Today, the WSJ published an interview with William Simon who heads Walmart’s US division. Simon says that to improve sales, Walmart is returning to its “Every Day Low Prices” formula.
According to the company website, it states this important core principle:
We’re known around the world as the company that helps our customers save money so they can live better.
Saving customers money is core to the culture of Walmart.
Additionally, since its founding, Walmart has had a customer service philosophy that is grounded in respect, service, and excellence.
… if you think about it from the point of view of the customer, you want everything: a wide assortment of quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; and a pleasant shopping experience.
So I was perplexed by Mr. Simon’s response to the interview question, “Can you just go back to what Wal-Mart did well?” Mr. Simon responded:
I try to avoid the word “back,” because back doesn’t exist; history is gone. You have to take what worked for Sam [Walton], what’s worked recently, and where you think the business is going and build it all together.
Well, history may be the past, but it definitely has a place in defining the character of a company that endures into the future. Saving the customer money and making shopping easier is part of the history of Walmart that defines the company. Therefore, to alter either of these principles, distracts Walmart from its character, its Purpose and Philosophy, its Core Culture, its identity. Maybe Mr. Simon gets that, but his words were a bit confusing.
Having low prices every day is core–you don’t discount some items and raise prices on others.
Making shopping easier is core–you don’t eliminate selections that the core customer base expects.
Yes, companies have Priorities–strategic values–that allow them to compete and thrive in a changing business environment. But those values must reinforce and align with the company’s core values. In the case of Walmart, any strategic Priorities must align with the core principles derived from Sam Walton.
So, can Walmart compete by having smaller stores in urban areas? And can Walmart compete with online retailers? Business is challenging, but if the company forgets its core principles, any strategies that are not aligned with the core may produce negative results.