Back to the Future

There is a very interesting discussion over at Retail Wire on Wal-Mart's recenly announced reorganization of its US operations.  If you haven't read it already, WMT is reorganizing its US operations into three geographic zones - West, South, and North.    Andy Barron, SVP of store merchandising execution, is tasked with developing individual merchandising strategies for the three business zones.  Each zone will have a president who will work with merchandising teams to provide assortments for the zones that "match local tastes".

The largest retailer in the world, along with Macy's, America's largest department store have now launched major initiatives to provide multiple merchandise assortments based on "local preferences".  In my view, this marks a major inflection point in American retailing.  For decades, the retail industry has been relentlessly consolidating, all in the name of lowering costs through greater leverage of capital and expenses.  This created huge central merchandising organizations with no connection to the end customer.  This, in turn, resulted in fewer, larger vendors and homogenous national merchandise offerings to an increasingly varied population.  Competing on price became the only option for these behemoth retailers, as exemplified by the "One Day" specials that grew to three or four days and the "Black Friday Early Bird Specials" that, in 2009, started the first week in November.

Now two major cnnel leaders have initiated major strategies aimed at providing more tailored assortments that recognize the variations of the American consumer.  Ironically, this is a "Back to the Future" moment returning to the days when local retailers understood and were part of a local community and offered merchandise assortments that reflected those preferences

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