It’s pretty easy to find a discount store now, as in a store that specialises in just that-discounts. That wasn’t always the case. Sam Walton, when he created Walmart, didn’t invent retailing but he did change the face of it and not only offered lower prices, he changed the relationship of the manufacturer and consumer. It was a risk due to low margins but even though he couldn’t find a backer to invest, he took a chance anyway.
When Walmart opened, there were discount stores available but most of them discounted certain items only. Walton’s plan was different. He wanted to offer the lowest prices, anytime, anywhere. To do that, his business strategy was slightly different than competitors. Instead of looking for units for his stores in big cities, he opened up in small towns and stocked the shelves full. Everything was available at discount prices. He gave credit for the rapid growth to his associates and the low costs. By sharing profits with them in the early days, they in turn provided great customer service. He kept the stores open for longer and shared his vision with the associates. When the company made money, he bought other discount stores to expand. As the margins were low, Walton knew that keeping stock of the inventory was vital and needed to be monitored closely. To keep track of stock, orders and what was selling, Walton installed electronic scanners at cash registers linked to a central inventory control computer and pushed the retail industry to establish the universal bar code. By doing this and by ordering such large quantities, Walton managed to revolutionise the service economy. The manufacturer once held all the power but now the retailer did. Walton brought costs down and questioned raw materials that were used for every product. If products varied, the supplier would have to charge less or use a better raw material. This meant that the prices suppliers charged were all in line with one another. #walmart #retail #entrepreneur #