retail news in context, analysis with attitude

The Wall Street Journal reports this morning about the decisions that Walmart is making as it tries to catch up with's lead in the e-commerce arena.

An excerpt:

"Wal-Mart Stores has concluded it doesn't want to simply clone Amazon's model since it also has to worry about supplying its stores.

"Instead Wal-Mart is creating a vast new logistics system that includes building new warehouses for Web orders, but also uses workers in stores to pack and mail items to customers, because Wal-Mart has determined it is faster and cheaper to send some shipments from its more than 4,000 U.S. stores ... Wal-Mart is being forced to invent its own solution because it still hasn't figured out how to economically deliver all its products into the hands of online shoppers, current and former executives say. It is a remarkable admission for the Bentonville, Ark., company, which became the world's largest retailer in part by the efficiency of its supply chain."

And another:

"Neil Ashe, Wal-Mart's president of global e-commerce, says Wal-Mart has solved similar conundrums before—most notably in 2005, when it reinvented its supply chain after plunging into the fresh-grocery business. Groceries now account for 55% of the company's U.S. sales.

"Still, he concedes the online problem is challenging. He recounts a conversation at a director's meeting held at the e-commerce headquarters in San Bruno in March, when he was asked how long it would take and much it would cost to build out the e-commerce operation. 'It will take the rest of our careers and as much as we've got,' Mr. Ashe says he replied. 'This isn't a project. It's about the future of the company'."
KC's View:
He's right. It is the future of the company. And Amazon has a big e-commerce lead. The challenge is, in the broadest sense, to adjust a bricks-and-mortar culture so it can be accepting of e-commerce initiatives. It means breaking down silos that are difficult to eradicate. And it means dispensing with legacy issues that have been built up over decades.