Walmart’s 'Investment' in Retail

There’s a growing, doom-like feeling about retailing that the store itself, as a place for consumers to visit and conduct purchasing transactions, is fading into insignificance.

The suggestion is that today’s dominant generation is immune to the charms of visual displays, dramatic lighting, merchandising, ease of navigation, informative signage, or even competent service.

Going to the store today is a chore to pick up some commodity or another, at the lowest possible price, only if the consumer hasn’t first determined that Amazon Prime won’t deliver the item quickly enough.

Today’s store holds all the enchantment of a distribution center; as a weaver of dreams and a provider of fantasies, the store is beginning to feel like the tent shows of the 19th Century – a certain romantic place in historical imagination, but serving as much practical need as a telephone book.

This dystopian view is pretty grim for an industry that has, as its reason for being, the brilliance and creativity of reading shoppers’ minds and delivering some joy. What can retail design say about itself if, in the end, it just doesn’t matter anymore?

Well, of course it still matters. And an uplifting example comes this year from the most unlikely of sources: Walmart, the Grinch that destroyed Christmas with its ordinary, utilitarian monster stores. Walmart didn’t sink the idea of going to the store. But it did ruin the notion that shopping could be fun, could be more than just trolling the aisles and loading up a cart.

Well, Walmart has fallen on hard times, too. (Note: this is a half-trillion-dollar operation; “hard times” is a relative term.) More and more people were avoiding the Walmart superstores, and the culprit wasn’t Amazon. It was Walmart itself.

Shoppers let it be known that dirty bathrooms, long checkout lines, poorly signed and stocked shelves and vacant, dour, useless employees weren’t cutting it. They let it be known, not by angry social media outbursts, but simply by staying away. Walmart suffered five straight quarters of same-store sales declines and, in 2015, the first-ever annual drop in revenue.

Walmart might have simply ignored the problems with its frequent Sam-knows-best contempt for the consumer – and everyone else. Or taken action. To its credit, it chose action – starting with paying employees more, treating them better and training them better.

Better-trained, better-paid employees proved more likely to keep stores looking better, smile at customers and answer questions, devote some time to making displays look better and keeping them looking better. And more highly qualified people might begin to view a Walmart job as something more than a last-ditch option.

The executives who hatched this ingenious strategy called it “the investment.” So what was the return on investment? Probably too early to tell. But one hopes, whatever the return, Walmart begins to look at the new strategy less as an investment and more as a smart way for retailers to treat customers.

Like retail once used to be.

As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20 years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.