retail news in context, analysis with attitude

The Wall Street Journal reports on how Walmart is juggling its leadership roles, on top of the 1,000 corporate job cuts it is making at headquarters, as a way of bringing together in-store and online responsibilities in a way that creates synergies.

According to the story, "Tony Rogers, Wal-Mart’s chief marketing officer, will also lead online and digital marketing efforts, including for Jet.com."

The story goes on: "Jeremy King, head of the WalmartLabs engineering team, is being promoted to U.S. chief technology officer ... Michael Bender, chief operating officer for e-commerce, will leave the company, Chief Executive Doug McMillon told staff in a memo Friday. Scott Hilton, chief revenue officer for Jet.com, will become chief revenue officer for all e-commerce operations. Jamie Iannone, chief executive of SamsClub.com, will take on responsibility for all of the warehouse chain’s technology efforts, including in stores."

McMillon also said in the memo that Walmart is hiring Clay Johnson, an executive at General Electric Co. ’s power business, as its new enterprise chief information officer, responsible for "lowering our costs, getting the benefits of scale, associate experience and cyber security."

Bloomberg reports that "A new incubation and strategic partnerships division will be led by Seth Beal, who will focus on identifying areas that have the most growth potential."

In addition, it is reported that "Liza Landsman was promoted to president of Jet.com from her prior position as chief customer officer" and that "Jordan Sweetnam is now the retailer's vice president of customer experience, product, focusing on products, shoppers, and faster execution across the board for the retailer. Sweetnam was formerly the vice president of global product for Walmart eCommerce."

The Journal provides the context for these decisions: "Wal-Mart purchased Jet.com Inc. for $3.3 billion in September, quickly placing (Mark) Lore, Jet’s founder, at the head of its e-commerce operations. By November Mr. Lore had already made some management changes, naming Jet co-founder Nate Faust to lead fulfillment operations for Jet.com and Walmart.com. Friday’s changes mark a more complete reworking of Wal-Mart’s e-commerce leadership structure."

Re/code offers the following analysis: "If Walmart is going to better compete with Amazon, its stores are going to have to become a real advantage — not unwanted baggage." And it quotes this line from the McMillon memo as being important in terms of the company's strategy: "We were starting to see our stores and eCommerce teams solving many of the same problems and now we can remove what might’ve become more duplication in the future."'

Lore put it this way, according to the Bloomberg story: “We’ve talked a lot about becoming a more customer-centric organization. Our strategy is about offering more choice, competitive prices - particularly on food and consumables - and operating on the strength of the world’s most efficient e-commerce supply chain ... We’re on a mission to reshape e-commerce and create a best-in-class shopping experience that empowers customers to save money in completely new ways."

Bloomberg writes that "Wal-Mart is under increasing pressure as Amazon pushes deeper into the grocery business. Big-box retailers have traditionally used food to draw shoppers into stores, with hopes that they buy electronics, clothing and other goods with higher-profit margins. But now Amazon may pick off more of those customers. The online giant is even targeting food-stamp recipients under a pilot program to begin this summer. Wal-Mart is responding to the threat with its Jet.com Fresh service, offering delivery of fresh food without a membership fee."

CNBC also provides a little history: "When traditional brick-and-mortar retailers began launching websites years ago, leadership teams were often separate. But as the world has changed and many consumers shop both online and in-store, more retailers are moving to integrate teams from two separate operational divisions, to one. While it sounds like a simple concept, it can be difficult to execute. Some argue it's necessary integration pain, and Wal-Mart is later to the game than other retailers."
KC's View:
While in the beginning Walmart took the position that it was going to run its own website and Jet as separate entities, at least from the consumer point of view, I've never felt that this was an entirely workable - or even desirable - premise.

Of all the analysis quoted above, I think Re/code gets it right:

"If Walmart is going to better compete with Amazon, its stores are going to have to become a real advantage — not unwanted baggage."

But I'd take it a step further and suggest that the in-store folks at Walmart need not to think of online as unwanted competition.

Inevitably, at a retailer that has been around as long as Walmart and with a culture that is so ingrained, there are going to be tensions. Breaking down the leadership walls around these areas is critically important, though I have to think that there could be some additional cultural strains created by Jet folks taking on leadership roles in a company they only joined less than a year ago.

It seems to me - and Walmart folks should feel free to correct me if they think I'm wrong - that it is important that everyone within Walmart, no matter where they work, see all these moves simply as a beginning. They cannot see it as the end ... because if they do, it will be.