Daily Dose of iQ: Walmart's (Logistical) Omnichannel Dilemma

Jul 22, 2013 — Joan Gurney

My colleagues and I came across an article on LogisticsViewpoints.com examining the details behind Walmart's ambitious omnichannel/DOM (Distributed Order Management) strategy.

The author, Steve Banker, essentially weighs the balance of Walmart’s investment in technology to enhance their online experience and the execution of that experience at an in-store level.

“But this massive investment in technology will not pay off if Walmart cannot execute,” he writes. I would agree, but it's unfair to expect Walmart to execute perfectly from the outset.

It's unfair to expect Walmart to execute omnichannel perfectly from the outset.

Walmart is making a huge investment in technology to enhance their omnichannel experience and I’m sure there will be plenty of hiccups along the way, but even if their execution is not perfect, the company is still moving forward. As long as it's offering services that aren't available from competitors, or that are even just fractionally better, Walmart is still in the lead.

Banker's doubt stems largely from the operations end, however. He writes: “Wal-Mart doesn’t have enough bodies to restock the shelves.”

Walmart's huge geographic network of stores is a major advantage in the omnichannel game.

This makes sense at a core level. If I walk into a store and the shelves aren’t stocked, I can’t purchase those products, so the in-store experience falls short. Yet in this particular case, I think Walmart has an advantage. One of their largest assets is their massive fleet of stores across North America. They’re highly accessible.

If one location doesn’t have a product, there are plenty of other Walmart locations that might. Another factor to consider is their product selection and competitive pricing. Personally, I can rarely walk into a Walmart location and not walk out with at least 15 things I didn’t plan to buy, even in a poorly stocked store. So again, even without perfect execution of the omnichannel experience, they are able to pick up the slack in other areas.

Walmart's success in other in-store areas (e.g. impulse buys) give it extra leeway.

Take-home message for retailers intent on omnichannel: View your omni-channel experience with a much more global perspective. Look at the individual components as well as the whole. You may not be able to develop the absolute best online experience right away, but if your core business is strong it’s a solution to work towards. Just be sure to really excel at something. A business that is mediocre both on and offline won’t succeed just by embracing the omni-channel approach.

Topics: Retail Operations, Mobile Industry, Customer Experience, e-Commerce

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