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Walmart Tweaks Strategy with new Hybrid Stores

According to a recent MediaPost article, Walmart U.S. CEO Bill Simon recently described their new hybrid stores as “the digital thinking of physical retail.” The goal being to provide customers with the best of both worlds, the extensive inventory offered through e-commerce and the convenience and accessibility of a brick-and-mortar store.

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From the article:

It’s not that Walmart Supercenters are going away. “We expect the supercenter to remain vital. It’s a powerful beast. And they perform really well on the weekly stock-up occasion, and we have the ability to flex prototypes.” Those stock-up trips, which account for about 60% of U.S. grocery spending, are a $585 billion market, where Walmart has about 25% market share.

But the problem is that Walmart has fallen behind on fill-in shopping trips, as many smaller competitors, including dollar, drug and convenience stores, have proliferated. “Our growth has been interrupted by the rapid growth in these smaller stores.” Walmart has a roughly 10% share of that $415 billion market.

With the expansion of Neighborhood Markets, first launched in 1999, and the newer Walmart Express, “we now have an opportunity to really make an impact in this area.”

These stores are hybrids, he says, “designed to not only compete in grocery but also across a much broader space, including fresh foods, fuel and pharmacy.” Nor do they seem to cannibalize sales from larger Walmarts. “Data shows we are capturing new sales, new dollars and new trips when we put these stores in.”

But what makes the concept powerful, he says, is combining the smaller stores with the power of its e-commerce capabilities.

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Target and Walmart testing smaller urban stores

Target and Walmart see expansion through smaller stores, at least in urban areas. According to Pacific Business News, Walmart’s “Neighborhood Market” and Target’s “City Target” both seek to bring the experience of their brands to areas within cities they have not traditionally ventured.

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From the article:

According to the CoStar Group, Wal-Mart President and CEO Bill Simons said the Bentonville, Ark.-based retailer plans to open more than 200 Neighborhood Market stores in the United States over the next 18 months, which would boost the total number to more than 500.

In Hawaii, Wal-Mart (NYSE: WMT) recently bought the former Macy’s building in Downtown Honolulu for $25.9 million and is currently renovating the 80,000-square-foot space for a new store.

CoStar Group reports Target (NYSE: TGT) is testing its City Target format with seven stores ranging from 80,000 to 100,000-square-feet in Los Angeles, Chicago, Seattle and Portland. Target has four stores in Hawaii that average about 150,000-square-feet each.

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According to Walmart, App Users Spend 40% More

It turns out that Walmart shoppers who use their custom mobile app spend upwards of 40% more than shoppers who do not. What’s more, according to Mobile Commerce Daily, they also shop in their brick-and-mortar stores twice as much as regular shoppers do too.

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From the article:

The executive’s fireside chat during the “Push Your Creative Limits: Mobile Invites and Involves Consumers to Live in the Story” session gave attendees a look at how mobile plays a role in Walmart’s multichannel strategy. In particular, the session highlighted Walmart’s app as critical in the company’s initiatives going forward.

“We found, most importantly, those who have our app are making twice as many trips to Walmart, and their spend is 40 percent more,” said Wanda Young, vice president of media and digital marketing at Walmart, Bentonville, AR.

“It’s a great customer win because we’re giving them the tools that they’re asking for, but we’re helping them and allowing them to save time and money,” she said.

Walmart’s strategy is all about getting the right product to the right consumer at the right time.

Ms. Young also pointed out that multicultural consumers over-index on gaming and social media, which gives the company a big opportunity with mobile marketing.

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World’s Biggest E-Commerce Battle Could Boil Down To Vegetables

A former online bookseller and one of the largest brick-and-mortar chains will soon battle it out for e-commerce supremacy. Amazon and Walmart are about to go toe-to-toe to see who reigns supreme. According to an article on Forbes, Walmart clearly dominates in the retail arena, but pales in comparison to Amazon when it comes to the web. Does that give Amazon an advantage when it comes to e-commerce? It might not at the moment, but it could soon.

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From the article:

According to Nielsen, e-commerce will gain more ground than any other segment of the retail industry by 2017, with a compound annual growth rate of 11% each year. Supercenters of the kind pioneered by Wal-Mart come in second, with their growth rate projected at only about half that of web shopping.

