Walmart 101 Day One

Walmart 101

Recently I read about some e-mails that were supposedly leaked that were written by several different Walmart executives about declining sales and their resulting declining profits.

It doesn’t take a Redneck MBA to figure out what their problems are, but let’s examine a few of the problems over the next few days.

Noise

One of the first problems I find when entering a Walmart store is that the ambiance has changed. Today, one goes in and they are bombarded by noise. There is the Walmart Connect Television that greets shoppers as they enter the building and a great deal of other distractions.

As one passes down “Action Alley” they find that every other end cap has a video display advertising, hopefully but not always, what is on that display. When one is walking up the Action Alley for the freezer section, they find they have video end caps on one side of them and video displays over the freezers, too. Add to this the Walmart Radio playing in the background and you can’t even hear yourself think.

When one approaches the checkout section, they have the Walmart Connect television playing and the checkout television network playing and the Walmart radio along with managers’ walkie-talkies and announcements. There is just too much going on. Customers need to think and slowly shop. Who wants to look for that last-minute item they forgot when they already have a headache?

Feel free to let us know what you think Walmart could do to improve sales .

Disclaimer
The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney and/or accountant with any specific questions.
There is no one right answer to any business question that will cover all circumstances. Please Visit McClendon Enterprises

Could Someone Beat Wal-Mart Part 4?

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One of the biggest complaints you hear from Wal-Mart employees is that they are understaffed. They simply do not have enough people to get the job done. In most small towns across America, before Sprawl-Mart came to town, there would be a mom-and-pop hardware store and a mom-and-pop cloth store/craft store. Mom and Pop were experts at their niches. One could go in and visit Mom and Pop and ask questions about anything related to their project. Somewhere in that little hardware store there was a doohickey that would fit the thing-a-ma-jig just right and would make the whole project work. At the cloth/craft shop, Mom could tell you exactly which interfacing to use or how to knit or crochet the item you were trying to complete and could help you fix the boo-boos.

Wal-Mart came in and offered cheap knockoffs of the cloth that mom and pop offered. Wal-Mart only sold the bread and butter items. They did not sell those off-the-wall kinds of things that people sometimes wanted. They only sold the high profit, high turnover items that kept mom and pop in business.

Mom and Pop had to close. They could not afford to stay in business. These were the type of people that gave money to the little league team, the Boy Scouts, Girl Scouts, 4-H, Lion’s, churches, and more. They bought tickets to whatever raffle came along and, yes, even helped with funeral expenses more times than one could imagine.

Today, Wal-Mart makes a big deal about giving $1,000 to one or two charities in the community. Everyone is supposed to say “Hat’s off to Wal-Mart for being so civic-minded. The truth is that giving by local businesses, overall, is way down. There are no more local businesses. Mom and Pop were put out of business.

Not too long ago, my daughter needed a few yards of cloth for a school project. We went to Wal-Mart and waited in the cloth department. No one showed up to cut the cloth. My daughter went to find an employee to get someone to cut the cloth. Ten minutes later, still no one to cut the cloth.

I stopped a department manager who was walking by and asked her to get someone to cut the cloth. She radioed someone who said they would take care of it. Fifteen minutes later still no one to cut the cloth. I have Wal-Mart’s number programmed into my cell phone. Most of my calls to Wal-Mart are placed from inside the Wal-Mart store. The store paged someone to come to fabrics. Finally, thirteen minutes later, a zone manager showed up and she cut the cloth.

While she was cutting the cloth, over ten people lined up to have cloth cut. Imagine what Wal-Mart could do with a crafts department if they had someone who was a crafter in the craft department around the clock. Imagine if they paid her to give classes there in the craft department how much crafting supplies Wal-Mart could sell. But this department is ignored. The selections of cloth and yarn are pathetic. The closest real craft store (Hobby Lobby) is 30 miles away and even they don’t do crafting right.

Over in hardware, if you can’t find it by yourself, you can’t get it. You will not find anyone working in that department. It takes over half an hour to get someone to mix a gallon of paint. Then again, Lowes and Home Depot are no better. You can’t find anyone to wait on you in those stores either.

If a store came along that had adequate, well-trained, staff in each specialty department around the clock, those departments would close any Wal-Mart. 

Disclaimer
The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney and/or accountant with any specific questions.
There is no one right answer to any business question that will cover all circumstances.
Please Visit McClendon Enterprises

Could Someone Beat Wal-Mart (Part 3)?

