Wal-Mart Melds Merchandising and Operations to Sharpen Customer Focus

February 2, 2010

Wal-Mart has created a new merchandising execution department, which will focus more strategically on brand strategy and more powerfully align merchandising and operations.

The new organization will be led by Andy Barron, senior vice president of store merchandising execution, will design merchandise strategies for each of Wal-Mart new geographic business units (GBUs) in the U.S., according to a company statement.

Barron “will design merchandise strategies for each of our GBUs and translate those plans into executable customer-focused programs,” said Bill Simon, executive vice president and COO of Wal-Mart U.S. Barron will report to both Simon and John Fleming, executive vice president and chief merchandising officer for Wal-Mart U.S.

Andrea Thomas

Senior Vice President of Private Label Brands Andrea Thomas will move from marketing to an expanded role in merchandising as senior vice president of brand merchandising for home, hardlines and entertainment. It is unclear at this juncture who will be replacing Thomas.

The in-store presentation and store groups, currently in the customer experience department, will move to Barron’s team, close to operating business units. According to the retailer, the change “means we’ll be even more connected with operations – and with our customers,” said John Fleming, executive vice president and chief merchandising officer for Wal-Mart U.S.

With the realty department now reporting to Bill Simon, Scott Huff, senior vice president of customer experience and his team will transition to the realty department, providing alignment from store locations to store execution, according to a company statement. Tim Austin, vice president of store planning, and his team will move into Huff’s department.

Mike Duke

“We’ve laid out our three priorities to deliver more value for both customers and shareholders – growth, leverage and returns,” said Mike Duke, president and CEO of Wal-Mart. “We’re continuing to make a number of changes across the business to ensure that this strategy is driving our structure, and that every part of our business is becoming more global, leveraging our scale, and moving closer to the customer.”

In the home and hardlines divisions, Mike Moore will assume responsibility for automotive, stationery, hardware, fabric and crafts and sporting goods as senior vice president of merchandising for hardlines. Karen Stuckey will extend her responsibility for outdoor living and seasonal categories as the senior vice president of home merchandising. Both Moore and Stuckey will report to Fleming.

“Karen has shown tremendous leadership in her current role over the home category, and the unified team will be even stronger,” Fleming said. “Now when a customer is shopping for home decorations, she will find solutions all in one place.”

Meanwhile, Carey Cuddeback will transition to Rick Webb’s team where she will lead the product lifecycle management system project.

As part of the new global sourcing structure, Senior Vice President Michael Lewis will lead the global merchandising center (GMC) for packaged grocery and will report to Jack Sinclair. Lewis’s team will be responsible for leveraging Wal-Mart’s global scale to source products for the retailer’s grocery business.

Jeff McAllister was named senior vice president of operations for the newly created Texas Division. Paul Beahm will assume McAllister’s responsibilities as senior vice president, health and wellness operations.

Wal-Mart also announced the creation of a global.com organization to leverage “the fantastic potential for Wal-Mart around the world in e-commerce,” Duke said.

For more details on Wal-Mart's reorganization see the following memos posted on the company’s web site:

Organizational change memo from Mike Duke
Organizational change memo regarding Walmart US from Eduardo Castro-Wright
Organizational change memo from Bill Simon
Organizational change memo from John Fleming
Organizational change memo regarding e-commerce from Eduardo Castro-Wright

SBD Views: Two thoughts on these pieces about the Walmart reorganization.

Andrea Thomas could be a big winner here. From a role in store brands that “supports” merchandising, Thomas will now have the lead merchandising role charged with driving store brand sales in big general merchandise categories. Her promotion further documents the growing influence that marketing executives are having at Walmart.

Walmart’s attempt to meld merchandising and operations is an extremely bold move that demonstrates their strategic focus on the customer.  At the same time, it may be viewed as a shotgun marriage between the retail worlds of merchandising and operations. It will be interesting to see how the cultural issues associated with this play out, especially for Andy Barron in his role as senior vice president of store merchandising execution, who will be reporting to both Bill Simon, executive vice president and COO of Wal-Mart U.S and to John Fleming, executive vice president and chief merchandising officer for Wal-Mart U.S. If Simon, Fleming and Barron pull this off, they may well have created a new organizational model for the modern retail enterprise. If they don’t, well, it sure was a bold move.

–– John Failla for Store Brands Decisions

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