Love it or hate it, Walmart is a formidable player in the U.S. retail sales game, and during the pandemic, their sales have continued to grow. Here’s how they did it and what other retailers can learn during the dark days of COVID-19 and beyond.
Walmart has always had the knack to appeal to a broad buyer base, with a seemingly bottomless well of inventory and bargain prices. Cheap and plentiful goods are part of the formula, along with options for ecommerce. In 2020, online shopping is where it’s at, due to safety concerns. Walmart has seen a massive increase in online sales–a 97% increase, in fact.
Staying home was a recommendation, then a mandate, and is now a recommendation once more. Infectious disease experts, doctors, and scientists agree that less interaction with people and fewer outings, coupled with vigilant mask-wearing in public and hand washing, will help keep us safe and prevent or slow the spread of COVID-19. For people of a certain age and/or with compromised immune systems whose risk of a COVID-19 case being fatal, it’s imperative.
People began to make fewer trips to fewer places in order to stay safe. Thus the rise in online shopping makes sense. Because they already had an online shopping system set up, Walmart easily transitioned to providing more online sales, where customers could choose to pickup their orders or have them delivered.
Being a modern day trading post of sorts, a one-stop shopping spot, also helped bolster Walmart’s sales during COVID-19. Why risk going to three or four different stores when Walmart has groceries, cooking and gardening supplies, games, electronics, jigsaw puzzles, plus bath and beauty goods? Not to mention the extra time it takes to disinfect all the packages when you get home; it makes more sense for most people to only stop at one place. This time saved by going to one store (in this case, Walmart) instead of driving around can also help save your sanity.
Affordability, availability, and familiarity are key pillars of the Walmart formula for success. Easy is the magic word. Cheap is another word with extra appeal to the millions of people in the U.S. who’ve lost their full or part time jobs or have seen their hours/clients reduced since the shutdowns began in March. Stretching a dollar is the in-demand skill we all need to cultivate now, and shopping at inexpensive stores like Walmart is one way to do this.
For these reasons, Walmart’s second quarter sales surged as people began receiving their stimulus checks. Now, as most people have already received and spent their stimulus money, Walmart’s sales are slightly falling off again, though they are still strong. Their business model is working for consumers who need convenience and affordability.
Another factor in Walmart’s 2020 success is their massive inventory of in-demand items. I’m not even talking about the water and TP hoarders. As Americans stayed home longer, people sought ways to entertain themselves, set up remote workplaces for the adults and study areas for children and college students. People needed to exercise and cook more. Even jigsaw puzzles were nearly impossible to find online or in stores by the time early May rolled around.
Walmart’s sales of electronics boomed during this period: TVs and computer sales skyrocketed early on. As quarantine remained the order of the day, more people cooked at home more often, and cooking supplies also kept moving off the Walmart shelves and out of the warehouses. Many started working on their yards and gardens, and Walmart once again was there to accommodate.
Cooking and yard items still remain popular as people are realizing that they will be continuing to spend more time at home. People brightened their days and fought off boredom and the heat with inflatable pools for them, their kids, and their pets, or maybe bought bread pans, a pressure cooker, or lawn chairs.
Like many massive corporations, Walmart has had its share of scrutiny. They have been a problematic presence for a long time. However, they have always been able to reach their audience with low prices and a wide range of available items. These same factors have helped push their sales during 2020, and will likely continue to do so, especially if the government decides on issuing a second stimulus check to aid U.S. workers.
Big retailers are opting for refunds instead of returns
(BUSINESS NEWS) Due to increased shipping costs, big companies like Amazon and Walmart are opting to give out a refund rather than accepting small items returned.
The holidays are over, and now some people are ready to return an item that didn’t quite work out or wasn’t on their Christmas list. Whatever the reason, some retailers are giving customers a refund and letting them keep the product, too.
When Vancouver, Washington resident, Lorie Anderson, tried returning makeup from Target and batteries from Walmart she had purchased online, the retailers told her she could keep or donate the products. “They were inexpensive, and it wouldn’t make much financial sense to return them by mail,” said Ms. Anderson, 38. “It’s a hassle to pack up the box and drop it at the post office or UPS. This was one less thing I had to worry about.”
Amazon.com Inc., Walmart Inc., and other companies are changing the way they handle returns this year, according to a report by The Wall Street Journal (WSJ). The companies are using artificial intelligence (AI) to weigh the costs of processing physical returns versus just issuing a refund and having customers keep the item.
For instance, if it costs more to ship an inexpensive or larger item than it is to refund the purchase price, companies are giving customers a refund and telling them to keep the products also. Due to an increase in online shopping, it makes sense for companies to change how they manage returns.
