The WSJ is reporting that Wal-Mart is launching a major overhaul or its stores:
WSJ.com - Heard on the Street: "The world's largest retailer by sales is attempting a sweeping makeover aimed at paring its inventory and labor costs while enticing affluent customers, some of whom now buy groceries in its stores, to spend more in other areas. As part of that effort, Wal-Mart will remodel nearly half its U.S. stores over the next year...
The retailer launched its effort to remake itself and crank up sales a year ago. It shifted its advertising to focus less on repeating Wal-Mart's 'always low prices' mantra and more on building its image as a "lifestyle" retailer offering trendy apparel and housewares. As part of the revamp, Wal-Mart is pruning the number of products it carries in each store to focus on top sellers. It is overhauling workers' shifts in its stores to have more employees on hand during each day's busy periods and fewer during slow times."
What's interesting about this story is that the retailer best known for competing on having the lowest price is finding that competing striclty on price is not such a good idea. Imagine that! If Wal-Mart has decided it needs to do more than just have the cheapest price, then the little guy competing against Wal-Mart certainly needs to offer more than just low prices or he will go out of business.
The article goes on to say that Wal_mart is remodily the stores with nicer faux-wood floors, wider aisles and nicer restrooms. I've always liked shopping at Target much better than at Wal-Mart. I know I'm paying slightly more, but it's a much more enjoyable shopping experience so I'm willing to pay more.
The other thing that is interesting about the changes Wal-Mart is looking at implementing is that they are planning on carrying less inventory. This is because they know one of the cardinal rules of retail: most sales are driven by just a few products. Success is not about stock more products but figuring out which of the many products you carry are selling well and restocking them in a timely manner.
I see this all the time with retailers. They might have 18 varieties of a product in stock. Sixteen of these don't sell at all or sell very little -- and the two that sell well are inevitably out of stock.
The rules of retail don't change. Figure out what customers want and have it in stock. Easier said than done.
WSJ.com - Heard on the Street: "The world's largest retailer by sales is attempting a sweeping makeover aimed at paring its inventory and labor costs while enticing affluent customers, some of whom now buy groceries in its stores, to spend more in other areas. As part of that effort, Wal-Mart will remodel nearly half its U.S. stores over the next year...
The retailer launched its effort to remake itself and crank up sales a year ago. It shifted its advertising to focus less on repeating Wal-Mart's 'always low prices' mantra and more on building its image as a "lifestyle" retailer offering trendy apparel and housewares. As part of the revamp, Wal-Mart is pruning the number of products it carries in each store to focus on top sellers. It is overhauling workers' shifts in its stores to have more employees on hand during each day's busy periods and fewer during slow times."
What's interesting about this story is that the retailer best known for competing on having the lowest price is finding that competing striclty on price is not such a good idea. Imagine that! If Wal-Mart has decided it needs to do more than just have the cheapest price, then the little guy competing against Wal-Mart certainly needs to offer more than just low prices or he will go out of business.
The article goes on to say that Wal_mart is remodily the stores with nicer faux-wood floors, wider aisles and nicer restrooms. I've always liked shopping at Target much better than at Wal-Mart. I know I'm paying slightly more, but it's a much more enjoyable shopping experience so I'm willing to pay more.
The other thing that is interesting about the changes Wal-Mart is looking at implementing is that they are planning on carrying less inventory. This is because they know one of the cardinal rules of retail: most sales are driven by just a few products. Success is not about stock more products but figuring out which of the many products you carry are selling well and restocking them in a timely manner.
I see this all the time with retailers. They might have 18 varieties of a product in stock. Sixteen of these don't sell at all or sell very little -- and the two that sell well are inevitably out of stock.
The rules of retail don't change. Figure out what customers want and have it in stock. Easier said than done.
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