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You see it at every Wal-Mart. There are two kinds of Wal-Mart employees. There are the typical Wal-Mart employees who do their best to keep from doing any work while on the clock and then there are those who actually do all of the work. You will see employees congregated around different areas of the store. They will be having personal conversations and ignoring customers, fellow employees and pages for assistance. These are the employees who ignore a customer when they ask them a question. Often if a customer approaches this type of employee, the employee will act like they don’t see them and walk away.

Then, there is the other kind of employee. These employees are the “Go to People.” You hear their name on the intercom. They may have a particular area they are assigned to but, because they have paid attention and have some brains, they are called upon to run every aspect of the store. One prime example is “Billy-Bob in Toys” (the name was changed to protect the innocent). Billy-Bob was assigned to the toy department as a sales associate. He learned his area and the toy department was a shining example of what a toy department should be. The problem was Billy-Bob was great at his job.

Soon, the store manager, zone managers, and department managers all learned that Billy-Bob in toys was great at his job and could handle any task he was assigned. Soon you would hear “Billy-Bob in Toys, line two” over the intercom. Customers learned that Billy-Bob in toys could take care of them.

There are always one or two “Billy-Bob in toys” at any Wal-Mart. These people, in spite of receiving very little training, manage to thrive. Wal-Mart works them longer than a normal shift and they don’t get breaks. They work over time, but aren’t paid for it. Soon, Billy-Bob in toys gets burnt out because Wal-Mart doesn’t hire enough good people to get the job done. The store head count might indicate that there are enough people to get the job done. And, if all the people hired were as good as Billy-Bob and were trained and taken care of properly, Wal-Mart could not be stopped.

When Wal-Mart gets good people they work them to death. If Wal-Mart were to hire and properly train more quality people, then things would improve. However, Wal-Mart would have to pay these people a reasonable wage and provide a proper schedule that would include breaks and paid overtime.  The biggest thing Wal-Mart could do to improve is to provide adequate staffing levels to get the jobs done that need to be done. 



Disclaimer
The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney and/or accountant with any specific questions.
There is no one right answer to any business question that will cover all circumstances.
Please Visit McClendon Enterprises

Could Someone Beat Wal-Mart (Part 2) ?

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Hello and welcome back. Wal-Mart has one of the most sophisticated logistics and distribution systems in the world. Scan data is taken from the registers and sent not only to company headquarters, but also to vendors who can produce and ship the products to the Wal-Mart distribution center as the product is needed. Sort of a “Just-In-Time”-type system. The idea behind this system is that it provides everyone one in the chain the information they need to ensure that the stores have the product they need when they need it. Data is sent to the vendor who manufactures and ships the products to the Wal-Mart distribution center. The distribution center has a highly sophisticated  conveyor system that takes products from the trucks or train cars that are bringing merchandise to the warehouse “across the dock*” to waiting trucks which will take the product to the stores and be placed immediately on the shelves.

Could Someone Beat Wal-Mart (Part 1) ?

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Wal-Mart is the 500 pound gorilla that seems to be unstoppable. They are so big that they control all they survey. Wal-Mart is the undisputed leader of retail. They are the largest retailer in the world. But, there are chinks in their armor. Over the next few blogs we will take a look at some of those chinks and how they could be exploited.

Wal-Mart has been running roughshod over their vendors and suppliers for years. Wal-Mart buys at the price they set. They set the rules for what vendors and suppliers will provide for what price. If a supplier does not agree, that supplier no longer does business with Wal-Mart. Few can afford to lose Wal-Mart’s business. Not because Wal-Mart is so powerful, but because the company made investments based upon doing business with Wal-Mart.

Sears was like that years ago. At one point in time, Sears was the largest retailer. Sears would contract with local fence companies to install their fencing. It was a win-win situation. The fencing contractor got work they wouldn’t ordinarily have and Sears would get a reliable source for fence installations.

The problem was that the fencing contractor would have to make investments in more trucks and other equipment, as well as hire more people to be able to fill the Sears contracts. When the initial contract expired, Sears would negotiate new terms more favorable to Sears.

The contractor could not afford to lose Sears’ business. But it could not afford to keep it either. There came a point in time when the company was barely making a profit on doing business with Sears because it had to pay off the investments.

If another company could provide a market for those vendors who have lost favor with Wal-Mart, they could offer products that Wal-Mart won’t offer. Wal-Mart provides a very narrow choice of products (one or two brands of mayonnaise, one or two brands of chili). So, if another company offered products by these orphaned vendors, then customers win with a larger product selection, the vendors win with a market for the excess capacity they have thanks to having done business with Wal-Mart, and the new company wins with sales to former Wal-Mart customers.

Disclaimer
The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney and/or accountant with any specific questions.
There is no one right answer to any business question that will cover all circumstances.
Please Visit McClendon Enterprises