Locus Robotics chief executive Rick Faulk told the Journal that the biggest expense when it comes to processing returns is shipping costs. “Returning to a store is significantly cheaper because the retailer can save the freight, which can run 15% to 20% of the cost,” Faulk said.
But, returning products to physical stores isn’t something a lot of people are wanting to do. According to the return processing firm Narvar, online returns increased by 70% in 2020. With people still hunkered down because of the pandemic, changing how to handle returns is a good thing for companies to consider to reduce shipping expenses.
While it might be nice to keep the makeup or batteries for free, don’t expect to return that new PS5 and get to keep it for free, too. According to WSJ, a Walmart spokesperson said the company lets someone keep a refunded item only if the company doesn’t plan on reselling it. And, besides taking the economic costs into consideration, the companies look at the customer’s purchase history as well.
Google workers have formed company’s first labor union
(BUSINESS NEWS) A number of Google employees have agreed to commit 1% of their salary to labor union dues to support employee activism and fight workplace discrimination.
On Monday morning, Google workers announced that they have formed a union with the support of the Communications Workers of America (CWA), the largest communications and media labor union in the U.S.
The new union, Alphabet Workers Union (AWU) was organized in secret for about a year and formed to support employee activism, and fight discrimination and unfairness in the workplace.
“From fighting the ‘real names’ policy, to opposing Project Maven, to protesting the egregious, multi-million dollar payouts that have been given to executives who’ve committed sexual harassment, we’ve seen first-hand that Alphabet responds when we act collectively. Our new union provides a sustainable structure to ensure that our shared values as Alphabet employees are respected even after the headlines fade,” stated Program Manager Nicki Anselmo in a press release.
AWU is the first union in the company’s history, and it is open to all employees and contractors at any Alphabet company in the United States and Canada. The cost of membership is 1% of an employee’s total compensation, and the money collected will be used to fund the union organization.
In a response to the announcement, Google’s Director of People Operations, Kara Silverstein, said, “We’ve always worked hard to create a supportive and rewarding workplace for our workforce. Of course, our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.”
Unlike other labor unions, the AWU is considered a “Minority Union”. This means it doesn’t need formal recognition from the National Labor Relations Board. However, it also means Alphabet can’t be forced to meet the union’s demands until a majority of employees support it.
So far, the number of members in the union represents a very small portion of Google’s workforce, but it’s growing every day. When the news of the union was first announced on Monday, roughly 230 employees made up the union. Less than 24 hours later, there were 400 employees in the union, and now that number jumped to over 500 employees.
Unions among Silicon Valley’s tech giants are rare, but labor activism is slowly picking up speed, especially with more workers speaking out and organizing.
“The Alphabet Workers Union will be the structure that ensures Google workers can actively push for real changes at the company, from the kinds of contracts Google accepts to employee classification to wage and compensation issues. All issues relevant to Google as a workplace will be the purview of the union and its members,” stated the AWU in a press release.
Ticketmaster caught red-handed hacking, hit with major fines
(BUSINESS NEWS) Ticketmaster has agreed to pay $10 million to resolve criminal charges after hacking into a competitor’s network specifically to sabotage.
Live Nation’s Ticketmaster agreed to pay $10 million to resolve criminal charges after admitting to hacking into a competitor’s network and scheming to “choke off” the ticket seller company and “cut [victim company] off at the knees”.
Ticketmaster admitted hiring former employee, Stephen Mead, from startup rival CrowdSurge (which merged with Songkick) in 2013. In 2012, Mead signed a separation agreement to keep his previous company’s information confidential. When he joined Live Nation, Mead provided that confidential information to the former head of the Artist Services division, Zeeshan Zaidi, and other Ticketmaster employees. The hacking information shared with the company included usernames, passwords, data analytics, and other insider secrets.
“When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market place,” said FBI Assistant Director-in-Charge Sweeney.
In January 2014, Mead gave a Ticketmaster executive multiple sets of login information to Toolboxes, the competitor’s password-protected app that provides real-time data about tickets sold through the company. Later, at an Artists Services Summit, Mead logged into a Toolbox and demonstrated the product to Live Nation and Ticketmaster employees. Information collected from the Toolboxes were used to “benchmark” Ticketmaster’s offerings against the competitor.
“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” said Acting U.S. Attorney DuCharme in a statement. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”
The hacking violations were first reported in 2017 when CrowdSurge sued Live Nation for antitrust violations. A spokesperson told The Verge, “Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light. Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.”
To resolve the case, Ticketmaster will pay a $10 million criminal penalty, create a compliance and ethics program, and report to the United States Attorney’s Office annually during a three-year term. If the agreement is breached, Ticketmaster will be charged with: “One count of conspiracy to commit computer intrusions, one count of computer intrusion for commercial advantage, one count of computer intrusion in furtherance of fraud, one count of wire fraud conspiracy and one count of wire fraud.”
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