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Leaked Walmart memo reveals competitive threats

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Re: Leaked Walmart memo reveals competitive threats

#51

Post by 542354234235 »

Red_Leaves_Flyy wrote: post #16

I want someone , *anyone*, to knock Amazon down. So here’s some free advice to Walmart. Consider Walmart’s weaknesses and how other companies address them. - manually stocked shelves Consider Costco’s model of placing pallets of product on the floor. Most Walmart’s have the vertical space to go up. Obviously redesigning their store experience is expensive and difficult with a stagnating industry and a lot of staff th…

For the people of Walmart, the problem is Walmart makes a ton of its money by vacuuming up all the low/no income customers that would have been served in smaller numbers by convenience type stores. If they go upscale like Target or Trader Joes, they lose that customer base and move into competition directly with those types of stores. Same with the layout. Sure, you or I will pay more for a store laid out for actual convenience and fully staffed decently paid cashiers that will get me in and out quickly, but most of their customer base wont.

It reminds me of Mcd’s problem. They can’t go upscale because people that will pay for it already like places like Chipotle or Chick fil a more and Mcd’s is so deeply branded as the classic cheap fast food. And their current customer base is heavily weighted at lower income busy people looking for the ubiquity, price, and mentally easy process.

Re: Leaked Walmart memo reveals competitive threats

#52

Post by potta_coffee »

godot wrote: post #14
mc32 wrote: post #2

I think Wal*Mart has an image problem. I’ve gone into their stores. Their stock assortment isn’t bad compared to the competition. In fact, aside from Whole Foods on the organic/bio side of things, they measure up very well and better compared to their competition. They are more of a hypermart where you can do one stop shopping ala Carrefour. The issues I see are: very drab color palette. Working class shoppers. Sure,…

> Working class shoppers. Sure, it’s elitist, but people like shopping alongside people in their own stratum. Not going to comment on the ethics/politics of it, but if people like shopping alongside people in their own stratum, then they have to accept that they have to pay a premium for it (i.e. shop at Whole Foods). You can't really say "I want to shop at the discount store but I also want only other wealthy people…

I pay more to avoid WalMart. I'm not even an elitist, I've just noticed in my area, the greeters are rude. After maybe 3 bad experiences in a row, I've decided to never go to WalMart ever again and it's been over a year since I've shopped there.

Re: Leaked Walmart memo reveals competitive threats

#53

Post by potta_coffee »

grillvogel wrote: post #26
mc32 wrote: post #2

I think Wal*Mart has an image problem. I’ve gone into their stores. Their stock assortment isn’t bad compared to the competition. In fact, aside from Whole Foods on the organic/bio side of things, they measure up very well and better compared to their competition. They are more of a hypermart where you can do one stop shopping ala Carrefour. The issues I see are: very drab color palette. Working class shoppers. Sure,…

maybe i'm weird but i actually prefer the vibe at walmart to the pseudo upscale feel of stores like target. at walmart you know what youre getting, theres no pretense that you are there for any other reason than cheap crap. people of all economic backgrounds are all there just to get the best deals.

The one thing I like about Target is that it's quiet, they don't play music there and there's rarely talking over loudspeakers etc.

Re: Leaked Walmart memo reveals competitive threats

#54

Post by 542354234235 »

hogFeast wrote: post #27

This kind of thinking is why grocery chains have struggled despite having the deck stacked totally in their favour. Online retail, much like offline retail, is about physical infrastructure. You still need warehouses with all the product, you still need fulfilment, all online changes is the balance of those factors. The core assets don't change. I can see how they are losing on branding but losing to Instacart tells…

> Online retail, much like offline retail, is about physical infrastructure. You still need warehouses with all the product, you still need fulfilment, all online changes is the balance of those factors. The core assets don't change.

Which is why it is so weird when offline entities adding online lose out over and over to online only. They already have most of the infrastructure and their infrastructure is being paid for by two separate revenue streams (existing in store customers and new online customers). It just shows how often and how prevalent it is for these companies to rest on their laurels and siphon off every available penny of revenue for shareholder and executive profit, rather actually investing real time, effort, and talent into the online space. Which is why online companies can start from such a disadvantaged position and still surpass.

