A few days ago I was having an informal chat with one of my clients regarding #Strategy and the role of #Technology in crafting the best strategy for any business going forward.
This conversation reminded me about a book I read years back on the history of Walmart and its founder #SamWalton.
Mr. Sam’s (as he was called) goal was to give great value and great customer service. Leadership through service, he called it. This focus on the customer evolved into a single-minded strategy called:-
#EDLP
Everyday Low Price (also abbreviated as EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping.
Walmart is 56 years old. And they have maintained that strategy to date. Single-mindedly. EDLP and great service. Some timelines are instructive
Walmart’s technology drive to serve the customer
1983 – Walmart replaces cash registers with computerized point-of-sale systems, enabling fast and accurate checkout.
1987 – Installs the largest private satellite communication system in the U.S., linking operations through voice, data and video communication.
2000s – Dedicated to offering customers a seamless shopping experience, whether they are online, in a store or on a mobile device.
2010s – People-Led and Tech-Empowered. Walmart commits to serving customers in a changing retail environment, leveraging both associates and technology to make it happen.
2016 – Walmart opens its Culinary & Innovation Center in Bentonville to develop and test new and innovative products.
2016 – Walmart Pay, a fast, easy and secure way for customers to make purchases with their smart phones, becomes a popular in-store payment method.
Online retailer Jet.com becomes part of the Walmart family with the two companies joining forces to save customers even more time and money. Hayneedle, a subsidiary of Jet.com, is also included in this merger.
2018 – Walmart establishes strategic partnership with Microsoft to further accelerate digital innovation in retail. This is also a defensive move against the omnipresence of Amazon in both retail and technology.
The trending theme here is Every Day Low Prices and Leadership in Customer Service. The phenomenal growth of Walmart is attributed to its continued focus on customer needs and reducing cost through efficient supply chain management practices.
In the early 1970s, Walmart became one of the first retailing companies in the world to centralize its distribution system, pioneering the retail hub-and-spoke system – Goods were centrally ordered, assembled at a massive warehouse, known as distribution centers‟ (hub), then dispatched to the individual stores (spoke). By making full use of its IT capabilities Walmart was able to make more inventory available in the case of items that customers wanted most, while reducing the overall inventory levels.
This is in my opinion is one of the classic examples of how a business uses technology to drive its strategy objectives. I know that in 2018 we have become so romanticized by technology that we do forget that business strategy comes first. For sure technology is critical. Companies like Facebook, Google, Amazon won’t exist without the technology. However strategy informs how they deploy the technology. They don’t start with the technology.
