What has made Walmart a shutdown star?

Photo: Walmart
May 12, 2020

Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.

A massive store base, legendary supply chain capabilities and omnichannel investments have given Walmart a sizable advantage amid the pandemic and appears to position the chain for e-commerce success long after the crisis is over.

“It has a massive rural and urban brick-and-mortar footprint that offers inventory positioned around the country in a short period of time,” says Jim Barnes, CEO of EnVista. “That huge item assortment and the ability to get the product to the masses in different ways, shapes and forms is a game-changer.”

Walmart has taken advantage of its strong distribution networks, buying directly from suppliers and clout to assure more consistent stock levels versus some others. But it’s the early work in e-commerce that has positioned Walmart well ahead of other grocers, including Amazon.

Having 3,100 online grocery pickup locations — more than any other retailer (and way more than Amazon’s 150) — particularly helps. Almost overnight, says Don Stuart, managing partner at Cadent Consulting Group, “The coronavirus pandemic transitioned pickup and delivery from a perk to a public health necessity.”

Beyond the sheer number of stores that can operate as micro fulfillment centers, Walmart also has other advantages over Amazon. Neil Saunders, managing director for retail at GlobalData, says, “It has a fuller assortment, better own label, more buying power and more significant economies of scale.”

Plus, timely enhancements to its website and app have made the online shopping experience easier and more pleasant, which boosted conversion and sales.

For new online grocery shoppers to stick around after the coronavirus threat ends, Mr. Barnes believes Walmart needs to further unify its digital and brick-and-mortar experiences.

Garry Church, VP of enterprise retail at Inmar, added that the massive adoption of its app amid the pandemic has given Walmart “unparalleled customer data” — including basket size, customer order/pickup routines, demographics, etc. — that can be leveraged in the future to provide more relevant offers. He said, “The more app downloads, which include a unique ID via an account number, the more data the company will have about customers specific to e-commerce.”

DISCUSSION QUESTIONS: What can rivals learn from Walmart’s performance during the pandemic? How should Walmart and others be looking to build on any COVID-19 gains?

Please practice The RetailWire Golden Rule when submitting your comments.
"Walmart may not be the fanciest of retailers but boy are they competent! "
"Other retailers can learn many lessons from Walmart’s response to the pandemic. The real issue is, can they implement them?"
"The pandemic plays to Walmart’s strengths: thousands of stores, e-grocery dominance and strong supplier collaboration."

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21 Comments on "What has made Walmart a shutdown star?"

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Jeff Weidauer

Walmart’s pandemic response success is the result of one thing: agility. The company has stayed focused on the pandemic-driven changes and quickly adapted with customer-friendly solutions that make the most of its footprint and logistical prowess.

Bob Amster

Retailers have been trying to emulate Walmart for decades. Retailers and individuals can learn from Walmart but what they learn is not easy to replicate. Walmart is on a different scale, with very large financial resources. Those characteristics give Walmart the ability to try and trash, hide mistakes, and it gives them more advantages than almost all others. As will have been the case with many retailers, Walmart will have learned that certain changes they might not have made pre-COVID-19 are, in fact, keepers for the long term. No healthy retailer has been spared the benefit of lessons learned as a result of the pandemic, from Walmart to mom and pops.

Richard Hernandez
Richard Hernandez
Director, Main Street Markets
1 year 6 months ago

Walmart has adapted very well to accommodate the changes in business that have occured because of COVID-19. They close the store nightly to clean and restock the stores, staff is constantly putting out merchandise and cleaning daily, and they are only focusing on the main SKU replenishment on on-demand categories such as paper and cleaners. I have been in several Walmart stores over the past four weeks, and you can see that every employee is serious about keeping to the social distancing, protective and cleaning processes that are now in place. I believe some other chains like H-E-B, Rouses and the like are also leaders in being nimble enough to change and support their communities during this pandemic.