Re: Leaked Walmart memo reveals competitive threats

#55

Post by throwaway0a5e »

pengaru wrote: post #34
handrous wrote: post #12

Earlier quoted context omitted.

Observations about the nearest Wal-Mart: 1) All the employees look sad, all he time. 2) They've obviously carefully tuned their check out staffing so that the lines are always long. This is such a constant that it has to be intentional, and they're doing a good job of it. 3) Sometimes they attempt to check receipts at exit. I don't get that at any other non-membership store. 4) All the shoppers look sad. 5) It's the…

Most of what you're observing is simply a reflection of the area demographics. It's similar to visiting a small town DMV. Your description of gambling machines reminds me of my last visit back home in IL, after they legalized gambling. It's very jarring to walk past locals glued to video slot machines at 9AM in a gas station. It's depressing as hell, I'm sure the walmarts have cashed in on the action too but I didn't…

I don't know why this is downvoted and I don't know why I didn't think of this comparison.

I've lived in five different states and been to Walmarts and flipped cars and the variance is EXACTLY like variance in DMVs in both QoS, clientele/employee demographics.

Re: Leaked Walmart memo reveals competitive threats

#56

Post by handrous »

zippergz wrote: post #41
HideousKojima wrote: post #3

Earlier quoted context omitted.

>They could likely address this by having a second more upscale brand. That's kinda what Sam's Club is, though Sam's is competing against Costco

Sam's is more upscale than Wal-Mart, but in my experience it is very much the "Wal-Mart of warehouse stores" in that it feels less nice than Costco in the same area. I'm sure it varies, that's just based on the ones I've been to.

Yeah, maybe it varies, but the local Sam's has gone way downhill over the last couple decades (I don't think income-demographics have changed much in the area over the same time-span, which makes that really odd) along with the three nearest Wal-Marts. Sam's is now firmly in the same relation to CostCo as Wal-Mart is to Target: basically the same thing, except everything about it is anywhere from a little to a lot worse (except, sometimes, the prices)

Re: Leaked Walmart memo reveals competitive threats

#57

Post by cptskippy »

mc32 wrote: post #2

I think Wal*Mart has an image problem. I’ve gone into their stores. Their stock assortment isn’t bad compared to the competition. In fact, aside from Whole Foods on the organic/bio side of things, they measure up very well and better compared to their competition. They are more of a hypermart where you can do one stop shopping ala Carrefour. The issues I see are: very drab color palette. Working class shoppers. Sure,…

> I think Wal*Mart has an image problem.

If you know their history then you understand how they got where they are.

Walmart grew in the 80s and 90s by planting itself just outside the city limits of small towns across America. They attracted the towns people with low prices and jobs. Their presence eventually shutdown every competing small business in those towns and the former purveyors of those businesses often wound up working at Walmart. Businesses that didn't directly compete often setup shop inside the Walmart leasing space from them. That is until Walmart started partnering up with larger chains and pushing those small businesses out.

At the same time Walmart was strangling small businesses in small town America, they were also putting the squeeze on suppliers. They were demanding custom products at lower prices from companies who were forced to outsource to other countries in order to meet Walmart's demands. Well known American brands like Huffy went from being proudly made in America to just being stickers slapped on products coming off the boat from China.

If you drove across the US in the 90s you'd run through empty ghost towns and as soon as you'd hit the "Now leaving..." sign for the town there'd be a Walmart Supercenter with a parking lot full of vehicles. Walmart destroyed small town America by draining towns of tax revenues and running small businesses under.

Through all of this Walmart proudly displayed Made in the USA or some other patriotic bullshit on the outside of their stores.

Yeah Walmart has an image problem, and there isn't anything they can do about it in my opinion.

Re: Leaked Walmart memo reveals competitive threats

#58

Post by hogFeast »

542354234235 wrote: post #54
hogFeast wrote: post #27

This kind of thinking is why grocery chains have struggled despite having the deck stacked totally in their favour. Online retail, much like offline retail, is about physical infrastructure. You still need warehouses with all the product, you still need fulfilment, all online changes is the balance of those factors. The core assets don't change. I can see how they are losing on branding but losing to Instacart tells…

> Online retail, much like offline retail, is about physical infrastructure. You still need warehouses with all the product, you still need fulfilment, all online changes is the balance of those factors. The core assets don't change. Which is why it is so weird when offline entities adding online lose out over and over to online only. They already have most of the infrastructure and their infrastructure is being paid…

Ikea is the example I often cite.

