Walmart's $1.85B mistake

[AJK]

Here's a frequent situation for many organizations and, unfortunately for Walmart, an all-too-frequent response.

What happened?

Walmart took the voice of the customer too literally. Customers answered a Walmart survey and told Walmart that they would prefer less clutter in the stores. Their reaction? "Project Impact" - a major change in strategy and store customer experience - starting in 2008.

The result:

a $1.85 billon dollar customer experience mistake made by Walmart (a conservative estimate of lost revenue that does not include the hundreds of millions spent on remodeling stores) - Walmart revised their decades-old strategy of low price and wide selection - 15% of the inventory removed from the stores - 30% - some suppliers reported losing 30% of their stock in Walmart stores due to the revamp - Removed pallets of items like juice boxes or sweatshirts stacked in the centers of aisles. - Slimmed down merchandise on “end caps,” displays at the ends of aisles - Shortened shelves - Revamp not only removed items but cost "millions of dollars" per store in refurbishment costs Source / full article here: http://dailyartifacts.com/walmarts-185-billon-dollar-mistake

The lesson? There's a difference between what customers say vs. what they do. Understanding the difference can lead to innovation...not understanding it can hit your bottom line, hard.

Link: http://uxsears.blogspot.com/2011/04/walmarts-185b-mistake.html

[TomLessing]

Very interesting story.

The tyranny of process .... having a bit of retail exposure I can tell
you there is plenty of process behind all of Walmarts intentions so it
is no accident. They managed to engineer it that way with plenty of
proof.

Coke had a similar story with new Coke somewhere in 80's if memory
served me right. Pepsi was making headway, winning first taste tests
and was reported to be tasting better than Coke and coke's researchers
confirmed this and after a lof research and development new coke was
born a better coke. Indeed the first sip of Pepsi and even New Coke
did taste better... BUT it is not first sip that really counts! The
moral of the story in someway is that by trying measure user behaviour
we learn we can influence people to tell us what they think they want
us to know. The Hawthorne effect. (For those that don't know the
story, in coke's case it caused and uproar from coke fans, new coke
was still born, it turned out to be positive for coke but nearly
became a disaster)

I bet it happens a lot more than people want to admit to, imagine
spending all that money, who is going to tell the boss A we were
stupid? B because we were stupid we wasted even more money?

"A fool with a tool, is still a fool"

T