Published on: October 20, 2021
Yesterday we took note of a CNBC report that Walmart plans to give its Walmart+ members advance access to its Black Friday deals, which, if outside estimates are to believed, has the potential of making some 32 million US households feeling a little more joyful about the end-of-year holiday shopping season.
I commented, in part:
I think it is fair to suggest that this is antithetical to Walmart's traditional way of thinking, which would've wanted to treat all customers the same.
The thing is, not all customers should be treated the same. Best customers should get better access, better prices … and if a retailer can get the customer to pay for that treatment, so much the better, because they're even more invested in getting maximum benefit out of their membership.
One MNB reader responded:
I saw your comments on Walmart’s new first crack policy. I couldn’t agree LESS with you.
Having worked for Walmart for over 18 years as a VP and listening to Sam Walton and David Glass speak daily about EDLP, I can assure you that both would not have approved.
Walmart got off the tracks years ago when they got behind Amazon and tried to catch up. They threw out EDLP to do their online business and stopped their price matching program. They watched Amazon venture into many non-retail venues that were profit centers and found they had none. So the answer has been, whatever Amazon does we will do, or at least try.
Walmart seems to be okay with not charging for having associates at 15.00+ an hour do my shopping while shelves go un-stocked and they block the aisle while picking orders. They don’t care that I have to check myself out without a hello or thank you. (Besides it being on the receipt. Not to mention having 4-5 associates in yellow vest standing in the checkout area WATCHING…)
Sam's vision was to bring value to small town America, the same prices that were in Dallas would now be in Bentonville for ALL, not cutting in line, no early hour for the chosen few. So I get all the games that are going on, but that doesn’t mean you have to follow them over the cliff… There are so so many areas that Walmart is behind the industry like check out, item selection, pricing, etc., because they're trying to make sure they can still see Amazon taillights off in the distant.
Write it down, 4-5 years Walmart will follow the rest of the retailers down the path of failure.
Wow. That's dire.
Let me pose a question here, one that anyone can answer. (I have no idea what the answer is.) Would sam Walton's approach to retailing have been successful ins 2021? Or would he have been so reflective of days gone by that he might not have been able to adjust?
Another MNB reader had a different take on the Walmart+ program:
Thank you for pointing this critical issue out! I am always shocked that companies are so obsessed with gaining new customers that they offer lavish rewards (how many free phone ads for new service do you see??) while completely ignoring their current customer base. There is such a great opportunity which I think the grocery industry has been very effective at executing with loyalty programs. Another good step forward!
Got the following email from MNB reader Steve Ritchey:
My older brother is a retired college Associate Dean and Clinical Professor. Last year, due to the pandemic and his health concerns, (he has an autoimmune disorder so he and his wife were extremely vigilant about being out in public). They turned to online ordering and either curbside pickup or home delivery for their grocery needs. When they found something hard to find they would tell me and I would locate it in one of the many stores I called on then and still call on.
Now that things have eased up a bit, and both he and his wife are fully vaccinated, they can go to the grocery stores again. But, they choose not to because by ordering online and doing curbside pickup, they spend less. They plan their meals on Fridays, place an order and he picks it up on Saturday. It requires planning, but he says they save a noticeable amount on their grocery bill.
Those of us in retail know that supermarkets are set up to entice you to spend more money while in their stores.
I also wonder how many people, due to being at home, unable to shop, and maybe being short of money due to the pandemic, have learned they don't really need the latest and greatest widget or gadget, or electronic toy to be happy, where in past times, they considered such things necessities.
I've been in CPG sales long enough to realize that the reasons people behave and make purchase decisions are more than plentiful, and we could spend the rest of our lives enumerating them. I just thought I might point out the story of someone close to me.
On the subject of how to eliminate the coin shortage problem, one MNB reader wrote:
A terrific program for resolution that can be used for cash and credit / debit transactions is “Round Up for Charity”. Wouldn’t a national program that is implemented which gives consumers a choice for a contribution rather than getting change? It could be industry specific such as food banks for our industry.
Only problem could be that your favored charity might be different from mine - and I can think of some places where I definitely would not want my money to go.
And, responding to Michael Sansolo's column this week about how sustainability concerns seem to cut across all demographics, a conclusion reached by a study done by the Coca-Cola Retailing Research Council, MNB reader Craig Craig Espelien wrote:
I have been helping a new startup in the food waste elimination space, Phood Solutions, and have dug deep into what this costs the industry. Waste from grocery stores makes up a large percentage of what goes into municipal landfills and has an immense negative impact on profit (from my numbers and the Phood Solutions approach, there is about $3.7 billion the industry can drop to the bottom line by understanding where this waste is coming from, digging into the analytics of what is causing it and eliminating the waste before it ever occurs). This does not include the roughly 30 tons of carbon created by getting this now excess food from the farm to the trash.
The numbers are staggering - but can be applied in a way to helps everyone understand that our first move from trash to compost - which was once considered the end-all-be-all of food waste containment is simply re-apportioning trash from bad trash to good trash (see the EPA’s Food Waste graphic below). At Phood, we seek to eliminate it altogether starting in deli, moving to produce and then into other fresh departments (we play at the top of the pyramid - reduce the volume of surplus food generated).
As an example, roughly one-third (~35%) of all food in the US goes to waste. When you compare this to roughly 12% of people in the US experiencing a significant level of food insecurity we see that by simply (and I do not mean it is simple or easy) figuring out how to stop the waste from occurring, we could feed our own hungry three times over.
We do not pretend to be the only solution - but we are focused on being part of the solution and one that helps shine a light on the problem and address three key areas: Feed the hungry … Save the planet … Help retailers make more money
The CCRRC report is amazing - and has been sent to our entire team!