You are on page 1of 10

TRADITIONAL STORE TO ONLINE DISTRIBUTION

Submitted to: Prof Sathya Priya

Submitted by: Sneha Kundlani Sneh Raj Sumit Ginoriya Payal Bhattacharya Rohit Nair Reshma Khan Section -N

1|Page

INDEX
Title Page No. Company profile 3 Walmart: from traditional to online reatailing... 6 Walmarts strategy of adapting the change 7 Success so far and steps ahead.. 9 . References...................................................................................... 10

2|Page

Company Profile

al-Marts history is more than just the stores we've built, the partnerships they've made and the customers they've served. So much of their history is in the details. See how Walmart began, how they grew and how their leadership has changed the retail industry.

1960s:
i. Retail Revolution: Sam Walton's strategy was built on an unshakeable foundation, The Lowest Prices Anytime, Anywhere. ii. 1962: On July 2, 1962, Sam Walton opened the first Walmart store in Rogers, Ark. iii. 1967: The Walton family owned 24 stores, ringing up $12.7 million in sales. iv. 1969: The Company officially incorporated as Wal-Mart Stores, Inc.

1970s:
i. Walmart Goes National. ii. 1970: Walmart became a publicly traded company. The first stock was sold at $16.50 per share. iii. 1971: The first distribution center and Home Office opened in Bentonville, Ark. iv. 1972: Walmart was listed on the New York Stock Exchange (WMT). With 51 stores, Walmart recorded sales of $78 million. v. 1975: Inspired by a visit to a Korean manufacturing facility, Sam Walton introduced the Walmart cheer. vi. 1979: The Walmart Foundation was established.

1980s:
i. Decade of Firsts: In the 1980s, the first Sam's Club opened, serving small businesses and individuals, and the first Walmart Supercenter opened, combining a supermarket with general merchandise. ii. 1980: Walmart reached $1 billion in annual sales, faster than any other company at that time. Walmart had 276 stores and employed 21,000 associates. iii. 1983: The first Sams Club opened in Midwest City, Okla. Walmart replaced cash registers with computerized point-of-sale systems, enabling fast and accurate checkout. iv. 1984: Sam Walton did the hula on Wall Street, making good on a promise to associates after the company achieved a pre-tax profit of 8% for the previous fiscal year.

3|Page

v. 1987: The Company installed the largest private satellite communication system in the U.S., linking the company's operations through voice, data and video communication. vi. 1988: The first Walmart Supercenter opened in Washington, Mo., combining general merchandise and a full-scale supermarket to provide one-stop shopping convenience. David Glass was named CEO.

1990s:
i. Americas Top Retailer: By 1990, Walmart was the nation's number-one retailer. As the Walmart Supercenter redefined convenience and one-stop shopping, Every Day Low Prices went international. ii. 1991: Through a joint venture with Cifra, a Mexican retail company, Walmart went global, opening a Sams Club in Mexico City. iii. 1992: While receiving the Medal of Freedom, Sam Walton articulated the companys mission of saving people money so they can live better, shortly before passing away at age 74. iv. Rob Walton became chairman of the board. Walmart employed 371,000 associates in 1,928 stores and clubs. v. 1993: Walmart celebrated its first $1 billion sales week. vi. 1994: Walmart expanded into Canada with the purchase of 122 Woolco stores. vii. 1996: Walmart opened its first stores in China. viii. 1997: The company celebrated its first $100 billion sales year. ix. 1998: The Neighborhood Market format was introduced with three stores in Arkansas. x. 1999: Walmart entered the United Kingdom with the acquisition of ASDA.

2000s:
i. New Millennium: Walmart entered the new millennium dedicated to offering customers a seamless shopping experience, whether they are online, in a store or on a mobile device. ii. 2000: H. Lee Scott, Jr. succeeded David Glass as CEO. Walmart.com was founded, allowing U.S. customers to shop online. Walmart employed more than 1.1 million associates in 3,989 stores and clubs worldwide. iii. 2002: For the first time, Walmart topped the Fortune 500 ranking of America's largest companies. Walmart entered the Japanese market through its investment in Seiyu. iv. 2005: Walmart took a leading role in disaster relief, contributing $18 million and 2,450 truckloads of supplies to victims of hurricanes Katrina and Rita. v. 2006: Walmart introduced its $4 generic-drug prescription program.

