Walmart To Refocus, Reinvent
By Hannah Ash, contributing writer
Amid Declining Sales, Walmart Must Aggressively Take On E-Commerce, Smaller Stores
As Walmart continues to see lackluster sales reports, recent strategic moves by the world’s leading retailer could reveal it isn’t surprised and doesn’t just attribute low sales to the weather. As the store continues to expand into smaller format stores, this push could reflect a recognition that the days of the big-box store, in their current form, are over. Earnings reports continue to fall short for the retail giant, and blaming poor showings on poor weather isn’t cutting it for many financial analysts. The big box department store rose to popularity as a way to save shoppers time and money. Instead of going from shoe shop to dress shop to furniture outlet, stores like Walmart made it possible for customers to get virtually all of their needs met under one roof. With the Internet and the rise of e-commerce, today’s customers can now get all of their needs met from the comfort of home, online.
Why would customers choose to walk through an entire store to find one thing when they can simply type their desired purchase into a search box and move on? It’s a question many retailers and customers today are asking. With Walmart suffering from sluggish in-store sales for Q1, new data shows that e commerce picked up where the leading retailer left off and showed an 18 percent increase in online sales from the previous year’s Q1. With customers now able to obtain so many goods, both large and small, through e-commerce, it makes sense that leading retailer Walmart would be scaling down it’s supercenter development and focusing on ecommerce and smaller stores.
Recently, data came out that Walmart’s focus on online channels are paying off; the world’s leading retailer recently outpaced Amazon in terms of online growth. In pace with Walmart’s strategy to capture online sales, the retailer has also responded to a new trend its noticed of buyers going to stores for smaller, more frequent trips. In opening smaller format stores, such as Walmart Express and Neighborhood Markets, the retailer is making big moves toward capturing lost sales, both online and off. With shoppers buying so many items online, they will want to buy the few things they don’t purchase online (milk, butter, soda, etc) in the most convenient format possible. As the retailer announced it will be doubling its efforts to expand into smaller formats, Credit Suisse analyst Michael Exstein advised the retailer to acquire Family Dollar as a way to quickly saturate a market. Whether or not sales will continue to grow or decline in future earnings calls remains to be seen, however, it is clear that reinventing sales channels to best meet customer demand is crucial for Walmart and retail in general.