Wal-Mart is doing all it can to catch up with Amazon online, copycatting some of the Seattle retailer’s most successful tactics.

They’re trying out lockers, one of Amazon’s hallmarks, allowing shoppers to order items online and pick them up in stores — crucial for the Wal-Mart demographic, a quarter of whom reportedly do not use debit or credit cards or even have a bank account.

They’re dabbling in same-day delivery and even going a step further than Amazon by attempting to crowdsource package drop-off among customers. They’re investing in web technology to improve both their site’s appearance and ease of navigation.

What else can Wal-Mart possibly do to win the web? Nielsen’s Todd Hale has one answer. “E-commerce is growing at 11% a year, but sales for consumer packaged goods online — food, groceries, everyday items — are more like high double digits, almost 20%,” said Hale, SVP of consumer and shopping insights. “This is the space Wal-Mart has to go after: perishable items. That’s where they need the infrastructure.”

Walmart mobile app, retail localization

Walmart’s New App Shows Real-Time Inventory Updates

Starting this summer, Walmart employees will be able to see real-time updates of inventory levels on their store shelves with the help of a new mobile app. According to RIS News, the tablet-enabled app allows employees to do everything from ensuring displays are set up correctly to printing missing labels.

Walmart mobile app, retail localization

From the article:

The Supplier Portal Allowing Retail Coverage (SPARC) app, developed by Walmart digital partner Rockfish, was piloted in 28 stores in four markets over the last several months with major suppliers including L’Oreal, Procter & Gamble, General Mills, Kellogg’s, Unilever and ConAgra, according to published reports. It was introduced at a Walmart supplier conference last month.

Vendors and third-party merchandisers who receive appropriate training on the app will no longer need to get assistance from Walmart store associates armed with Telxon tracking devices to perform basic in-store functions.

“Suppliers often visit our stores to check on their products,” Walmart spokesperson Ashley Hardie told Arkansas’ The City Wire. “Allowing them access to on-the-spot information through the app on their smartphone increases efficiency and allows for real-time decisions – and in retail, speed is important.”

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Walmart’s Commitment to Sustainability

From their Global Sustainability Milestone Meeting on Monday, Walmart reinforced their commitment to creating more sustainable stores and infrastructures. According to Chain Store Age, Walmart has their eyes set on being 100% energy independent.

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From the article:

Walmart’s six-fold increase in renewable energy projects is expected to be equal to eliminating the need for roughly two U.S. fossil fuel power plants. Based on external estimates of projected energy costs and other factors, the two new commitments are anticipated to generate more than $1 billion annually in energy savings once fully implemented.

The company said it will also avoid 9 million metric tons of greenhouse gas (GHG) emissions, the equivalent of taking 1.5 million cars off the road, in effect halting the growth of GHG emissions from the company’s largest GHG source – energy used to power buildings – by 2020.

For the first time, the company is projecting this GHG decrease even with significant anticipated growth in stores and sales.

“When I look at the future, energy costs may grow as much as twice as fast as our anticipated store and club growth,” Duke said. “Finding cleaner and more affordable energy is important to our every day low cost business model and that makes it important to our customers’ pocketbooks. Our leadership in this area is something our customers can feel good about because the result is a cleaner environment. And savings we can pass on to them.”

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Retail’s new industrial revolution

Walmart will install 10,000 self-checkout lanes in its stores this year. The reason? Every second lost at the register costs the company tens of millions of dollars, a hole in the dam they are hoping to plug. According to Retail Customer Experience, while technology is not going to replace all jobs, the truth of the matter is that it eventually will completely replace some.

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From the article:

But there’s a bright side.

It’s that for the first time in about 40 years, there’s also a reviving market in retail for truly talented, creative and remarkable people. People whose work adds significant texture, vibrancy and human connection to the retail experience. People who are believers in the brand values, super-users of their products and co-creators who love to help their customers imagine and personalize solutions. True brand ambassadors.

Some retailers already seem to understand this. REI, The Container Store, Sephora, Bloomingdales and a handful of others seem to get it. They realize that their people aren’t just a cost item on the P&L but rather the spiritual glue that can make their brands truly sticky and loved. They understand that in a world of commodities, human emotional connection is the intangible value that can and must differentiate them.