4|Page

vi. 2007: Walmart.com launched Site to Store service, enabling customers to make a purchase online and pick up merchandise in stores. vii. 2010: Bharti Walmart, a joint venture, opened its first store in India. Walmart committed $2 billion through the end of 2015 to help end hunger in the United States. Walmart launched a global commitment to sustainable agriculture, aiming to strengthen local farmers and economies, while providing customers access to affordable, high-quality food. viii. 2011: With the acquisition of MassMart in South Africa, Walmart surpassed 10,000 retail units around the world. The first Walmart Express stores were introduced in Arkansas. Walmart established @walmartlabs, a hub for developing social, mobile and global platforms. ix. 2012: Walmart celebrated 50 years of helping people save money so they can live better. The company employs 2.2 million associates worldwide and serves 200 million customers each week at more than 10,000 stores in 27 countries.

5|Page

Wal-mart: From Traditional To Online Retailing


al-Mart Stores Inc.s (WMT) customers were latecomers to online shopping. Now increasingly theyre trolling for deals at Amazon.com Inc.,(AMZN) putting pressure on Wal-Mart to fix its lagging e-commerce operation.

Five years ago, the worlds largest retail chain didnt have to worry much about the worlds largest online mall. After all, only about a quarter of Wal-Mart customers shopped at Amazon, according to data from the research firm Kantar Retail. Now, half say they do. Thats changing as two trends converge: Wal-Marts traditional customers -- bargain hunters making less than $50,000 a year -- are getting more tech savvy, and less-strapped shoppers who began frequenting Wal-Mart during the recession are now rediscovering Amazon, said Bryan Gildenberg, a Kantar analyst based in Glen Ridge, New Jersey. Amazon has moved from being this unusual niche competitor for Wal-Mart to a force that can reinvent the industry, Gildenberg said in a phone interview. Young people are tech savvy and theyre unemployed, too. The affluent shopper is trading back out of WalMart and Amazon is a bigger part of their life than before. The changing habits of Wal-Marts customers and Amazons growing clout have WalMart executives and e-commerce managers focusing on the Seattle-based giant as never before. Amazon is always in our sights, said Jeremy King, hired in July as chief technology officer of @Walmart Labs, the retailers e-commerce skunk works in Silicon Valley. In the U.S., Amazon is a very big competitor. My biggest issue is playing a catch-up game. Lagging Operations: For years, Wal-Marts online operations have lagged behind those of its brick-and-mortar rivals. In the past decade, Wal-Mart has tried hiring outside firms to develop its Web store and deployed a rotating cast of executives to find a solution. Yet last year online sales amounted to less than 2 percent of revenue, according to Kantar. Meanwhile, Amazon is on the march, successfully moving into merchandise that WalMart traditionally has sold, from diapers to vacuum cleaner bags. In its last fiscal year, Amazon posted 41 percent revenue growth compared with 8 percent at Wal-Mart. Amazon shares have advanced 15 percent in the past 52 weeks, while Bentonville, Arkansas-based Wal-Mart has increased 18 percent. Last year, Wal-Mart was the No. 1 destination for holiday shoppers with 53 percent of consumers shopping there, down from 59 percent in 2009. The percentage of consumers doing holiday shopping at

6|Page

Amazon.com rose to 46 percent from 38 percent in the last three years, according to Kantar research. Shopping Destination: By next year, Amazon, now the No. 2 holiday shopping destination may be No. 1, said Anne Zybowksi, a Kantar analyst. Wal-Mart is going crazy over this, Zybowski said. Wal-Mart is doing a lot with dot-com but they havent figured it out yet. Now Wal-Mart is doubling down. Since May, it has spent more than $300 million acquiring Web-related companies to build the talent base and expertise at @Walmart Labs. They include Kosmix, a social-media firm, and iPhone app creator Small Society. The retailer has hired more than 200 people and is upgrading its Web platform. Internally, Wal-Mart has a new motto, Anytime, Anywhere. Soon it will be the online marketing slogan, Walmart.com U.S. President Joel Anderson said in an interview. Anytime Anywhere: Eventually, Wal-Mart consumers will be able to shop for anything thats available online or in stores, using smartphones or traipsing the aisles. Wal-Mart, like other retailers, aims to use its stores as pickup centers, said Venky Harinarayan, @Walmart Labs senior vice president of global e-commerce, a former Amazon executive who worked at Kosmix. While Amazon has a pricing advantage on some items partly because it charges no sales tax in many states, Wal-Marts same- day, in-store pickup gives the retailer an edge, executives said. Already, online shoppers pick up more than half their purchases at a store, according to Anderson. Price has been a key component of our strategy, but its not the only thing, he said. Next month, Walmart.com is starting Pay With Cash, aimed at the 20 percent of Wal-Mart customers who cant shop online because they dont have bank accounts or credit cards. Using the new program, these core Wal-Mart customer can reserve products online and pay cash at their nearest store. Wal-Mart is reaching out to more affluent customers by piloting WiFi in some stores and by selling more expensive items -- high-end Sony and Samsung televisions, for example -- only online.

