I was browsing the business news earlier today and noticed an ominous headline: Walmart's Project Impact: A Move to Crush Competition. With my curiosity piqued, I decided I needed to learn more about Project Impact.
It turns out that Walmart first announced this initiative almost a year ago. In short, Project Impact is a three-year strategic plan to remodel its U.S. stores while creating greater efficiencies in pricing. Of course, Walmart is already famous for its low prices. Surveys indicate that the company enjoys a 13.5 percent price advantage over archrival Target, and Walmart has opened 52 new Supercenters since February 1 -- even as much of the competition has been forced to close down stores during the economic downturn.
So -- what is at the heart of Project Impact, and what can entrepreneurs learn from it?
10 words drive Project Impact. The first 4 are in the marketing message aimed squarely at its potential and current customers:
Save money. Live better.
Makes sense given the current economic situation. Who doesn't want to save money and live better?
The next 3 words drive Walmart's merchandising decisions:
Win. Play. Show.
Win items are merchandise that Walmart already leads the competition in pricing. The company is going to focus its efforts to aggressively gain share by improving prices even further on these Win items, while enhancing in-store product displays to further showcase them with shoppers. Play items offer both scale and credibility but hold out little future growth potential for Walmart, or they may offer high future potential as well as play an important role currently. Show items are ones that offer little or no growth opportunity to Walmart, but that the company must stock because shoppers expect them to be available. This division of merchandise into three categories will enable Walmart to increase product turnover, decrease inventory, and trim the number of different items it stocks in stores -- allowing Walmart to reduce clutter.
This leads to the final three words driving Project Impact:
Fast. Friendly. Clean.
Shoppers have long complained that Walmart stores are not organized well. These complaints are being addressed with a major store remodeling effort designed to make shopping at Walmart easier, faster, and more pleasant. By the end of 2009, the company expects to have remodeled 12 percent of its stores, with all stores completely remodeled by the end of 2014.
The best plans are often the simplest, and the nation's largest business knows that better than most. What marketing messages are you sending your customers? Do they resonate as deeply as Walmart's Save Money Live Better? Do you have an intimate knowledge of your products and services, and which ones are most profitable to you -- and should be emphasized and further strengthened -- and which ones are least profitable, and should be deemphasized, or perhaps abandoned? Do you offer a shopping experience that is enjoyable for your customers and customers-to-be? If not, what can you do to change?
No matter how large or how small your business might be, there are lessons to be learned from the 1000-pound gorilla of American business.