Question

Walmart is licking its wounds from a terrible 4 th quarter in terms of its e-commerce performance. As Sturat Lauchlan writes, “There are many demographics, especially younger and professional segments, for whom Walmart is not the destination of choice online. This is a tough nut for Walmart to crack, and one that it can only break by more heavily marketing its services and proposition. Walmart needs to invest in evolving and adapting. If it doesn’t, it will become irrelevant.” Walmart’s CMO has hired you as a marketing strategy consultant.

Provide a brief description of the industry, its market(s), economic trends, target audiences, and best practices.

a. Identify the main issues concerning Walmart.

b. Choose the most crucial challenge from the issues you identified. Explain why you believe it is the most challenging challenge.

c. Provide a number (at least three) of alternate solutions to addressing this challenge, and expand on the solution you believe is most appropriate.

d. Explain why your chosen solution is the best, and what positive and negative outcomes you believe it will generate.

Please provide a summary of the above questions

Answer 1

Online retail is a highly competitive marketplace with new technologies and platforms enabling even the small players to reach out to the consumers in more effective way and convincing them to make a purchase.

2017 was a tough year for the retailers but with the signs of inflation reducing, 2018 can be a better year, with consumers easing out on purchases. However, the rising costs of operation will always call for cost effectiveness and higher efficiency to meet the challenge of being productive.

Walmart is faced with its inability to attract young generation of customers even with its low prices who in turn are attracted by other smaller, but more agile and innovative players that are able to match the frequency with the young consumers. The most crucial challenge is to understand the requirements of younger generation and critically analyze the kind of merchandise they need and the kind of experience they get with their preferred online retailer.

The most important task before Walmart to evlove its online avatar by brining some radical changes. These changes may include investment in technology, making digitisation a tool to enhance its service, using technques like Augmented Reality ( AR) and Virtual Reality ( VR) to offer out of the world experience to the customers, while using personalising tools like Artificial Intelligence (AI). Another part that needs to be changed is to give freedom to the customer to try the item before he / she decides to buy. It again calls for very agile and lean supply chain, to be cost effective and service efficient. Another point is to increase the customer focus and reach the right customer with right time with right product, all with the use of technology, by assessing the needs and preferences of individual and offering what he / she wants at the right time.

The solutions are relevant in today's retail environment, with most of the leading ( and small) retailers focusing more on knowing their customers, understanding their needs, allowing them more freedom to buy and offering them excellent shopping experience. The only flip side is the high cost of transformation and risk of failure of alignment of the new model with the current set up, but in wake of the situaion, it is the time to make a decision.