I am in the UK. Many of their locations are adjacent to motorways, they literally have a warehouse in the store, and all they need to add is a fulfilment network (which, btw, they already have just not large enough to meet demand). Admittedly, the stuff they carry is pretty heavy/expensive...but they are 99% of the way there.

Instead, you go on their website, a lot of the stuff on there doesn't work properly, and delivery times are a month plus. It is deliberate.

Wayfair is dropshipping stuff from China, and managing to compete with them...how? It makes no sense. Ikea have a position that no competitor could actually replicate without losing billions of pounds, and they are getting beaten by a company which doesn't manufacture goods, owns one or two warehouses, and doesn't fulfil orders...how? Literally, Wayfair just have a bunch of websites (now consolidated) with good SEO...and Ikea are just handing them market share.

And yes, "executive profit" is the key point. Executive comp is set by comp committees who have no clue, and benchmark off whatever they the company is already doing/last year's numbers. Why do execs care if the company blows up in five years through malinvestment? They will have cashed out their options by then and will be lighting their cigars with fifty pound notes. Imo, executive comp structure is 95% to do with why this has happened (in my experience, exec comp in physical retail is structured very poorly across the board, it incentivizes poor ROIC growth).

Re: Leaked Walmart memo reveals competitive threats

#59

Post by pengaru »

throwaway0a5e wrote: post #55
pengaru wrote: post #34

Earlier quoted context omitted.

Most of what you're observing is simply a reflection of the area demographics. It's similar to visiting a small town DMV. Your description of gambling machines reminds me of my last visit back home in IL, after they legalized gambling. It's very jarring to walk past locals glued to video slot machines at 9AM in a gas station. It's depressing as hell, I'm sure the walmarts have cashed in on the action too but I didn't…

I don't know why this is downvoted and I don't know why I didn't think of this comparison. I've lived in five different states and been to Walmarts and flipped cars and the variance is EXACTLY like variance in DMVs in both QoS, clientele/employee demographics.

Right, the DMV has a monopoly on a service most adults require. There are competitors for simple services like registration renewal @ AAA, but that's less available in smaller communities. So when you go to a DMV somewhere there's only one DMV serving the region, it's a pretty good cross-section of local society.

Another interesting window in this vein is the local courthouse. The smaller towns don't separate out traffic violations from everything else, it's all on display handled in one room. You can get a sense of what's going on and the type of people in a given small town rather quickly this way.

When there's just one grocer serving a given area, it's effectively the same situation. But when competition eventually arrives, I think they tend to quickly divide along class boundaries.

Around here there's only one grocery store in my local town, and as a result it's actually pretty decent. The exact same chain has a very similar store in a significantly larger town ~25 miles away, where there's a competing upper-class grocer in the adjacent lot. The effect is devastating on the mediocre chain. Customers are treated poorly, the place is a filthy mess, cashiers aren't even trusted enough to manually enter prices when a barcode won't scan. The contrast is shocking, just next door in the higher end grocer none of these problems are experienced, but the prices are slightly higher.

Re: Leaked Walmart memo reveals competitive threats

#60

Post by edgyquant »

handrous wrote: post #12
mc32 wrote: post #2

I think Wal*Mart has an image problem. I’ve gone into their stores. Their stock assortment isn’t bad compared to the competition. In fact, aside from Whole Foods on the organic/bio side of things, they measure up very well and better compared to their competition. They are more of a hypermart where you can do one stop shopping ala Carrefour. The issues I see are: very drab color palette. Working class shoppers. Sure,…

Observations about the nearest Wal-Mart: 1) All the employees look sad, all he time. 2) They've obviously carefully tuned their check out staffing so that the lines are always long. This is such a constant that it has to be intentional, and they're doing a good job of it. 3) Sometimes they attempt to check receipts at exit. I don't get that at any other non-membership store. 4) All the shoppers look sad. 5) It's the…

#3 really irks me, because they don’t check everyone’s receipts. I was stopped and asked for a receipt two days ago for a gallon of milk I had in the cart because it “wasn’t in a bag” while other people walked past.

I can understand e.g. when I buy a TV, but a gallon of milk is ridiculous and profiling.

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