Walmart’s #PRFail Recognition May Win the Retailer $3 Billion

Aisles of a Grocery StoreIn the wild and wacky world of corporate PR, it seems the larger the brand, the more difficult it becomes to acknowledge mistakes. The more transparent a brand is, the more vulnerable it becomes.

That may explain what takes place in Bentonville, Ark. (the corporate home of Walmart) on a daily basis. Until recently, the brand has seemed only proactive about growth and global domination.

And then, a story in Time came out last April that read: “Walmart has cut employee hours so deeply that it doesn’t have enough associates on hand to get stuff from back-of-the-store staging areas to the shelves.”

That caused Walmart to do something differently — respond. Sure, it’s more than a year later, but they’re new at this thing. Let’s cut them a break.

The problem when groceries should be on the shelves but are nowhere to be found is called “out of stocks,” and that is a huge no-no for grocers and retailers because if they don’t have stuff on the shelves, patrons go elsewhere for shopping. Moreover, that causes loss of confidence in a shopping experience, forcing patrons to reconsider ever returning.

According to its most recent annual report, Walmart’s U.S. stores grew operating income faster than sales during fiscal 2013, reducing operating expenses by 27 basis points over the prior year. That means Walmart took $740 million out of its cost structure.  Some of that is labor; the question is whether service has suffered as a result.

bread-shelvesFast forward to August 2014, when we discover Walmart addressing this issue. Like, publicly. As in, something they don’t do. According to the Huffington Post, Walmart U.S. CEO Greg Foran is taking it to the streets. Well, it’s a national conference call, but it will work for now.

“We will deliver against these key customer requirements: being in stock, clean stores, the right price, the right items, improved service, better productivity,” said Foran, announcing his priorities on a pre-recorded conference call with analysts.

Walmart executives admitted at an internal meeting earlier this year that they needed to stock shelves correctly, saying it could be a $3 billion opportunity for the company, according to notes from the meeting obtained by Bloomberg.”

Say what you will about Walmart (and its, um, diverse shoppers) but the company has maintained a commitment to serving its customers. And now, those precious people are getting a little terse with this shortage, so executives in Bentonville have decided to not take this laying down on an air mattress that retails for $24.95.

Unlike what the conservative leaders of big box retail have done in the past, they are speaking out and admitting that issues exist:

Making sure the company has the right level of merchandise on its shelves is something the company is “always working on,” Walmart spokesman David Tovar told The Huffington Post. Walmart’s U.S. CEO Foran addressed the importance of well-stocked shelves at a meeting with staffers in Denver on Thursday to get ready for the holidays, Tovar added.

“Being in stock is a key retail fundamental, and it’s been that way in retail for many, many years, and it will be that way in the future,” Tovar said. “We’ve got to get it right because the customer can’t buy something if it’s not on the shelf.”

Money is at the forefront of the matter — make no mistake. However, with these out-of-the-ordinary responses, Walmart is hoping the pleas to the customer will resonate. What do you think?