experience with her.
Then he said go get one off the shelf and take the swap.
It's sad because Walmart Labs has been one of the few groups from a big company putting money behind Clojure/script, which I would like to see succeed.
Do you have more information?
Basically, Walmart is responsible for so much of some products’ sales, they dictate the price to the manufacturer. Manufacturers respond by producing special versions of products to meet their price demands.
Product quality is sort of a hobby/passion for me. Most popular brands these days prioritize price wayyy over quality. Even without Walmart, finding well-made products is difficult, inside a Walmart, I don’t even bother looking anymore.
I am very fortunate that I have the opportunity and means to vote this way with my wallet; many people don't.
Look how well the stock is doing and has done over the past 4 or so years. to say they they are facing challenges or are struggling is overly-dramatic.
Online shopping will never replace Walmart completely. Rather both will grow together.They both serve a role. A lot of ppl do not want to use amazon or don't have good internet access or cannot receive mail easily.
Walmart’s problem is with urban and close urban centers. Their image in these areas is in the dumpster. I don’t know how they can improve it either. The one thing that could help is to throw their color palette out and pick a vibrant one. Their stores look really dull.
https://www.vox.com/recode/21448460/walmart-tiktok-amazon-de...
They were very eager to beat Amazon on bringing the QVC style online video commerce that’s super popular in China to the U.S., but I haven’t seen much about it since. I guess like convincing teens to buy clothing that their favorite influencer was wearing from Walmart.com was too tall an order.
1. They always have boxes of un-stocked products stacked in the aisles, making it hard to navigate my shopping cart through the store.
2. Their food selection isn’t as good as other local retailers.
3. The Walmart near me locks the door near the handicap parking after 10:00 pm, even though they are open all night. I’ve been forced on multiple occasions to walk all the way to the other end of the store to get out and then walk all the way back to my car again, which is painful for me and why I have a handicap tag in the first place.
Two of those issues seem fairly easy to fix, yet they never do.
In my experience, Instacart has worked very well: the only issues (2-hour delivery window, tip for delivery) are upfront, but I rarely get messed up / late / bad orders. The website is also great.
The only time I used Walmart, my delivery was rescheduled to the next day, something which never happened with 50+ Instacart deliveries. And the website sucks.
Not trying to be rude but maybe you didn't tip enough? The default tip is 5% but I usually do ~20%.
I don't expect it for a couple days but if it's in the local store they have random people bag and deliver it within hours. Even on a Sunday.
Additionally walmart could do better with fewer more professional employees and with an app that would help shoppers find merchandise in store without needing to ask an employee.
https://help.target.com/help/subcategoryarticle?childcat=Acc...
Consider Walmart’s weaknesses and how other companies address them.
- manually stocked shelves
Consider Costco’s model of placing pallets of product on the floor. Most Walmart’s have the vertical space to go up. Obviously redesigning their store experience is expensive and difficult with a stagnating industry and a lot of staff that don’t like tech or change. But these are not hard problems. For large items like boxes of soda and cereal, this is simple, just add some flimsy cardboard shelves holding the rows together. For beauty products and small items like that keep the system and layout the same to keep things simple, but start working with manufacturers on palletized displays that satisfy their in store image requirements.
- poor buy online pickup at store experience, both online and in store.
Make it easier to shop a particular local Walmart for pickup and only the stock in that store. The same goes for shopping online for shipping and only those products sold by Walmart. Having three different experiences is good for consumers, but make it easier for the customer to specify which one they want.
- the notorious Walmart experience, and the notorious people of Walmart
This is a tough one that I don’t have a good answer for besides look to target and Trader Joe’s for inspiration while hiring sociologists and the advertising company behind fidget spinners.
- online purchase, in store pickup experience
In years past it made sense to force customers to walk through the entire store to do some annoying task. These days? I pay more, sometimes a lot, to not have to enter a store, or speak to underpaid and overworked staff there. Punch some new doors on the side of the the building, put in a few reefer fridges, some more shelves, and have the in house developers crank out a contactless pickup web app. Include
- innovate
For things I buy all the time, I’m not time sensitive. Hook customers on something addictively convenient like weekly grocery delivery of their staples with Walmart’s plus subscription. Stuff like milk, eggs, bread, cheese, deli meat, etc. also, if I know I’m having a big party in two weeks and don’t want to deal with the groceries I’d love a reliable way to 60 fresh avocados, 10 cases of beer, 20 bags of chips, and 30 pounds of meat without going to multiple stores. Right now the only way I can do this is by ringing the manager of the store and placing a special order. It shouldn’t even be that hard to logistically handle the ebbs and flow of demand. Problem is can someone build such a system profitably? If Walmart can’t, I doubt anyone could.
Have you used the Walmart grocery pickup? It is seriously great, with its own app flow both on mobile and browser. They have been rolling this for years, even in rural markets. It is most of what you have described, complete with store redesigns on the side of the building with covered parking for pick up. Maybe it is regional, but is crushing the southeast.
Getting rid of poor people in a Walmart is a crazy statement, that you should probably edit out.
I agree on the easier website experience for Walmart only as vendor for delivery, but they do have a walmart instock section on the website, which allows you to browse up to the minute stocks and order them for pickup or delivery same day or next.
Your party example is exactly what Walmart Grocery Pickup is.
It reminds me of Mcd’s problem. They can’t go upscale because people that will pay for it already like places like Chipotle or Chick fil a more and Mcd’s is so deeply branded as the classic cheap fast food. And their current customer base is heavily weighted at lower income busy people looking for the ubiquity, price, and mentally easy process.
A lot of walmarts now actually have this automated pickup machine [1]. It's honestly kinda cool. The grocery pickup they'll bring out to your car for free too, unfortunately sometimes I've had to wait 10 minutes though, so it's not as breezy as I'd prefer.
A Walmart with things palleted like Costco would be roughly twenty times the size.
It would be amazing but terrifying.
While this is perhaps impractical in the case of WalMart, I think you don't compete with Amazon at what they are best at. You have to change the game.
Reference - Walmart's first Android TVs will be officially released next week - https://techplanet.today/post/walmarts-first-android-tvs-wil...