Monday, August 22, 2011

Next-Generation Wal-Mart =

This morning, I happened to read some of the technology developments happening at Wal-mart. Yes, you read it right!. Walmart has roped-in experts from Silicon valley to explore the technology improvements that can be incorporated at Walmart. Walmart's response to eCommerce has been lukewarm over the past decade or so. It has always marketed itself around stores, low-prices, communities and people. So, Investing in an online B2C experience could cannibalize its very own strengths and core business model!. That doesn't mean that Walmart has shunned itself away from Technology. In fact, it has been a great adapter of technologies in the space of supply chain integration, logistics and distribution as those technologies help the company to become lot more cost-efficient and productive!.

Of late, the company is also extending its value chain acquiring dollar stores to sell products at even more lower prices! And started a company-wide initiative called Project Impact that would redesign their stores to make them much more efficient and customer friendly!. The company CEO has also unveiled the strategy for Next Generation Walmart. Interestingly, the strategy puts more emphasis on culture, society, people/communities, stores & prices and less on Technology. The strategy to some extent talks about eCommerce, but only treated as a strategic necessity than a competitive advantage.

The WalmartLbas has been experimenting with Social Networks, Mobility, Mobile Payments and Online-Store integration. One of the interesting aspects that I observe in their experiments is to use Technology to influence the Stores' inventory so that it can serve better to its own community. (For example, Fishing may be active in one community whereas certain kind of music may be a buzz in another community. The stores can stock up those items whose demand may rise based on the trends). This way, Technology is used to predict what can sell in future based on current trends than on the past data. And I find this idea counter-intuitive as technology gets quite frequenly applied at influencing the buyer than the seller.

Considering its core strengths, Walmart may never attempt to become a No.1 Online sales mart, but it would continue to improve the online experience so that it has strong synergies with its brick-and-mortar stores.

On the contrary, has been steadily diversifying itself from a media store (books, audio, video and apps) to a General store. It has extended its merchandise to electronics, consumer goods, toys and others. In that sense, is pretty much becoming the Wal-mart on the Web. The company also positions itself as a Technology provider by offering cloud computing services and ecommerce services.

Now, the question is, Would challenge Walmart in future, in terms of overall business?. It is already challenging quite a lot from Online Sales perspective. With the current rate of growth, a firm even claims that could potentially overtake entire Walmart (not just in next 10 years. While in short term, this may sound naive, but the long term possiblity cannot be over-ruled!. And remember Amazon's history shows that it was not afraid of re-inventing itself by coming up with new business models fueled by Technology and Creativity!.