retail news in context, analysis with attitude

Walmart hosted its annual shareholders meeting last week in Arkansas, and...

• Walmart's board announced the election of Greg Penner as the company's new chairman, succeeding his father-in-law, Rob Walton, who is the son of founder Sam Walton. Penner, who has been serving as vice chairman of the company, is just the third chairman in the company's history.

Investors Business Daily reports that Penner's chairmanship of the board's technology and e-commerce committee no doubt was part of the strategy behind his new role, since it "comes as Wal-Mart navigates the shift to online shopping and plans to roll out a new unlimited online shipping service that will challenge Amazon's Prime service."

• The New York Times reported on the challenge this way: "With less than one-sixth the online sales of Amazon, Walmart has been repeatedly outgunned and outsmarted by Amazon’s price-matching, robot-utilizing, competition-crushing machine.

"And now that sluggish sales are persisting at its supercenters, and with consumers spending more and more time shopping online, Walmart’s need to play catch-up in its online business loomed large at its annual shareholder conference on Friday. Doug McMillon vowed to tackle that quandary as part of the changes he outlined as the company’s relatively new chief executive."

• MNB fave Burt P. Flickinger III, managing director of the Strategic Resource Group, tells the Times that Walmart needs to make up for lost time:

“ has been severely mismanaged,” Flickinger says. “Walmart would go a few years and invest strategically and significantly in e-commerce, then other years it wouldn’t ... Meanwhile, Amazon is making moves in e-commerce that’s put Walmart so far behind that it might not be able to catch up for 10 more years, if ever.”

• It's only been two months since Walmart began raising wages for its employees, but the company says that it already has had an impact on employee retention, Reuters reports. The company says that turnover is down and applications are up, though it did not provide any details beyond that.

According to the story, "McMillon said the company would look to raise wages in the future beyond next year's $10 minimum rate to stay competitive in attracting and retaining workers. He did not provide a timeframe or other details."

Reuters notes that "Wal-Mart increased its minimum pay to $9 an hour for its U.S. staff in April, providing a raise for half a million workers, and promised to hike it again to $10 an hour next year. The federal minimum is $7.25, though some states impose higher minimums."

• And, in a metaphor that warmed my heart, CEO McMillon urged the company's employees "to summon their inner Hans Solo, Chewbacca, and Princess Leia to fight the evil empire of stagnation and help the world’s largest retailer resume faster growth," according to the Fortune story, which went on: "McMillon said the retailer’s No. 1 enemy, ahead of rivals, was its own bureaucracy, and he called on store workers to take more initiative on their own. 'The truth is the real villains are lurking within the company,' said McMillon. 'Our real villains are things like bureaucracy, complacency, a lack of speed, or a lack of passion'."
KC's View:
If McMillon wanted to generate sympathetic coverage from MNB, the best way to do so was to start using movie metaphors. Though Reuters did fairly note that he seemed to be "unaware of the irony of the world’s largest company by far, with 2014 sales of $482 billion, one seen by many as the empire that needs to be fought against, is trying to position itself as the underdog." But hey...a movie reference is a movie reference.

(BTW...I have no illusions that McMillon cares one bit about getting favorable coverage from MNB. But I'll tell you this. I'm sending him a book.)

I do think that Burt Flickinger is absolutely right that Walmart has to make up for lost time in the e-commerce arena. While much has been made of the fact that the Waltons have kept the power in the family, I think that in many ways this meeting reflects an embracing of future challenges, not just a celebration of past victories. And that is critically important.

One other thing. It is really, really good for a behemoth like Walmart to adopt an underdog mentality. That's what Amazon does with its "today is day one" philosophy, and that's what companies have to do if they are going to be nimble enough to survive modern competitive realities.