Back in 2009, Walmart surveyed its customers and asked “Would you like Walmart to be less cluttered?” They said yes. So Walmart cleared out space and reduced inventory and customer satisfaction shot up. However, same-store sales plummeted, by Phil Terry’s estimate, by $1.85 billion, and now Walmart has fired the team that put the idea into place and is spending hundreds of millions to undo what they spent hundreds of millions doing. But wait! Weren’t they listening to their customers? Why weren’t they rewarded?
It was a costly mistake that required lots of overhaul and refurbishing. 15% of inventory was removed from the stores. End caps were slimmed. Shelves got shorter. Gone were the big pallets of stuff stacked in the middle of aisles. Ah, it was more clean and open, more like Target – the strategy was put into place by a former Target exec, who is now a former Walmart exec – and sales dove. How could this be?
See, Walmart wanted to play like it was listening to their customers, but they weren’t listening to the true signal. “Walmart came up with the answer first, then asked customers to agree to it,” writes the Good Experience blog. This is the peril of listening to what your customers say instead of what they actually did. Turns out that while they enjoyed the increase in negative space inside the stores, what matters more to Walmart customers is a vast selection of cheap items.
This is the same strategy that Sam Walton pioneered and the company is now scrambling to return to.
Truly customer-centric strategies need to look past mere survey responses and instead examine what drives the real underlying consumer behavior. Otherwise you get this mess, which, really, writes the good Experience blog, “ignores customers while attempting to fool stakeholders into thinking that the strategy is customer-centered.”
Walmart’s $1.85 billon dollar mistake [Daily Artifacts]
Ignore the customer experience, lose a billion dollars (Walmart case study) [Good Experience]