Parsing Wal-Mart’s Web Plan: How Far To Push The Stores

Written by Evan Schuman
January 19th, 2012

Few statements are parsed as aggressively for hidden signals and clues as those from Wal-Mart corporate. And few topics have to be handled more delicately than how aggressively Wal-Mart senior management will push merged-channel strategies on its stores. Therefore, the statement issued Monday (Jan. 16) by Wal-Mart about its new E-Commerce chief and how he is expected to interact with stores is getting a lot of close inspection.

The new site commander—replacing the retiring Eduardo Castro-Wright—is Neil Ashe, whose last official gig was with CBSInteractive.

Wal-Mart has recently been trying to more closely align stores with various online, mobile and social efforts. But like all major chains, brick-and-mortar management resistance is non-trivial. Without sharp changes in compensation (commission, bonus) strategies, store managers are still going to obsess almost exclusively with pushing in-store product.

The idea that store managers should use their environment to actively push social and online services has not been especially popular in Wal-Mart stores.

So it was with great interest that the community intently read and reread the comments from Wal-Mart CEO Mike Duke about Ashe’s marching orders. Are his orders to beef up online directly—so it can market and grow on its own—or has he been given a double-click baseball bat to push store managers to play ball?

Let’s start parsing the CEO’s quotes: “Perhaps most importantly, much of Neil’s professional success has come through close collaboration and shared goals with his peers, a key attribute as we continue to integrate our online businesses across the company and with our physical stores.”

“Close collaboration” and “integrate” “with our physical stores.” Translation: “Store managers, this guy’s lieutenants are going to be getting in your faces.”

“Shared goals.” This is a subtle suggestion that compensation incentive possibilities are now back on the table.

More from the top boss: “We are on track to create the next generation of E-Commerce, combining the latest in online innovations with physical stores to give our customers a unique and seamless shopping experience.” Translation: “New functionality is going to be marketed to customers directly. They will expect it. Know about and use the program—or not—at your own peril. We will be able to track such activity by the store. If you don’t watch those stats carefully, worry not. We’ll have the printouts for you during your next performance review.”

Speaking of messages within news release quotes, Ashe himself sent a message (assuming he wrote the quote, which is certainly not a given). His message was not about E-Commerce, but about the $419 billion chain itself. It was cryptic enough that it’s not clear how much of an impact it will have outside Wal-Mart headquarters locations. Then again, when you’re working for the world’s largest retail chain, an internal-only message is probably quite adequate.

Ashe’s comment: “Walmart is a special company. Growing up in East Tennessee, I have seen first-hand the difference it can make in the lives of its customers.” The point of the comment is that East Tennessee has a substantial rural population and it’s a region that was especially hard hit by major national retail chains abandoning those areas, opting instead to focus on what they believed were more profitable, more densely populated communities.

Wal-Mart’s move into such rural areas—bringing a wide range of items at relatively low costs—helped many neighborhoods that had felt orphaned. Without that background, though, the East Tennessee comment may prove more mystifying than anything else for much of the country. Also, the ambiguity of the comment “the difference it can make in the lives of its customers” is unusual. Why not say “positive difference?” With Wal-Mart, you really don’t want to leave a statement that open-ended.


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