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Walmart has a great story and very interesting history, but it is also a company with a complicated past and it’s not quite clear what role the future of retail will play in the future.
For some time Walmart has been known as the largest retailer in the world, but that’s not quite true. It isn’t actually the largest in any single country or region; and it’s certainly not the largest for each single product category. The company has grown its business through acquisitions of rival retailers, as well as niche brands.
Walmart is still a massive retailer, operating more than 2,000 stores in North America alone, but it is also an example of how companies have developed over time: from a huge conglomerate to something much more like Amazon (which is both incredibly fast-moving and incredibly diverse).
And Walmart isn’t going away anytime soon. It continues to grow (it looks like it will be taking on more than $1 trillion in annual sales by 2020) and there are new challenges coming up: new technology, new competitors in Asia and Latin America (Walmart also operates alongside another major retailer, Target), and so on. As we look forward to the future of retail with all these changes on the horizon we are likely to see some form of consolidation — what might be called “Walmart 2.0” — continue across all sectors.
This means that Walmart will have to change from being just a giant conglomerate into becoming something much more like Amazon: faster-growing than Amazon but diverse enough to pull off a variety of different products across different categories (Amazon makes electronics; Walmart makes groceries). It will also need to adjust its brand identity so that people know who they are when they shop at Walmart instead of Target or Best Buy; at least right now it doesn’t do so well because most people associate Walmart with consumer electronics instead of household goods (although having said that I think Target could make some improvements here).
In this piece I am trying to think about how this might play out for retailing as a whole because none of these changes would affect every consumer differently; they would just affect certain segments differently. So my approach is to imagine what Walmart would do if it were selling everything from appliances to foodstuffs online using only its own stores or third-party distribution channels. The following chart shows my best guesses about what Walmart could do if Wal-Mart Stores Inc [NYSE:WMT]
3. What is Walmart?
Walmart has become the world’s largest retailer on a real-world basis (they are also the largest online retailers in the world). The retail giant is headquartered in Bentonville, Arkansas, USA. There are two major divisions in Walmart’s business: its traditional retail operations, which focus on physical stores, and its online business, which is active in e-commerce (and second only to Amazon). Walmart’s total revenue for 2016 was $482 billion with gross profit of $132 billion and net profit of $67 billion.
Walmart’s online operations are not yet profitable and they have been struggling to gain market share from Amazon. In recent years it has moved away from traditional brick-and-mortar stores and more towards what it refers to as “on-demand” services (such as pickup at a nearby Walmart store or delivery by Uber or Lyft).
Walmart has also moved into new markets such as China (where it is not a state owned company) and India. By 2018 US eCommerce sales were expected to be $1 trillion.
4. Walmart’s History
The name Walmart probably sounds familiar – it’s the world’s biggest retailer and a major player in the retail sector. And yet, its history is completely different from most other retailer brands. It was born as a small family-owned store in 1935, which grew into an enterprise that now owns over 6,000 stores in 46 countries around the world. What makes this brand unique is that it was founded by a group of philanthropists with no formal marketing background or training. But what they didn’t know at the time was that they were setting out to create a company that would be better than all the others. They were trying to build something new and different, and they are still doing it today.
The Walton family started their business as a humble grocery store called Sam’s Club on October 3rd, 1982 in Florida – which meant they had to start from scratch! The company started out with only 16 employees, making them feel like a true startup team despite their size. The original idea was simple but ambitious: sell groceries door-to-door using trucks (the founders wanted every customer to be able to shop at Walmart).
The first shipment of groceries went into operation in just 13 weeks thanks to excellent logistics and customer service skills honed by Sam’s early employees who knew exactly how customers liked their food and how much time they spent shopping for groceries. Being small only made sense if the company could deliver on its promises of quality service (in other words, if customers bought from Walmart because of quality rather than price).
It took 3 years for Sam’s Club to reach profitability – but once it did, there was no turning back: within 3 years every location had doubled sales and within 7 years it had become so dominant that it became Wal-Mart Stores Inc., one of America’s largest companies; today it has more than 1 million locations worldwide!
5. Walmart in the Community
In a recent post I summarized the problems that exist in our work at Walmart, and I laid out my vision for how we would go about addressing them. Here’s a more detailed discussion of what we’re doing, why it matters and how to get started.
You might want to consider sharing this post with your friends in case they want to make their own adjustments. It’s a good primer on the basics: what products are worth your time, what kind of marketing you should do, and how you can use that to make money. And if you’re curious about more, I am happy to be able to answer any questions about any aspect of marketing.
You can contact me via email at [email protected]