Surviving Near Extinction, A Corporate ‘Dinosaur’ Forges On

Context

Walmart is a retail powerhouse. Yet, even as the world’s largest retailer, the company struggled to innovate for years amid the rise of e-commerce giant Amazon, now its biggest competitor.

2025 will mark a decade since Walmart’s turnaround plans kicked into high gear. The company forecasts consolidated net sales to grow by 4% and operating income by 6% despite expectations of a continued global economic downturn. The company’s secret is in delivering better customer engagement, which aligns with founder Sam Walton’s vision for the retail chain four decades prior.

Behind Walmart’s story of customer engagement, however, is its strategy for revival right when it was facing an existential threat from Amazon.

Real-Life Story

Walmart was forced to confront ugly truths about its retail business before it could revive its stagnating stock price in the age of e-commerce.

Not only was it losing market share to Amazon and being mocked by analysts as a corporate “dinosaur” – it was also losing favour among loyal customers.

Brick-and-mortar stores in the 2000s struggled to compete for customers’ attention. In the case of Walmart, products were often out of stock and stores were left unorganised and filthy.

For about 15 years, investors passed up on Walmart stock mainly because of the company’s lack of innovation. That was until it started learning from Amazon’s playbook.

Starting in 2016, Walmart slowed down expansion efforts by opening fewer brick-and-mortar stores. Only a year before, Walmart opened over 350 retail outlets in the US alone. However, the company cut down the number of new store openings to only a couple of dozen the following year despite keeping its budget for capital expenditures at US$11bn.

The funds were instead reallocated towards enhancing existing stores, improving customer relations, and pivoting to an omnichannel approach that allowed customers to connect with and purchase from local stores through a mobile app.

Apart from investing in technology, the company doubled down on advertising campaigns to reintroduce the brand to today’s generation of online shoppers.

Walmart also started to optimise its supply chain and last-mile delivery programme and offered a store or curbside pick-up service. These later became an essential part of its success during the COVID lockdowns. Coming out of the pandemic, the company’s stock surged and, in the 2022 financial year, its revenue reached $573bn, a 2.4% increase from FY2021.

PostScript: For years, Walmart capitalised on economies of scale and kept prices low to earn the loyalty of consumers who wanted both choice and convenience. Today, the retail giant continues to reach customers by operating over 10,000 stores across 24 countries. In the era of digital apps and contactless delivery, however, the retail giant’s omnichannel approach has become a game-changer.

Key Lessons

1) Adaptation and innovation

WarTime CEOs should reassess traditional expansion, allocate resources to enhance existing operations and adopt new technologies. This ensures companies remain relevant and competitive in a rapidly changing market.

2) Customer-centric strategy 

WarTime CEOs should focus on improving customer engagement and experience. Aligning with foundational business principles the way Walmart did can help rekindle customer loyalty and satisfaction.

3) Operational efficiency 

WarTime CEOs should invest in optimising supply chain and delivery programmes. Efficient operations, particularly during crises like the COVID pandemic, can sustain business continuity and drive growth.

4) Brand reinvention 

WarTime CEOs should leverage advertising and marketing to reintroduce and revitalise the brand. Engaging with a new generation of consumers through modern channels is crucial for maintaining market appeal.

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Until next week, may the force be with you.

Kevin

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