3 Ways Wal-Mart Is Moving Forward

Where Wal-Mart is today

• Shares are trading near 52-week lows. • Retailers like Amazon.com and Costco

Wholesale continue to threaten the retail leader and take market share.

• Same-store sales have turned slightly positive after 6 straight quarters of flat or declining comps into last fall.

A company in transition

The man in charge - CEO Doug McMillon

• Took the helm in February 2014.

• Inherited a company struggling to find new growth areas and adapt to challenges.

• Has implemented several surprising changes.

Driving e-commerce gains

McMillon has made e-commerce a major priority for the company.

This year the company has stepped up its investment in its online platform, spending $1.2 to $1.5 billion on e-commerce and digitial initatives, while curtailing store growth.

Driving e-commerce gains

Opportunity is huge

● Industrywide, domestic e-commerce sales are expected to reach as much as $350 billion this year, growing 15% annually.

● Global e-commerce sales at Wal-Mart increased 17% in the first quarter.

Driving e-commerce gains

What Wal-Mart is Doing● Opening four new e-commerce distribution

centers this quarter.● Goal is to triple online sales to $35 billion by

2018.● Introducing Shipping Pass - an Amazon Prime

competitor that will give customers free three-day shipping on over a million items for $50 a year.

Adding Neighborhood Markets

Sometimes smaller is better

● Wal-Mart has seen strong growth in its small footprint Neighborhood Market format, which delivered 7.9% comparable sales growth in its last quarter.

Adding Neighborhood Markets

● The smaller stores, which average 42,000 square feet, have helped Wal-Mart penetrate cities and other densely populated areas that aren’t suitable for its Supercenters.

● At the end of 2013, the company had just 407 Neighborhood Markets. By the end of this year, that number is expected to more than double to around 850.

Improving customer service

Complaints are piling up

● Throughout its history, Wal-Mart has staked its reputation on low prices, allowing customer service to at times take a back seat.

● According to a survey by the American Consumer Satisfaction Index, Wal-Mart ranked at the bottom for discount stores and supermarkets.

Improving customer service

How to make it better

● To correct that problem, Wal-Mart has revamped its staffing and compensation model.

● It raised minimum wages for many employees to $9/hour in April and will raise them again next February to $10/hour.

Source: Wal-Mart

Improving customer service

● Other initiatives include adding greeters to welcome customers and thwart shoplifters, raising wages for department managers as well as adding 8,000 of them, and limiting their focus to one or two departments.

● The reorganizations and wage hikes are designed to increase contact with the customer and incentivize employees to clean and restock departments.

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