On Point: The fight is not over

Walmart may be down, but do not count the retailing giant out.

By Tom Weir

Nothing like hard times to bring a high-flyer down to earth. After two years of declining same-store sales under its namesake banner, Walmart this summer reversed a decade-long policy of hoarding its shopper data and agreed to resume sharing with The Nielsen Co. and SymphonyIRI Group.

When the giant retailer stopped disclosing its POS numbers about 10 years ago, it cited a desire to control which outside parties could see them. That threw a monkey wrench into the sales tracking business, with Nielsen, SymphonyIRI (then called Information Resources, Inc.) and others being forced to note on their reports that the numbers did not include Walmart’s sales and trying to extrapolate from shopper panel data and other sources to get a better idea of the full picture.

It also made the job harder for marketers, economists, Wall Street analysts, consultants and others who relied on those measurements. However, Walmart felt it was giving more value than it got, so it stopped sharing and everyone else had to adjust. At the time, the decision seemed to work well for Walmart, which then was still frightening almost everyone in mainstream retail.

Now the company is less fearsome, perhaps even a bit needy. An internal memo obtained by Bloomberg News said Walmart stores open for at least a year had 82.8 million, or 2.6%, fewer customer visits in the first five months of the company’s current fiscal year. Morgan Stanley analyst Mark Wiltamuth issued a report saying many consumers think Walmart no longer has the lowest prices. The retailer’s recent TV advertising campaign featuring employees shouting that any competitor’s price would be matched was an indication that it was aware of the situation. In addition, the long economic downturn and high unemployment have been hitting Walmart’s customer base especially hard.

Also, the company is less of a leader in customer insights than it once was. A number of forward-looking retailers have been sharpening their skills in that area over the last decade, and some may have surpassed Walmart by now. Cindy Davis, head of Walmart’s new global customer insights team formed in February, may have hinted at that in the announcement of the partnership with Nielsen. “We plan to share our point-of-sale information to help us identify category growth opportunities sooner and collaborate with our manufacturer partners to develop more impactful customer-driven programs going forward,” she said.

When the new Customer Advantage platform with SymphonyIRI was introduced, Davis said it “identifies and sizes opportunities among shopper segments and categories that will better enable Walmart and its supplier partners to grow their business through a deeper understanding of our customers.”

Walmart definitely sounds like a company that does not want to go it alone anymore. Some retailers may see this as a sign of weakness and conclude that they are finally ahead in the long battle with their giant nemesis.

Another interpretation is that Walmart is a company with the strength to identify its own competitive shortcomings and act boldly to correct them. Instead of marking the end of Walmart’s dominance of the market, it could be the beginning of a resurgence that flattens any competitor who becomes complacent.

Tom Weir can be reached at tom@taweir.cnc.net.

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