Walmart's Big Problem, and what this could mean for retail

I won't sugarcoat it: I just had the worst eCommerce/Brick & Mortar combo experience of my life. So I'd like to tell my story here, with the hope that it reaches the ears of a change agent within Walmart that needs some proof that something is broken and needs to be fixed. I wonder if my experience with Walmart foretells of a bleak future for dual-presence (r)etailers, or perhaps an opportunity for disruption from a more nimble company that gets it right.

Here's my little slice-of-life story. Yesterday, I saw a great deal for a knife set, pictured below. I was looking to buy a new knife for a camping pack, and when I saw that Walmart.com had one of my favorite manufacturers, Kershaw, on sale with this two-knife set for $15 (no affiliate code embedded there, I promise), I decided to buy.

So off to walmart.com I go, thinking I'd save a few bucks over Amazon's listing for a similar item. Everything goes pretty smoothly - I got an email saying, and I'm paraphrasing - "We got your order, don't go to the store until we tell you it's ready." So I waited an hour, didn't get a that second email, and thought I might as well head to the store just in case there was a glitch. Turns out I was right.

When I get to the store, I go to customer service, and the nice gentleman there tells me I have to go to the back of the store for online pickup. No problems yet, I just walk back there. Another nice gentleman is there helping another customer, so I wait. It takes a while, about 15 minutes, but no biggie, I wasn't even told it was ready so I have no reason to be upset. That customer's problem sounded pretty unique, so let me tell you about it, because this was my first indication something was wrong with Walmart's system.

This particular customer had ordered a stroller, but when they arrived to pick it up, the order was cancelled and the stroller was listed as out of stock. So they went to the shelves, picked out the stroller that was, in fact, in stock, and asked to buy it. The system Walmart was using was unable to do that, but the associate helping the customer was trying really hard to make it work. I've never seen so many button presses on a scanning device. After another 10 minutes, he called for help while another customer arrived behind me to pick up their online order.

Sensing a break in the action, I asked the associate about the order I wanted to pick up, and an assistant manager arrived to help the stroller lady. He said the item hadn't been picked yet, but the associate offered to go find it on the shelves for me and bring it to the eCommerce checkout area. How nice! I was smiling. Great service.

While he's away, the assistant manager determines that there's no way he can apply the eCommerce checkout to the out-of-stock-but-in-hand stroller the lady had, so she asks if she can just buy it at the checkout, which she leaves to do. Shame she wasted more than half an hour, I thought, but it must have been a one-off.

Good news, though - the associate comes back with the knife set I had ordered, but the assistant manager had started helping the other lady, so I waited and listened. What's this, another unique situation? She had ordered something online with the "ship to store" feature, and the tracking info showed that it had been delivered earlier in the week but she hadn't received her "pickup is ready" notification. This poor assistant manager went on a very detailed search, looking everywhere for the missing package. Fifteen minutes later, it was nowhere to be found. Knowing I was waiting and she was getting frustrated, (this guy was good, high emotional IQ), he called for help, and two managers appeared in a few minutes - I think one was a customer service manager, and the other was some other type of manager. They understood what needed to be done with my order, but the systems failed them.

I kid you not: it took two store managers another 20 minutes to get the technology working. First, the item couldn't be given to me because it wasn't logged as "picked" yet from the shelves. When they tried to do that, though, the app they were using on their phones wasn't working; it kept having issues. Then they got the app working but it wouldn't allow my item to be marked as "picked" because there wasn't a printer attached to their device. So they went to go find a wireless printer, which they found, but it was out of paper. Good news, though, they found another with paper, but this one had a low battery, and in the process the app had timed out and locked up. When the app came back, the battery on the printer died, so they started over with the battery from the paperless printer. We were making progress, though.

All the while I'm half-listening to the other lady with the missing package and her interaction with the assistant manager. He's being so nice ... offered to go to the front of the store and search there, so off he goes. By the time he comes back, the managers helping me have the technology working, and they are able to "pick" and finally mark as "picked up" my knife set. The price changed, though, she said - the system lowered the price automatically to the store price because it was locally less expensive than online. That's a nice surprise. I didn't know how much cheaper it was, and neither did she, but hey, a discount is a discount! I had already pre-paid on Paypal so I thought I'd get a nice surprise later.

The assistant manager comes back just as I'm finishing up, and hands my manager a gift card to give to me (and I notice he has one in-hand for the missing-package-lady.) The manager apologies again for how long this took, and hands me the gift card. These folks were really wonderful. I use the gift card to buy some batteries on the way out - turns out it was a $10 gift card - and I'm home in a flash.

So what about that discount I expected from Paypal? I got a notice today from both Walmart.com and Paypal that my order was reduced by $6! Here's the email:

So why am I writing this blog post about how horrible it was? The reality, as you can tell, wasn't that bad ... for me. I'm not writing this because I'm angry, or upset, or I was treated unfairly. In fact, quite the opposite. The people I interacted with were terrific, and the company made me whole. I'm writing this blog post about the system behind all of this that has clearly failed Walmart. Let's think about this:

• I traded $15 ($16.20 with tax) for a product that must have cost Walmart at least $7, given the gross margin structure of that business. I'd bet, because it was on clearance, that their costs were actually higher.

• My issue occupied four employees locally for a total person-time of at least an hour. Three of them were management-level. I'll leave it to you to estimate their cost of that.

• Because of their system problems, they gave me a $10 gift card.

• Because the item was on sale locally for less than the eCommerce site, I also received a $6 credit.

Yep, my new knife set was free to me. And what really gets me is that this doesn't seem to be a unique issue. In fact, out of the three people at that pickup desk while I was there, all three of us had problems. I believe that this real-word example, this little slice of life, has some value to investors in Walmart and corporate managers at Walmart.

I had a friend years ago who was a retail analyst for a large investment house, and he would actually go to a certain department store and count customers, displays, sale items, etc. The idea was that he might then extrapolate to make recommendations for future investments. Perhaps those that read this story can tweet, share, and otherwise send along my experience so that the folks that really care about making things better - and more profitable - for Walmart can do so.

And, of course, this all leaves me wondering - is there something fundamentally wrong with the current state of mixed-marriages that combine online with offline presence? Did Radio Shack, or Sears, suffer the same fate? Who, besides Amazon of course, is getting this right?

NB: Walmart and its logo pictured above are registered trademarks and the property of Wal-Mart Stores, Inc. DBA Walmart and is used without permission for non-commercial purposes. Click here for an explanation of fair use.