story by Kim Souza
The new Walmart to Go convenience store opened recently in Bentonville is not the retailer’s first experiment with the small-store format. Wal-Mart historians and former corporate officers told The City Wire that the first convenience store for the company was located in Springdale in the 1990s.
Also, the first Walmart Express was built in Flippin, Ark., and catered to campers, fishermen and outdoor enthusiasts visiting Bull Shoals Lake. The original express store featured a few freezers, convenience store fare and a drive-through McDonald’s.
Andy Wilson, a former executive officer for Wal-Mart Stores, said testing new ideas is part of the corporate culture.
“Sam’s model was ‘Try it, fix it, then do it.’ he fostered a learning environment and back then we tried lots of ideas. Of course we were able to keep it quieter than they can today,” Wilson said. “The Wal-Mart culture has a low resistance to change and to stay relevant they are constantly testing and tweaking ideas to align with what customers want.”
One of the reason’s Wal-Mart abandoned the early test in convenience formats was because the one store in Springdale was located at the entrance to a former Sam’s Club on Thompson Avenue, according to Wal-Mart historians. The largest customer of Sam’s Club during the 1980s and 1990s were small convenience store operators and it was deemed a conflict of interest for the large retailer to compete with its largest customer base. The convenience store was sold in the late 1990s.
In 2003, Wal-Mart sold its McLane Company division to Berkshire Hathway for $1.45 billion. McLane is a distributor of cigarettes, tobacco and candy to convenience stores and other retail outlets.
Wilson said today selling convenience is a big deal to all businesses – retail and otherwise.
“You look at what Kum & Go and Casey’s General Stores have done to reinvent the C-store experience and it’s logical that Wal-Mart would try and tweak it’s own version,” Wilson said.
Walmart to Go is roughly 5,000 square feet and contains around 3,500 SKUs (items), with 14 employees, according to Betsy Harden, Wal-Mart corporate spokeswoman.
Harden said Walmart to Go is not open around the clock, store hours range from 5 a.m. to 10 p.m. daily. Competitor Casey’s General Store located three blocks way is open 24 hours a day. She said there are no other Walmart to Go stores in the pipeline or planned. A former insider has told The City Wire that a second Walmart to Go store is being prepped in Orlando, Fla.
Wilson said the merchandising team likely spent a year planning for this one unique format. He said they studied marketing data to determine what products needed to go in store, designed the layout, evaluated competition and worked to reinvent what’s already there.
He said figuring out operational structure and replenishment and then tying those systems into the supply chain and ramping up efficiencies with the use of technology all goes into the store planning phase.
“It’s like building a puzzle, one piece at a time,” Wilson said. “A lot of planning went into this format and when the ribbon is cut on Wednesday (March 19), you can bet the learn and fix it modes will be activated.”
One of the benefits of having a new format just a stone’s throw away from the corporate offices is the constant study possible within the various retail divisions. Wilson said executives will no doubt frequent the format, study the shopper behavior and learn as much as they can about consumer habits and preferences.
It can be a price-study lab, given that the products are branded, not private label and smaller portion sizes than what may be available in a supercenter or smaller grocery format. The retailer could also test higher prices – a trade-off for the convenience factor – in this small format.
Millennials are a demographic Wal-Mart wants to attract as they are often willing to pay more for convenience. The Walmart to Go offers quick meal solutions, prepared food and fresh fruit, all within a few steps of their car. With major pressure on drug store chains to discontinue tobacco sales, convenience stores could see a bump in volume, although this is declining category overall.
“It’s clear that Wal-Mart is keenly aware of what it’s losing in sales to more convenient formats. Let’s face it, it takes time to go to supercenter, it’s a commitment,” Wilson said. “Wal-Mart is exploring several ways to capture more of the fill-in dollar spend and the convenience format is just one of them.”
He said Wal-Mart may find some new lessons in this c-store experiment that they may apply to other formats around the globe. Such lessons could drive more sales and reduce overall costs.