Go Lean Commentary
Wal-Mart, the Big-Box store, is now doing Next Day deliveries.
This is earth-shattering news! See the VIDEO here and the full story in the Appendix below.
VIDEO – Wal-Mart rolls out free next-day delivery service – https://finance.yahoo.com/video/walmart-rolls-free-next-day-132555700.html
The whole business model of Big-Box was bringing the customer to one destination, where they can find so many things in one place. Now, instead of the customer coming to the Big-Box, Wal-Mart – America’s largest employer – is coming to the customer.
The retail landscape is undergoing change; this is the actuality of the Retail Apocalypse as we have described in this previous commentary:
The underlying issue with the Retail Apocalypse is not the demand for retail products, it is the supply. Consumers are still demanding and consuming fashion and commodities, just not at shopping malls; e-Commerce is “all the rage”.
In a David versus Goliath analogy, Wal-Mart would be Goliath. (Amazon is equally giant-sized as an e-Commerce offering).
The Empire Strikes Back
The Retail Apocalypse change in this case is the Internet or e-Commerce (Electronic Commerce). But in the Appendix article, we see that the biggest brick-and-mortar retailer – the Empire: Wal-Mart – is striking back. They are using their Big-Box reality to foster an advantage for their business operations. This could be good for consumer choice. It is definitely good for modeling and learning-lessons for the Caribbean.
The topic of Big-Box is familiar for the movement behind the book Go Lean…Caribbean; it includes this excerpt (Page 201):
| The Bottom Line on Big-Box Stores
A big-box store (also supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain. The term sometimes also refers, by extension, to the company that operates the store. The store may sell general dry goods in which case it is a department store, or may be limited to a particular specialty (such establishments are often called “category killers”) or may also sell groceries. Typical architectural characteristics include the following:
Commercially, big-box stores can be broken down into two categories: general merchandise (examples include Wal-Mart and Target), and specialty stores (such as Menards, Barnes and Noble, or Best Buy) which specialize in goods within a specific range, such as hardware, books, or electronics. In recent years, many traditional retailers – such as Tesco and Praktiker – have opened stores in the big-box-store format in an effort to compete with big-box chains, which are expanding globally. Some worry about the economic impact of big-box retailers on established downtown merchants or the sprawl-inducing impacts on character of such developments, as these stores are associated with heavy traffic near the stores. |
This Big-Box retail concept is not just limited to the US mainland. Many of the Big-Box players have locations in many other countries …
… including the Caribbean. Wal-Mart’s Caribbean locations are only in Puerto Rico:
Source: https://corporate.walmart.com/our-story/our-locations#/united-states/puerto-rico
The business model prescribed in the Go Lean book envisions more of such installments in the Self-Governing Entities spread throughout the region; the book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), for the elevation of Caribbean economic engines. The book states (Page 234):
Self-Governing Entities
The CU will promote and administer all self-governing entities (SGE) throughout the region. This refers to scientific labs, industrial parks, commercial campuses, experimental hospitals, and even foreign bases. These facilities will not be subject of the laws of the local states of their address, [but] rather CU [federal regulations tied to different standards:] international, foreign sovereignty, or maritime laws; but depend on the local infrastructure to provide basic needs. Thereby creating jobs and economic activity.
…Some mixed-use urban initiatives envisioned by the CU include: Main Street / Downtown Developments …
The Go Lean book also provides for effective strategies, tactics and implementations so as to be better in competition with Big-Box stores. See this excerpt here (Page 201):
Big-Box Competition: Cooperatives
The strategy of Big-Box stores is volume discounts. They purchase merchandise in bigger volumes that thereby garner bigger discounts from manufacturers. To compete against this reality, Main Street businesses need the benefits of aggregation and sharing their burdens with aligned firms. The formal Cooperatives movement allows such benefits.Big-Box Competition: e-Commerce
Electronic commerce holds the promise of “leveling the playing field” so that small merchants can compete against larger merchants. To facilitate e-Commerce, purchased merchandise must get to their destinations as efficiently as possible. The CU’s implementation of the Caribbean Postal Union allows for better logistics for package delivery.
The Go Lean book (Page 57) has identified these trends – Globalization and Technology – as Agents of Change but it can frankly be described as Agents of Disruption or Agents of Destruction. For downtown merchants, Big-Box stores are disrupting their business models. For Big-Box merchants, e-Commerce is disrupting their business models. No matter your station on the retail industry vertical, there will always be competition and Agents of Disruption to contend with.
The lesson-learned for the planners for a new Caribbean is to always be On Guard for competition and to respond accordingly, with the best-practices for strategies, tactics and implementations. This is the Way Forward for retail operations in the Caribbean region. The roadmap describes how an optimized postal operation can be leveraged across 42 million people in the 30 Caribbean member-states, then we would be able to better deploy our e-Commerce offerings. The book states (Page 198):
Regional Postal Services – CPU
The CU will assume the responsibility for mail services in the region; (all member-state postal employees will become federal civil servants). The embrace of the Caribbean Postal Union allows for parcel mail to be optimally shipped and delivered throughout the region, with Customs considerations in place. The CPU will therefore ensure the fulfillment side of e-commerce, even allowing for computer applications for printing electronic stamps/barcodes for value savings.
This theme – fostering an e-Commerce eco-system – aligns with previous blog-commentaries; see these Amazon lessons here:
| http://www.goleancaribbean.com/blog/?p=12291 | Amazon’s e-Commerce – The Retailers’ Enemy |
| http://www.goleancaribbean.com/blog/?p=1416 | Amazon’s Smartphone model for e-Commerce |
We need to be On Guard for other disruptions as well. The Caribbean is losing in competition with the rest of the world. We continue to lose our young people to foreign shores. One report has listed the abandonment rate at 70 percent of the tertiary-educated population; many times, the expatriates leave seeking jobs and other economic opportunities. This is not a sustainable reality for us. We must do better.