Michael Terpkosh

To be transparent, I have never been a Walmart fan and rarely shop their stores. However, many retailers can learn from the nimble, strategic response of Walmart during the pandemic to meet the needs of the consumer. Walmart certainly has not been flawless during these difficult times, but they have raised the bar on how to flex their business model very quickly to react to the changing retail environment. The result is an enhanced positive view of Walmart by many consumers.

Michael La Kier

Beyond the sizable store base, best-in-class supply chain capabilities, and shrewd omnichannel investments, Walmart has benefited most by acting in a nimble, shopper-first manner. Their speed to market with offerings and communication are lessons many other retailers can learn from.

Lee Peterson

We all spent the early-’00s dissing Walmart, but boy did they prove us wrong. They started creating better health care choices in their stores from proactive (organic food, private label) to reactive (minute clinics, pharma, eye care, etc.) more than 10 years ago. They had over 1,000 stores with excellent BOPIS before COVID-19 and have created employee training schools that are unparalleled in the retail world. IMO, they have always been the only retail brand that saw Amazon coming and said, “not in my house” and have competed with them on every level.

Given only the above (as just a piece of their success — see also: logistics genius), if they come out of this situation stronger than ever, they totally deserve it. Sure it’s great to have the wherewithal, but it’s more than that. They’ve had the foresight and the guts to execute as well. Hats off Wally, sorry to ever doubt you, even if it was 20 years ago!

Neil Saunders

Walmart may not be the fanciest of retailers but, boy are they competent! Walmart gets the basics of retailing and it shows. Even before this crisis, Walmart stores were well-stocked and well-run; much more so than many other grocers and mass merchants. During this crisis, Walmart’s logistical power and its flexibility have come into their own. There were issues of low stocks during the panic buying period, but Walmart has recovered quickly and has kept everything operational. Having financial muscle and enormous buying power both help, but understanding and focusing on the fundamentals of retailing and getting those everyday basics right is what really counts. That’s an ethos that has always been embedded within Walmart and it’s something some other retailers could learn from!

Jeff Sward

Walmart is proof positive of the importance of combining brick-and-mortar AND e-commerce. The synergies and efficiencies they bring to the shopping/buying journey. The sheer number of online grocery pickup locations. They made it a point to evolve. Some of their forays into the e-commerce business have been bumpy, but in the grand scheme of things they have been a great student of evolving shopping and buying patterns. It’s not like they predicted a pandemic, but they were way better positioned for a dramatic, fast, real-time shift than probably any other retailer.

Lisa Goller

The pandemic plays to Walmart’s strengths: thousands of stores, e-grocery dominance and strong supplier collaboration.

Consumers want omnichannel options, as it can be hard to secure home delivery or pickup times for grocery. Walmart encourages physical distancing in lines and one-way aisles to help consumers feel safe. More stores mean more options for urban e-commerce fulfillment.

While I’m unconvinced about “better own label” and “unparalleled customer data,” Walmart is doing many things right to be a reliable source of essentials for local communities.

Dick Seesel

Walmart’s longtime expertise in logistics and supply chain management has served it well in times of crisis (hurricane recovery, etc.) but never more than now. Its third CEO, Lee Scott, rose through the logistics ranks instead of merchandising or store operations, and he was at the center of Walmart’s explosive growth in the ’80s and ’90s before getting the top job. This has always been central to Walmart’s sprawling footprint, its leverage with vendors, and its growth in groceries and online.

There are better merchants out there (Target, in my opinion) and stronger online-only retailers like Amazon, but nobody who can compete with Walmart’s skill running a true omnichannel business when it’s needed most.

Kathleen Fischer

Walmart’s massive footprint – especially in rural areas – has proven to be invaluable. That footprint paired with an established online grocery service allowed it to fill customer needs and remain essential. A key area for other retailers to learn from is Walmart’s ability to adapt and stay agile as customer needs and government requirements have changed rapidly over the past few months.

Doug Garnett

Is it possible we can learn Amazon’s weaknesses through what’s happening right now?

