Wednesday, April 3, 2013

First cracks in Walmart's armor?

There's a few articles out there about how Walmart is falling down on the job.  Apparently they've cut 100's of thousands of employees lately, while adding hundreds of stores.

So the complaints by customers is that there isn't merchandise at the store or product on the shelves, because there aren't enough employees to unpack and display the new arrivals.

The article is framed with the idea that Walmart customer service sucks.  All such articles seem mostly concerned about "customer service."

O.K.  That's a problem.  But it's a by-product of the real problem.  Not hiring enough employees and not paying them enough to retain them is the real problem. 

The Real Real problem is -- if you don't have products on the shelves to sell, you can't sell them. 

When we had a store in the Mountain View Mall, we were three stores down from Kmart.  You could almost see that store going downhill day by day.  Empty shelves is what I remembered -- it shocked me. 

By that time I was disabused of my notion that giant corporations are efficient.  They are dumb and slow, but oh so big.  A tree can outsmart you if it falls on you.  Then you are as dumb as a stump and just as dead.

They kill you with volume and price.  If service really mattered to people, these huge stores would be the ones in trouble, not the small independents.  Real service is having the product, conveniently displayed, with clear pricing, and it's gravy if you have someone behind the counter who actually knows something.

As you know, I'm a big fan of inventory.  That's what the mass market has always had over us -- that and price.  If they start falling down on that, they're in trouble.

But here's the thing -- inventory is limitless on the web, and price is even cheaper. 

So you've got the small specialty shops on one side, and the Amazon's of the world on the other, and the mass market in-between.

Things change, that's for sure. 

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