Published on: June 6, 2011Walmart CEO Mike Duke told the company’s annual meeting last week that the company’s central goal is to serve what he called “the next generation customer,” which he described as including “millions who are striving to join the emerging global middle class. They're connected to the world through smart phones and social media. They're in charge of when they shop and how they shop, and they know who has the lowest prices." Duke said that “serving these customers is a clear and direct path to a stronger business and a better company ... Walmart is the best-positioned retailer on the globe. We are right in the sweet spot of the next generation customer."
In his speech to the meeting, Duke said the company has five basic priorities:
• "Growth in sales, growth in the number of customers, and growth through new stores and acquisitions." Duke said that the company’s plan for turning around comp sales in the US is “the right plan, and it is gaining traction.”
• Duke reiterated Walmart's unwavering commitment to the second priority, EDLP and EDLC. "Nothing builds more loyalty with customers than everyday low prices," he said. "Everyday low prices in every market. No exceptions. No excuses."
• “We have to be more intentional about developing talented leaders, managers and associates around the world,” Duke said. “That means better training and greater opportunity for our store associates. And it means thinking globally and building teams that reflect today's world.”
• Duke also made the point that “live better” remains a key component in its strategy: “Anyone who has paid attention over the past year - to our work on healthy foods, fighting hunger or sustainable agriculture - knows we have a model that works and momentum behind it. We must continue to broaden and accelerate our work to make a difference on big issues."
• Duke also made a commitment to the world of e-commerce, saying that Walmart “will not just be competing,” but “will play to win.”
Duke says that “Walmart has been making purchases and growing internally to build up its online operation, which is in synch with its brick-and-mortar stores through programs like online ordering with pick-up in stores.”
The clear impression, the Wall Street Journal writes, is that Walmart “appears to be setting the company up for a run at Amazon.”
- KC's View:
- MNB has long been an advocate for retailers keeping their eyes on the next generation of shoppers, arguing that it is critical to begin establishing an infrastructure and strategy now that will be relevant to these consumers when they become the center of the target. (I checked the archives, and it looks like the first time I brought it up here was in February 2003 ... a time when my hairline was both lower and darker.)
Duke is saying the right things about the building blocks for such an approach, though there are folks that I talk to who are convinced that it is all just lip service, and other folks think that the company is spreading itself too thin, and still others who think that Walmart is just trying new tactics the way some people throw spaghetti against the wall to see if it is done.
It is interesting that the annual meeting took place as Walmart opened its first Express store in Gentry, Arkansas, which the Associated Press described this way: “The long, narrow concrete box, which features a powder-blue Walmart Express sign, is less than one-tenth of the size of a super center. The store, which has exposed pipes and yellow walls, carries most of the basics that its bigger cousin carries, from bacon and milk to socks and DVDs.”
We’ll know a lot more about Walmart’s commitment based on whether this format rolls out faster than other small store concepts that the retailer has attempted.
All the chips seem to be on the table.