Amazon brilliantly manages its PR and growth to give the appearance of an unassailable behemoth. Yet my own experience with Amazon right now is that even pandemic related goods are promised and not delivered — because Amazon has no control over sellers to ensure quality of service.

When we rate company performance and contribution to society after this is all over, I expect we’ll find that Walmart, Kroger and Target have been the true retail heroes of the pandemic — despite a lot of initial hype suggesting this would be the final nail in the coffin of everyone except Amazon.

Bob Phibbs

Let’s be honest, having all your competitors closed gives you a leg up few can hope for. Yes they were efficient, but still. What can rivals learn? Add grocery so you won’t be deemed “unessential” the next time.

Steve Montgomery

Other retailers can learn many lessons from Walmart’s response to the pandemic. The real issue is, can they implement them? For many the answer will be no simply because they lack the resources to do so. Those resources include the number of Walmart’s locations and their financial resources. The locations provide a large and well-located number of sites for BOPIS that no other brick-and-mortar retailer can replicate.

Paula Rosenblum

Walmart.com has made me a believer. Outperformed Amazon and any other retailer.

Stores matter. They have leveraged their stores and distribution network to a great advantage.

Joe Skorupa

Supply chain strength + deep customer analytics + stores everywhere + omni-commerce strength + continuous investment in innovation = Walmart success.

Andrew Blatherwick

With 3,100 fulfillment centers, BOPIS collection centers and retail stores, Walmart has a massive advantage over pure play grocery online shopping, they can offer every method of getting product to consumer making it easy, cost effective, timely and efficient. Other retailers with large store networks can also take advantage of their assets in the same way, they have just got caught in the Amazon headlights.

When you have an efficient supply chain already in existence and the ability to truly deliver to local consumers quickly and efficiently you must have an advantage. It is significantly quicker to develop and put right your online presence than it is to build a large network of stores. Amazon have tried to replicate it and found it much tougher than they thought. Walmart have shown how you can make it work, other retailers just need to get out of the headlights and make it work too.

Richard J. George, Ph.D.

Walmart has demonstrated the capability to respond quickly, especially for a company of its size. Walmart’s access to capital and efficient supply chain makes it difficult for rivals to quickly emulate. Going forward, the integration of online and in-store to a seamless customer experience is the next challenge. Kudos for efforts to date.

Stephen Rector

The online experience on walmart.com is much better than Amazon in my opinion. Their app is very intuitive and for household goods and non-perishables, it stands out from the rest of the competition.

Harley Feldman

Walmart is the penultimate retailer. They are totally focused on their customers at all times. The pandemic gave them an opportunity to support their customers in a new environment, but they did not miss a beat, from in store safety to managing their supply chains more effectively than others to enhancing their app, Walmart did what Walmart does better than any other retailer, respond quickly to their customers. Walmart should continue to listen its customers, take advantage of lessons learned from the COVID-19 experience, and provide the next set of customer experiences that their customers demand.

Mike Detroyer

There is no retailer better positioned to take advantage of the disruption to the retail landscape the COVID-19 pandemic has created. They have met the challenge with speed that is, frankly, uncharacteristic of Walmart. I give most of this credit to Doug McMillan. The Walmart army can execute incredibly well but rely heavily on their leader to determine the speed and aggressiveness with which they execute. Walmart needs to execute the transition from a siloed brick-and-mortar and e-commerce organization to a true omni-channel retailer, not just in a customer-facing way, which they have, but through the organization right down to every buying team. Until every Walmart merchant has skin in the e-commerce game Amazon will continue to own that channel. Grocery and COVID-19 have ramped up customer acquisition but they need to achieve excellence online beyond grocery to exploit the advantage.

"Walmart may not be the fanciest of retailers but boy are they competent! "
"Other retailers can learn many lessons from Walmart’s response to the pandemic. The real issue is, can they implement them?"
"The pandemic plays to Walmart’s strengths: thousands of stores, e-grocery dominance and strong supplier collaboration."

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