The business world is all abuzz over Walmart's announcement of a two-day shipping subscription service targeted directly at Amazon's Prime service. I don't like buying from Amazon anymore than I do from Walmart for a variety of reasons, but the main reason focuses on the company's use of ginormous warehouses in obscure communities where workers struggle to get through one more day of stuffing dildos (no really, dildos) into shipping boxes without incurring the wrath of a supervisor. Chasing Amazon's tail is a losing strategy because of one of the most basic of business realities: if you want to steal customers from a competitor then you must be better enough to justify the hassles for those customers to make the change. You must overcome the inertia the customer feels in resisting any change. Being the same as your competitor is worthless. Walmart must get ahead of Amazon, not simply become a clone. Dana Blankenhorn writing in The Revolution At Wal-Mart Failed agrees:
[Walmart CEO Doug] McMillon's efforts seem squarely aimed at one company---Amazon---and the flailing about demonstrates just how difficult his task is. It comes down to breaking bulk. Wal-Mart's technique for doing this was state of the art 20 years ago. Using bar codes and cash register data, the company could know when a store was getting low on an item and re-order it directly from the manufacturer, cutting warehouse costs. The boxes were opened and stocked by low-wage "associates" overseen by career-oriented managers. The hope was that some associates would grow to make the leap. McMillon did. He began on the shop floor in college, getting onto the management track after graduation. What Amazon has done, over the last 10 years, is invest billions of dollars in warehouses that can break bulk directly. Workers use technology on the warehouse floor to prepare individual items for shipment. Amazon automated selection through its Web site, automated the warehouses, and is constantly working to cut delivery costs.
Blankenhorn continues:
The "Walmart Express" concept has been shelved, and many Neighborhood Markets closed, while some others have been announced for opening. The changes at the SuperCenters have been subtler - there are more efforts to keep shelves clean, floor employees are making a little more, in-store pick-up has improved. But there has been no revolution, and it seems there won't be. Meanwhile the e-commerce effort is being re-focused on opening more warehouses around the country, copying Amazon. This has been met by hosannas from a business press that fails to understand that Wal-Mart is merely copying Amazon's back-end, and is missing what makes Amazon great. What makes Amazon great is Amazon Prime. Customers with Prime accounts, 54 million by last count, already get free shipping, along with other benefits, and Amazon has moved to make the video component stand alone. Because of Prime, an advantage of a few dollars in price on an order placed at Walmart.com isn't going to make much difference to these shoppers.
Walmart needs a difference that makes a difference. McMillon needs to discover how to make Walmart better enough or accept the slow death of the almost good as. Jeff Hess: Have Coffee Will Write.

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