SPRINGDALE, ARK. — Walmart, the No. 2 CE retailer, is putting fresh fixes and a new management team behind its entertainment business, which remains one of its largest but most stubbornly stagnant categories.
Among the priorities, chief merchant Andy Barron told TWICE during a store tour here this month, are improved training for CE department associates, new measures to reduce CE shrinkage, better access to new product introductions, and closer vendor ties.
“It’s a struggling business but a lot of the wounds were self-inflicted,” said Barron, a past Walmart CE head who succeeded Steve Bratspies late last year as executive VP softlines and general merchandise manager.
Indeed, many of the CE fixes involve basic retail blocking and tackling, as described by Walmart U.S. president/CEO Greg Foran.
“There has been progress of late around things such as product being more available for our stores to order, a simplification of the assortment, and leaning into clearing deleted merchandise,” he told TWICE at a press conference here earlier this month. “We think it’s a really important part of our merchandising package.”
Added Barron, “We’ve been working diligently on the basics part of that business: basic in-stock, and having new products for customers as they come out, not after the fact.”
Foran, a New Zealander who ran Walmart Asia before assuming the top U.S. spot last summer, noted that there is also “work still underway within a ‘lab setting’” that will provide “a much better solution for our associates and customers. We’re excited about the opportunities here.”
The first fruits of the initiative, which is the latest in a long series of CE jumpstarts, are expected to become more visible sometime later this year, Foran said.
The turnaround can’t come soon enough for Walmart, which has been slogging through consecutive quarters of weak CE comps. Most recently, Foran reported soft tech and entertainment sales for the first quarter, ended April 30, due to portrelated stock-outs, the shift from physical to digital media, and “industry contraction.” For calendar year 2014, sales of electronics slipped 3.1 percent to $21.6 billion, according to TWICE’s latest Top 100 CE Retailers Report.
Spearheading the latest CE effort is former marketing and hardlines merchandising exec Greg Hall, who in January became the retailer’s fourth CE chief in as many years. He succeeded Laura Phillips, who was given the new role of senior VP, omnichannel assortments, to help Walmart better leverage key SKUs across physical and digital channels.
Barron said Phillips’ work will also play an important role in Walmart’s CE initiative given the category’s greater online penetration, which stands at roughly 35 percent industrywide.
“We got to be really married up with our dot-com folks as we move forward on product and how we look at having one product strategy across the enterprise, as customers look at Walmart and Walmart.com as one single piece,” he said.
Walmart’s CE team is also “working hard on supplier relationships,” Barron told TWICE. The closer partnerships, however, stop short of dedicated branded displays, a reversal of recent trends at Walmart, as well as at Best Buy and other tech retailers.
“We don’t rent space,” he said.
The closer vendor ties may also translate into further cost concessions, as price remains a key focus in Walmart’s negotiations with its suppliers, Foran said.
The strategic CE insights were gleaned during a series of senior-level press meetings and store tours held during Walmart’s annual shareholders’ week event earlier this month. The integration of physical and digital was a major theme, and was demonstrated here by a pilot curbside grocery pickup program, which allows customers to place a food order online and retrieve it at a dedicated depot within two hours.
The shareholders meeting culminated Friday with the appointment of Greg Penner as the company’s third-ever chairman. Penner, a founder and partner of an investment management firm, succeeded his fatherin- law Rob Walton, who is the son of Walmart founder Sam Walton.