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Wal-Mart: The times they are a-changing’…

February 1, 2007

Under the reign of David Glass, Wal-Mart (WMT) invested in technology that would let them run the world’s largest retailer from the once small town of Bentonville AR. This  technology allowed them to optimize the profit per square inch of every corner, every shelf and every peghook in the store. Clipstrips added to this profitability by utilizing off-shelf space, and sidekicks drove sales at the end of every run.

But it seems the times they are a-changing’.

In an effort to create a more shopable environment, Wal-Mart is changing the layout of the Pharmacy section. Clipstrips have been removed, Gondola heights have come down, and there is now open space for customers to lounge in.

Open space?!? Lounging?!? In a Wal-Mart?!?

Obviously this impacts every vendor in the store, since there is less real estate to hold product. If the test is successful, you can be sure this format will flow through to every corner of the store.

If this sounds a little like Target, it’s for good reason. This new format seems to be the brain child of Wal-Mart’s recently promoted CMO, John Fleming. Mr. Fleming spent 19 years with the department stores division (Dayton Hudson and Marshall Fields) of Target Corp (TGT). There he held a variety of positions, including senior vice president of merchandising for the fashion divisions. He then came to Wal-Mart and grew Walmart.com into one of the country’s top three destinations for online shopping.

Only time will tell if reducing inventories and promotional programs, and creating lounging areas, will generate higher profit margins. But one thing is sure… the times they are a-changing’ in Bentonville, AR.


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