Flooding

Why not start off the year scorching some earth, and spend the rest of it watching what flourishes in its place?

In a little over a week’s time, Walmart announced job cuts at Sam’s and the appointment of Shopper Events, a third party marketing company that will guide Sam's new "Tastes and Tips" event and demo program, a round of sweeping organizational changes, the formation of a “global.com organization,” and a new global sourcing strategy which includes a sourcing alliance with Li & Fung (interestingly, the move that has analysts and investors all aflutter).  This sort of deluge isn’t for the faint of heart and fortunately, that no longer describes Walmart.  They’ve gotten mighty comfortable running offense after weathering a rough patch of defensive plays (a flaming baton that Target unwittingly caught and now must extinguish).

To me, this flooding approach is brilliant because, let's face it, pundits and critics can be a bit lazy.  Give them one piece of meat and they’ll gnaw it to death; several plates full of it delivered one after the other and, well . . . you get the picture. Drawing larger conclusions is complicated so the stories get reported rather than dissected (did I say brilliant?)

Of course, that means that my picks and probes are out . . . not to second guess any of the moves (why?) or to delineate the details (you can hit the links for that) but instead, to look at how this will influence other retailers, and how it should inform supplier strategy.  Treating Walmart as an anomaly rather than a bellwether has brought woe to many so ignore, simplify or dismiss their moves at your peril.

One thread runs through all of the announcements (well, more than one but I’ll focus on the one for now) and that is, every retailer out there is trying to master cross-category and cross-functional.

Cross-category and cross-functional – On the Sam’s front, Shopper Events, a marketing company based here that already runs demos for Walmart, was chosen to turn demos into a “competitive advantage” and to “take this (demo) member experience to the next level” according to Brian Cornell, president and chief executive of Sam’s.  The big takeaway here is that the vision involves coordinating the demo program between food and beverage, personal wellness and electronics.  Sam’s is determined to create a unified and compelling beyond-the-hairnets demo experience in multiple categories, so much so that they are entrusting a third party to coordinate and execute that larger vision.

Setting the stage for the departmental announcements to  come, Mike Duke, Walmart’s ceo led by describing his pride watching “our purpose of helping people save money so they can live better come together in one efficient, smooth operation” during his holiday 2009 store visits.  He went on to tee up individual announcements from Eduardo Castro Wright, Bill Simon and John Fleming; the company’s vice chairman, EVP and COO, and EVP and CMO respectively.  This wasn’t a lopsided “We’re cleaning up our act in (pick your area)” pronouncement; instead, Walmart positioned the moves as chapters in a larger narrative at a time when many of its competitors are plugging holes.  As a result, the whole thing came off as a synergistic symphony with all of the players united in purpose and working toward a larger, pre-orchestrated plan.