Just 16 months ago, Wal-Mart purchased Jet.com for $3.3 billion and gave Jet CEO Marc Lore the keys to the Bentonville behemoth’s digital strategy. In no time, a steady stream of new e-commerce initiatives began to flow. Wal-Mart revealed Scan & Go technology, with which in-store consumers can use their phones as a kind of mobile checkout. It began offering free two-day delivery without a membership fee and discounts for click-and-collect customers. Another test tasked store associates with making deliveries to customers’ homes.
In September, it expanded its grocery delivery test with Uber, while also partnering with Google to allow consumers to purchase items from Wal-Mart using the Google Home smart speaker. A month later, it purchased New York-based third-party delivery startup Parcel in a strategy to master the last mile in densely populated areas.
Such initiatives draw headlines and build buzz, and they probably make Jeff Bezos feel that Lore and Wal-Mart CEO Doug McMillon are both kicking dirt on his shoes. But they are also yielding results. In its third quarter ending Oct. 31, Wal-Mart reported a 50% increase in U.S. online sales. Same-store sales were also up 2.7%, and brick-and-mortar traffic—weak in our own segment as the year wraps up—increased 1.5%.
The Need for Speed
What’s striking about all of this isn’t the innovation itself, but the speed at which Wal-Mart—and its iconic enemy Amazon—are acquiring, integrating and leveraging those acquisitions with new rollouts. Such speed can only come with one key ingredient: the acceptance of failure.
Neither brand has ever been averse to failure. Wal-Mart had tried out a half-dozen different store formats in the past two decades before refocusing on e-commerce.
“Most large organizations embrace the idea of invention but are not willing to suffer the string of failed experiments necessary to get there,” Bezos once wrote in a shareholder’s report.
“We are not used to failure in our industry,” said Stan Storti, president of Greenville, S.C.-based The Spinx Co., during a retailer panel at Winsight’s Outlook Leadership conference last month. Storti was speaking about foodservice, and how the art of a foodservice business—willingly throwing out product, increasing labor costs—runs painfully counter to the razor-thin perfection of traditional retailing. But he was also speaking about a real risk the c-store industry faces: not being prepared for the disruptive divide.
Another speaker at Outlook, Garrett Fitzgerald, manager of fleet electrification for the Mobility Transformation Program at the Rocky Mountain Institute, referenced two photos to stress the speed of disruption. One photo shows Fifth Avenue in New York on Easter morning in 1900. There are countless horse-drawn carriages and one lone car. The second photo depicts the same street on Easter morning in 1913. There are countless cars—and one horse.
Fitzgerald wasn’t the only scary/exciting speaker to blow the minds of Outlook attendees, and he won’t be the last to remind us that disruption is at our doorstep. Just when I think that our readers must be so tired of reading stories about disruption in CSP and on www.CSPDailyNews.com, something happens to remind me that such a luxury does not exist.
Be Bold
So what do we do?
It’s time we start failing. It’s time to throw stuff at the wall to see what sticks. To not be afraid to test something, and to roll it back if it doesn’t work. And consider acquisitions beyond stores. There’s plenty of opportunity for growth through consolidation, but think about it: Wal-Mart isn’t buying brick-and-mortar sites. In the case of Parcel, it didn’t even buy another retailer—it bought a tech-based service. Should c-store retailers start doing the same?
Ask yourself: What bold and audacious moves has your company made in the past 16 months? Have you failed enough?
Abbie Westra is director of Winsight’s Retail Content Group. Reach her at awestra@winsightmedia.com.
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