But spinning yarns about cashiers taking the corner office isn’t going to get us anywhere. This is no longer a debate about the opportunities that do or don’t exist for hard working, underpaid retail workers. Let’s call it what it really is. It’s the end of the era in which retail workers are paid to punch buttons, enter numbers and count widgets — and no amount of nostalgia will reverse that.

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Walmart brings iPhone Checkout to 200 Stores total

What originally began in 70 stores will now be expanded to a total of 200 in the near future. According to an article on RIS News, shoppers scan items on their iPhone as they are shopping, seeing a tally of their total purchase, and are able to bypass the checkout line when they are through shopping.

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From the article:

The pilot began near its home office in Bentonville, Arkansas in late 2012, then expanded to Atlanta, and recently rolled out to 40 stores in the Denver area. While the program is tripling in size, for now it will only be in a fraction of Walmart’s more than 4,000 U.S. stores. “Scan & Go” will be expanded to the following territories:

· Denver, CO
· Phoenix, AZ
· Omaha, NE
· Dallas and Austin, TX
· Oklahoma City and Tulsa, OK
· Wyoming
· Bozeman, MT
· Seattle, WA
· San Jose, CA
· Portland, OR

“We want our customer feedback to dictate the experience,” said Gibu Thomas, senior vice president of mobile and digital at Walmart Global eCommerce this week. “You’ll see this roll out to more markets.”

Currently, the “Scan & Go” app only works on Apple devices, but according to the retailer an Android version will be released soon. With more than half of its shoppers using smartphones, Walmart is trying to make shopping more convenient for shoppers embracing mobile technology. According to Thomas, more than half of the customers that have the “Scan & Go” feature have used it more than once.

Walmart, E-Commerce, Fulfillment centers, retail localization

Walmart creating a next-gen network of stores as fulfillment centers

E-commerce, utilizing emerging ahead-of-curve technology, and creating a world-class fulfillment network, are two of Walmart’s biggest focuses at the moment. According to an article on RIS News, the mega-retailer is working on ways to improve the customer experience on both a macro and micro level. From the in-store experience to managing global supply chains, they are rethinking the entire process.

Walmart, E-Commerce, Fulfillment centers, retail localization

From the article:

Work on the fulfillment network will begin in the U.S. “We are still in pilot phases of our same day delivery for Walmart U.S. but we know we have a very important advantage in our brand and promise,” explained Walmart CFO Charles Holley in a presentation at the Bank of America Merrill Lynch Consumer & Retail Conference last week. “Along with the 4,000 stores that are within a very short distance of a large part of the population, we are also going to be using dedicated fulfillment centers.

The retailer is supporting its digital commerce efforts with technology investments, including improvements to its Polaris search engine and the development of its Pangaea global e-commerce platform. “We want to have a common global platform that can flex to the market,” explained Holley. “Right now we have different technology we’re using in some of these markets so we need one common platform and we think that will take us a long way. Mobile technology is another small part of investment but important I think.”

Walmart is also making efforts to rein in expenses and run its stores more efficiently. At its Sam’s Club stores, the retailer is piloting self-checkout POS registers. “That’s made us much more efficient and much more productive in the Club, our membership scores also have gone up in those clubs along with associate scores,” Holley reported.

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Wal-Mart issues ‘zero tolerance’ policy for global suppliers

Wal-Mart Stores is tightening the reins on its global suppliers. Effective March 1, the retailer is implementing a “zero tolerance” policy for any supplier who subcontracts work to factories without the company’s knowledge, the Associated Press reported. Previously, Wal-Mart gave suppliers three chances to correct mistakes.

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As part of the new rules, Wal-Mart will require all factories in Bangladesh to undergo an electrical and building safety assessment from an independent agency.

“While an overall global approach is necessary, there is a need for heightened attention to the risks specifically related to building structure in Bangladesh,” Wal-Mart said in a 10-page letter to suppliers Tuesday.

In addition, beginning June 1, suppliers must have an employee stationed in countries where they subcontract to ensure compliance. In the past, suppliers relied on third-party agents to monitor activity.

[via Chain Store Age]