Walmart Stores Inc. became the nation’s largest, and one of the most successful, retailers because the company offered consistently lower prices than competitors. Executives bragged about how Walmart’s low prices helped lift millions of Americans out of poverty.
But those low prices came at a …price. The company underinvested in wages and training for employees and managers. At the same time, Walmart asked them to do more. That caused its own set of problems that consumers felt. It was sort of a pennywise and pound foolish strategy which the retailer (eventually) came to regret (at least somewhat.
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Ranked dead last
Today’s stores are not just stores. They also act as distribution hubs for e-commerce, where customers can pick up and return online orders in the store. And Walmart (WMT) also ships goods bought online directly from the store to homes and businesses in tight delivery windows. For employees, working in story has gotten exponentially more demanding and complicated.
So it should probably come as no surprise Walmart’s customer service is pretty bad. As in dead last bad. According to the American Customer Satisfaction Index, Walmart ranked at the bottom among 20 general merchandisers with an overall score of 70 out of a 100. By contrast, Costco Wholesale Group (COST) ranked number one with a score of 82.
Rubbing salt in the wound, even dollar stores like Dollar Tree Inc. (DLTR) and discounter (but not a dollar store despite its name) Dollar General Corporation (DG) beat Walmart. Regulators have fined Dollar Tree in particular hundreds of thousands of dollars for health and safety violations, including blocked emergency exit routes, unsafe ladder use, improper merchandise stacking.
Training managers to motivate employees
Now, Walmart is taking action to fix its problems. The company recently launched a week-long training program called Manager Academy to help managers better oversee employees and store operations.
The program is part of an initiative Walmart announced in 2021 to spend $1 billion over 5 years on career development and training for its employees.
With the Manager Academy, managers explore case studies about leading store operations, network with senior leaders, and tour stores with the latest technology. The company said more than 2,000 managers will participate in the program this year.
Jennifer Bennett, a Walmart store manager in Lebanon, Virginia, said connecting to Walmart’s culture is a core part of the training.
“Manager Academy completely changed my way of thinking,” Bennett said in a statement. “If you take care of the people, they’ll take care of the customer. Teach and grow your people, and they will take care of any challenge.”
Analysts say managers are key to a store's success, especially when it comes to motivating employees to perform well.
“The best managers know how to get the most out of their team by using their people management, listening, and problem-solving skills to encourage their associates and sustain employee engagement,” Bob Phibbs, CEO of The Retail Doctor, wrote in a blog post.
“That means using judicious, constructive criticism instead of belittling them,” he said. “It means respecting others instead of ‘my way or the highway.’ It means leading by example instead of doing as I say.”
