Retail Wire Discussion: Walmart seeks small answers to big sales problem
Walmart's small format push is a multi-dimensional proposition. Alternative formats obviously allow Walmart to penetrate under-served markets that can't support Supercenters, but they are also a critical link in Walmart's digital strategy.
As Gisel Ruiz, Walmart's U.S. EVP and COO pointed out in a recent presentation, rural Walmart Express stores are turning items like bikes and smartphones into best-sellers, even though they aren't available in Express locations. Customers are taking advantage of Walmart's site-to-store capabilities in greater numbers and Walmart is light years ahead of other large-scale retailers in this capability. Walmart is also intentionally maintaining price integrity between formats and online rather than playing games which should engender shopper trust for the long term. Based on my comparisons, Walmart is also doing a great job of optimizing algorithms as its online prices regularly beat Amazon's.
Walmart is in ramp-up mode, building scale, flexing format attributes to suit specific markets and relentlessly refining the supporting logistics. This is a marathon, not a sprint and I wouldn't bet against Walmart's long-term success.