For more than half a century, Walmart has prided itself on providing value to customers by being a low-price leader. But the consumer mindset is changing. Now “value” also means convenience, ease of finding what you want, and the ability to get exactly what you want when you want it. Nationwide dollar-store chains often have lower prices than Walmart, so that point of competitive advantage is fading. And thanks to Amazon.com and other online retailers, consumers can shop from home whenever they like, compare prices, and know immediately what is available. Contrast this with the experience many Walmart shoppers previously had when they entered a store—low inventory, disorganized aisles, unhelpful staff, and an overall depressing atmosphere. The company’s online presence was about the same. The site was difficult to navigate and attempts to search for products were frustrating at best and more often fruitless. Named Walmart’s CEO in 2014, Doug McMillon set out to change this. “What people think about the company is important,” he noted. And at the moment, people weren’t thinking about value and low prices when they thought about Walmart. McMillon enacted a number of changes. First, since the company had earned a reputation of treating its store employees poorly—low wages, few benefits—while profits were in the billions of dollars, Walmart announced it would increase its minimum wage. Second, the company asked for and paid more attention to employee feedback. Recurring issues included the dress code, store music, and even store temperatures. So clothing rules were relaxed, more variety in music was introduced, and thermostats were adjusted. The company hopes improving employee morale will translate into a better experience for customers, thereby changing some of the negative images. Walmart’s Web presence was another target for big changes. With Amazon as the store’s biggest competitor, McMillon wanted to offer customers more items, pick-up options, and ways to meet their needs and demands—like an online grocery ordering service. This means a new way of thinking about marketing and inventory across the board. McMillon was able to see how consumers have changed not only what they want, but also the way they want it—whether from the hands of happy employees or with the simple click of a button. a) What key factors do you think prompted Walmart to change? Describe how McMillon acted as a change agent in this situation.
For more than half a century, Walmart has prided itself on providing value to customers by being
a low-price leader. But the consumer mindset is changing. Now “value” also means convenience,
ease of finding what you want, and the ability to get exactly what you want when you want it.
Nationwide dollar-store chains often have lower prices than Walmart, so that point of
competitive advantage is fading. And thanks to Amazon.com and other online retailers,
consumers can shop from home whenever they like, compare prices, and know immediately what
is available.
Contrast this with the experience many Walmart shoppers previously had when they entered a
store—low inventory, disorganized aisles, unhelpful staff, and an overall depressing atmosphere.
The company’s online presence was about the same. The site was difficult to navigate and
attempts to search for products were frustrating at best and more often fruitless.
Named Walmart’s CEO in 2014, Doug McMillon set out to change this. “What people think
about the company is important,” he noted. And at the moment, people weren’t thinking about
value and low prices when they thought about Walmart. McMillon enacted a number of changes.
First, since the company had earned a reputation of treating its store employees poorly—low
wages, few benefits—while profits were in the billions of dollars, Walmart announced it would
increase its minimum wage.
Second, the company asked for and paid more attention to employee feedback. Recurring issues
included the dress code, store music, and even store temperatures. So clothing rules were relaxed,
more variety in music was introduced, and thermostats were adjusted. The company hopes
improving employee morale will translate into a better experience for customers, thereby
changing some of the negative images.
Walmart’s Web presence was another target for big changes. With Amazon as the store’s biggest
competitor, McMillon wanted to offer customers more items, pick-up options, and ways to meet
their needs and demands—like an online grocery ordering service. This means a new way of
thinking about marketing and inventory across the board. McMillon was able to see how
consumers have changed not only what they want, but also the way they want it—whether from
the hands of happy employees or with the simple click of a button.
a) What key factors do you think prompted Walmart to change? Describe how McMillon acted
as a change agent in this situation.
b) What effects from Walmart’s changes do you predict?
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