Walmarts aggressive strategy for adopting this Change


Walmart has realized that its consumers are going digital and is taking some big steps to overtake Amazon, its biggest online competitor. So Walmart came up with a plan to do ecommerce right. i. Walmart began recruiting top Silicon Valley talent and acquiring start-ups last year. For instance, Walmart acquired Kosmix, a company that specializes in making web design more seamless, for $300 million. That team has been working for over a year to fix Walmart's systems and improve its website. 7|Page

ii.

iii.

iv. v.

Walmart is investing in the "social gifting" market. A year ago, Walmart launched "Shopycat," which makes gift recommendations based on friends' Facebook profiles. The site is now called "Walmart Gifts" and allows customers to log in and get personalized recommendations based on Facebook and Twitter profiles. The retailer got a better search engine. A dozen top engineers took 10 months to build it, and while the company won't discuss sales figures, they said the new system is more user-friendly. "If you search for cotton socks now, you'll actually find them," Manjoo writes. Walmart is trying to lead the charge in same-day shipping. Its at an advantage considering that 96 percent of Americans live within 20 miles of a Walmart. Walmart is investing like crazy in its mobile app. "Walmart imagines that as you go through an average day, you'll remember things you need--milk, bread, a new tennis racquet, a toy truck for your nephew's birthday--and tell the voice-enabled Walmart app. The app will list each item's location inside your local Walmart and include product info; eventually, it will also learn your preferences and offer recommendations. And once you're actually in the store, you'll be able to summon an associate to help you," Manjoo says.

Now that Walmart has decided to start heavily investing in e-commerce, there's little doubt that it can take over the world.

Success so far and steps ahead


For the first time since it began online sales in 2000, Wal-Mart broke out its e-commerce goal: Speaking at the annual analyst meeting, executives said the company targets worldwide online sales of $9 billion by fiscal 2014. Last year, Wal-Mart U.S. had total sales of about $260 billion, including e-commerce, accounting for roughly three-fifths of the company's business. Coming off a strong back-to-school period, Wal-Mart U.S. said it plans to increase its marketing, including featuring commercials on layaway, as well as on ad-matching guarantees and price comparison on a basket of goods against rival retailers. Wal-Mart U.S. also will use Facebook and other social media to drive sales, such as allowing its 22 million Facebook fans to vote on toys they'd like to see "rollbacks," or temporary discounts, on. This week, Wal-Mart said it has begun to test same-day delivery services in some U.S. cities, one of many tactics being used to try to counter competition fromAmazon.com Inc. 8|Page

Wal-Mart U.S.'s comparable sales for the first half have risen 2.4%, as it increased traffic and gained market share, said Bill Simon, head of Wal-Mart U.S. Wal-Mart U.S. last year returned to comparable sales growth following two years of declines, helped by its strategy to broaden product assortment and add back products such as hunting and fishing equipment, and to lower prices. In the U.S., Wal-Mart plans to add around 125 supercenters next fiscal year, at a similar pace to this year, and accelerate the rollout of its smaller-format storesNeighborhood Market and Walmart Expresswith a goal of adding 95 to 115 stores in fiscal 2014, up from an estimated 80 store openings this year and 27 last year. Including about 170 existing Neighborhood Market stores at the start of the year, the company plans to end the fiscal year with more than 240 Neighborhood Markets, which usually measure less than 50,000 square feet in size. It plans to end the year with a total of 12 Walmart Express shops, averaging about 10,000 to 15,000 square feet in size and first opened last year. All told, more than 500 Neighborhood Markets will be open by fiscal year 2016, generating more than $10 billion of sales. There's a good reason behind the expansion: Neighborhood Market's first-half comparable sales were up 5%, double the growth rate of the Wal-Mart U.S. average. Walmart Express, first opened last year, also has exceeded the company expectations. "They give us a competitive advantage," Mr. Simon said, adding the format allows the company to compete effectively against dollar chains, supermarkets and pharmacies.

9|Page

References
http://www.syracuse.com/news/index.ssf/2010/09/walmart_changes_strategy_plan.html http://en.wikipedia.org/wiki/Walmart http://www.fastcompany.com/3002948/walmarts-evolution-big-box-giant-ecommerce-innovator

10 | P a g e