Walmart as well as other stores have begun to feel the astronomical effects e-commerce could ultimately have on the way consumers purchase goods. Walmart itself is projected to feel a 12% decrease in profits due mainly to e-commerce and a few other factors.
With this being said, Walmart has plans to close a total of 269 stores nationwide or 1% of their annual sales with 154 closing in the US. While there has been larger numbers of stores close internationally, this is one of the first times we will see a large number of Walmart stores, superstores, and express stores closing domestically on Walmart's home turf. The closings will eliminate 16,000 jobs resulting in 10,000 being from the US alone.
Looking forward, Walmart is looking to invest more heavily in the e-commerce business, invest more globally instead of heavily domestic, and also to give better wages to their employees in order to spur sales growth. Walmart is also working to plan where to locate their establishments more strategically in this reconstructive phase in order to better position themselves for the future and make them aesthetically more pleasing to the customer.
Do you think this is all too little too late for Walmart? Do you agree with an investor who said, "this is not enough" and Walmart should invest more heavily in order to fix the problems the company has surrounding it and the workers who work there? Do you think an e-commerce approach would work for a grocery superstore?
http://www.wsj.com/articles/wal-mart-to-close-269-stores-globally-1452868122
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ReplyDeleteI think it is a risky move for Wal-Mart to focus more on e-commerce. Wal-Mart is known as the one-stop-shop where consumers can get basically anything they need for a very low price. I think having that convenience factor for Wal-Mart is what sets the apart from many other stores. However, there are so many retailers that I believe are, and will continue to do, a better job in the e-commerce space. A prime example is Amazon.com. They are the one-stop-shop who have focused themselves exclusively in e-commerce, offer millions of items, and is even a place where many get their groceries now. I think it is a lost cause for Wal-Mart to focus more in the e-commerce space with there being so many giants such as Amazon who already has presence and are doing a much better job than Wal-Mart will ever be capable of doing.
ReplyDeleteIn my opinion, it is a wise decision for Wal-Mart to shut down some of their physical stores. First, it could save more unnecessary cost for Wal-Mart so that it could be possible for Wal-Mart to provide a lower price for consumers. Second, as the development of internet, the convenience of on-line shopping will change more people's shopping habits in the future, which means that on-line shopping will be the main stream. In order to seize more market share in the field of grocery stores, putting more focus on e-commerce as early as possible is a strategic decision.
ReplyDeleteEven though there are so many giants who have already taken a large portion of e-commerce market share, the world-wide influence of Wal-Mart's brand name still can help it to march e-commerce. Besides, a later participation could be a cause of being kicked out of not only e-commerce but also grocery industries.
I think it is a good idea for Walmart to reduce the amount of stores that it has is a good idea in order to better tap into their stores being aesthetically and to experiment with the e-commerce marketplace. Up until now there has not been a grocery store that has been able to tap fully into this market. I think a way that Walmart could continue to do so would be to partner with one of the companies who will buy and deliver the groceries for you. The orders could be bought online and then delivered by Walmart drivers to your house without ever having to leave the comfort of your own home. By doing so less cashiers would need to be employed which would free up more workers to fill the orders that have been placed. Regardless of the process Walmart decides to take, I think that the e-commerce market is one Walmart must target if it hopes to continue to be the industry leader that it is. The sooner they are able to tap into this the better it would be.
ReplyDeleteWalmart has saturated the superstore market. With a growing e-commerce market it is apparent that the transition could not only cut costs, but also help them focus on the newer growing market.
ReplyDeleteWalmart has saturated the superstore market. With a growing e-commerce market it is apparent that the transition could not only cut costs, but also help them focus on the newer growing market.
ReplyDeleteThis is an interesting article and actually relates to my blog post this section (it concerned Walmart's declining profits due to an increase in the minimum wage). In the end, I think it might be a better idea for the company to regroup and refocus themselves by closing some stores after they have clearly oversaturated the market in recent years. The competition between Walmart and Target and other "super" stores and even grocery stores has become increasingly high and it seems like Walmart may not be the giant that it used to be. If the company can tap into the online market where people can shop from the comfort of their homes, then they may be more willing to purchase items and have them shipped directly (similarly to other companies like amazon and overstock etc).
ReplyDeletePretty insane for a powerhouse store like Walmart to close 269 stores nationwide, but with the economy nowadays, its hard to guess what will happen in the future. I think it is wise for Walmart to invest in e-commerce, because I think that people are not going to stores as much as in the past.
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