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Walmart’s Latest Initiative To Fend Off Amazon Is A Total Gas | Forbes.com

Walmart recently announced that it is expanding its push into the convenience store business. Forbes contributor and former Vice President of Target’s Store of the Future, Chris Walton, explains why this move is a no-risk, spot-on move by Walmart.

Source: Walmart’s Latest Initiative To Fend Off Amazon Is A Total Gas | Forbes.com

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Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.

Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.

Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.

He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."

4 thoughts on “Walmart’s Latest Initiative To Fend Off Amazon Is A Total Gas | Forbes.com Leave a comment

  1. You might want to reconsider the long term effectiveness of this strategy. I think this entire segment will suffer significant distress in 5 to 7 years and will likely collapse by 2030.

    Fully automated Self Drive Vehicles (“faSDVs”) are going to happen as evidenced by Googles purchase of around 100,000 faSDVs for near term USA only delivery. By mid 2020s, faSDVs might be half of new vehicles sold and by 2030 most will be faSDVs. By the early 2020s, the trend concerning faSDV adoption will be clear.

    The refueling of an faSDV will likely occur when the faSDV is unoccupied (like overnight) and the purchase location will likely be determined by an app that identifies the low cost supplier. Gas sales at convenience stores will drop and inside sales as well (no passengers for an impulse or routine purchase).

    A loss of 20% of sales at a convenience store will mean it is long out of business. And a 20% drop is highly likely by the late 2020s. And the industry will see it by the early 2020s. It will be a ‘bloodbath’.

    Fuel service may be an opportunity in the future but it will NOT be the convenience store model.

    • Hi Bob. First off, thank you very much for your comment. This type of dialog is great. Second, on the whole, I agree with you. Over time the convenience business will get tough. I see the adoption taking longer though, especially in-suburban areas, so that would still give Walmart 7 to 10 years minimally of run rate with this. As long as Walmart is being smart with the ROI calculation for the timeline this could occur, it still then should be an easy way to generate incremental cash flow while they focus on the retail store disruption which could and likely will happen even faster than the auto disruption.

      • Our family has built, bought and sold over 50 stores with a couple dozen still in operation (fast food). We look to recover build / buy costs in 5 years and look to have a stable rent and market for at least 10 years. Anyone who builds or buys with a 10 year only life cycle is doomed. The numbers really don’t work.

        I’ll grant that this case might be a bit different if WalMart restricts these stores to only those sites that have existing WalMart centers. A simple extension of the Murphy gas centers that we see in GA and FL might work. Free standing locations on the typical corner in an urban or suburban environment won’t have the backend value or lifespan to be economic.

        These kind of actions are not worthy of a competitor to Amazon, these are the kind of things that Woolworth or Sears might have done.

        WalMart has a huge advantage over almost any other competitor to Amazon (besides real retail experience). WalMart will exist in some form in 10 or 20 years … it’s advantage is that it can build for the future and not worry so much about long term survival. With this in mind, they should focus on big things that will make a difference to a company with a half trillion in sales. Convenience stores don’t seem to be it.

        (I’d also advocate that WalMart bulk up in finances and partnerships to get the ‘strength’ to be competitive with Amazon: https://goo.gl/8wFWLP )

      • Hi Bob. I actually agree with all your points and thinks that the smart approach you outline is how Walmart is thinking about it (i.e. on sites with current supercenters). In addition I agree this is not enough. They have to do more. I have an article going out on Forbes on that very subject. Stay tuned! And thanks as always for sharing your thoughts and ideas.

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