Consider this Wal-Mart story and the lessons we glean; with more e-Commerce and delivery offerings, we can create jobs and grow our economy right here at home. This will help us make our homeland a better place to live, work and play. 🙂
About the Book
The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), for the elevation of Caribbean society – for all member-states. This CU/Go Lean roadmap has these 3 prime directives:
- Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
- Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
- Improve Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.
The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society.
Download the free e-Book of Go Lean … Caribbean – now!
Who We Are
The movement behind the Go Lean book – a non-partisan, apolitical, religiously-neutral Community Development Foundation chartered for the purpose of empowering and re-booting economic engines – stresses that reforming and transforming the Caribbean societal engines must be a regional pursuit. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 12 – 13):
xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.
xv. Whereas the business of the Federation and the commercial interest in the region cannot prosper without an efficient facilitation of postal services, the Caribbean Union must allow for the integration of the existing mail operations of the governments of the member-states into a consolidated Caribbean Postal Union, allowing for the adoption of best practices and technical advances to deliver foreign/domestic mail in the region.
xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.
Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.
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Appendix – Walmart launches free next-day delivery with no membership fee
By: Julia La Roche, Yahoo Reporter
Walmart (WMT) just upped the stakes in the shipping wars with its latest offering — free next-day delivery with no membership fee.
Shoppers on Walmart.com can access NextDay delivery via a stand-alone function where they can browse up to 220,000 of the most commonly purchased items, everything from diapers to cleaning products to toys and electronics.
“Think of things like Bounty paper towels, some of our Great Value paper lunch plates, flushable wipes, diapers, dog food. Everything from that to a Little Tikes toy set,” Janey Whiteside, Walmart’s chief customer officer, told Yahoo Finance. “It’s a combination of items that you forget that you need and you need them in a rush. If I’m a busy mom and I look at the diary and realize that tomorrow I have a kid’s birthday party and I’ve forgotten to buy a present, there are things in there for that. There are consumable items. You’ll see a range of things that we know the customers are looking for.”
Orders of $35 and up are eligible for NextDay delivery, and the offering will debut in Phoenix and Las Vegas before expanding to Southern California.
“It will roll out gradually over the coming months, with a plan to reach approximately 75% of the U.S. population this year, which includes 40 of the top 50 major U.S. metro areas,” Marc Lore, CEO of Walmart e-Commerce U.S., wrote in a blog post.
In the blog, Lore said the service “isn’t just great for customers, it also makes good business sense.”
“Contrary to what you might think, it will cost us less – not more – to deliver orders the next day,” he wrote.
The reason it won’t cost as much is that the items will ship from one fulfillment center nearest the customer, he explained.
“This means the order ships in one box, or as few as possible, and it travels a shorter distance via inexpensive ground shipping. That’s in contrast to online orders that come in multiple boxes from multiple locations, which can be quite costly,” Lore wrote.
That said, some are still skeptical about the expense associated with the new offering.
“My reaction is that it’s awesome for customers. For you and me, it’s great. We get more options, and it’s going to be faster to get anything we order,” Sucharita Kodali, a retail analyst at Forrester, told Yahoo Finance, before adding, “Is it great in the long-term from an expense standpoint? Is this the most efficient way? I think that question hasn’t been answered.”
Walmart’s NextDay lets customers shop up to 220,000 of the items most frequently purchased items, ranging from diapers and laundry detergent to toys and electronics.
Kodali doesn’t think shoppers are likely to turn down free, expedited shipping.
“The shopper doesn’t value it for what it is — an incredibly expensive endeavor,” Kodali said.
To Walmart’s credit, though, she said the retailer is approaching it in a “smart way,” by launching in a couple of cities with a finite number of eligible items and a threshold of $35.
“[They’re] trying not to lose their shirt while doing it,” she said, later adding, “All of those are incredibly important to making it successful.”
King Kong v. Godzilla
Walmart’s move is helpful in the “King Kong versus Godzilla fight” Walmart is in with Amazon, Kodali added.
In late April, Amazon (AMZN) said it would spend $800 million in the second quarter to speed up its delivery to one day from two for all its Amazon Prime members. Presently, the e-commerce giant offers free two-day shipping and same-day delivery on $35 orders for eligible items in specific areas. A Prime membership costs $119 per year.
Shortly after the Amazon news broke, Walmart hinted at its future plans around delivery.
“Both retailers are climbing up the next rung of immediacy. It’s another form of convenience,” Laura Kennedy, a vice president at Kantar Consulting, said. “Not every shopper is going to need it or think it’s the most convenient option.”
Forrester’s Kodali sees Walmart’s move as more about maintaining wallet-share and not surrendering that opportunity to Amazon.
“I think that’s really the crux of what this is,” she said.
What’s more, there’s also the potential for Walmart to attract a different shopper from that core shopper.
Kodali believes that Walmart’s online grocery pickup and delivery, especially with the convenience and broad organic offering, has already broadened the retailer’s appeal. The new NextDay offering is billed as a “complement” to Walmart’s same-day grocery delivery, which is expected to reach 1,600 stores by year-end.
“This has the ability to broaden the appeal. It’s all about incremental new customers,” Kodali said.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.
Source: Yahoo Finance – May 14, 2019; retrieved May 22, 2019 from: https://finance.yahoo.com/news/walmart-free-next-day-delivery-040200955.html?.tsrc=notification-brknews