retail news in context, analysis with attitude

The Wall Street Journal reports that Walmart, apparently stung by the fact that its internet retailing arm continues to lag behind Amazon.com as well as a number of other retailers, is streamlining its online management structure in a bid to integrate it better with the company’s bricks-and-mortar operations.

According to the story, “E-commerce managers in developed markets will now report directly to the executives in charge of stores in each country, instead of reporting to a global e-commerce team.

“Wal-Mart also said that Raul Vazquez, who had been in charge of global e-commerce initiatives in developed markets, and Steve Nave, who oversaw California-based Walmart.com, are leaving the company ... By placing leaders in key countries in charge of their e-commerce strategies, the reshuffling leaves a diminished role for Wal-Mart global e-commerce head Eduardo Castro-Wright, who will now have fewer executives reporting directly to him.

“Mr. Castro-Wright was appointed to head a newly created global e-commerce team last year after being replaced as president of the struggling U.S. store business. Mr. Castro-Wright, who also oversees global sourcing operations, will remain in charge of e-commerce strategy and acquisitions and maintain a ‘dotted-line’ relationship with e-commerce leaders in the developed countries.”

The Journal writes that “in the U.S., Walmart.com will now be headed by Joel Anderson, who was serving as the retailer's senior vice president of the northern plains region, but who had formerly worked in e-commerce as a chief merchant at ToysRUs.com. Under the new structure, he will now report to Wal-Mart U.S. president Bill Simon.”
KC's View:
The story notes that Walmart does not break out its online sales from bricks-and-mortar sales, so it is hard to know the extent to which the retailer’s e-commerce efforts are not working. But this move raises the specter that when Walmart releases its most recent quarterly numbers later this week, they aren’t going to be as positive as the company would like ... and so it is taking some preemptive action to reassure investors.

The other thing to remember, though, is that integrating the physical and virtual stores is the Walmart long game - that, from everything I’ve been told, Walmart sees the small stores it is opening as potential delivery depots for online orders, and that Walmart sees this structure as being a potential game-changer in its ultimate battle with Amazon.com.

I’m not sure this will play out as well as Walmart would like, but I’m told this is the plan. And streamlining management may just be laying the groundwork.