The purpose of this memo is to show the affects of how Albertson’s is trying to implement many strategies in order to try, and compete with its powerhouse competitor Wal-Mart. This memo will contain information on steps Albertson’s is taking to gain back some of the market share that Wal-Mart has swallowed up.
It will also describe Albertson’s planned innovations that will be what determines their success. Lastly it will discuss how through IT as well as a successful implementation of satisfying consumers demands, will possibly allow them to compete with the ever so powerful Wal-Mart. Albertson’s is planning many new strategies to try, and grab some of the market share that Wal-Mart has taken from them. The main way they plan to do this is though innovative technology. The reason for this is do to the fact that Albertson’s has vigorously tried to offer many perks to its customers, such as substantially better customer service, as well as convenience.
Yet even though this may be true. Wal-Mart’s low prices have seemed to be far superior in generating revenue that has translated into enormous amounts of profits. So this is why now Albertson’s figures that if they cannot beat them on price then they will do it through information technology. One of the ways that Albertson’s has implemented information technology into their business strategy is to offer self-checkout lines. Albertson’s is currently installing 4,500 NCR self-checkout terminals in its 2,300 stores.
This new technology is estimated to cost in the range of $16 million to $20 million. Albertson’s feels that this may give them a needed edge to compete to lower its long run costs, and speed up the checkout process. Albertson’s also has also taken steps to boost it average sales. Albertson’s goal is to fill every shopping cart to as full capacity as possible, as well as getting to know their customers a lot better. They have installed have installed a $50 million NCR Teradata where house in order to analyze customer data, and what type of products certain customers primarily purchase. They then plan to use their customer loyalty cards, so that they can match individual buying preferences against store inventories.
Also through technology this data is available for analysis minutes after customers leave the store. This is a very valuable resource, because now Albertson’s may be able to reach its goal of having the right products, on the right shelves, at the right time. Albertson’s also has the technology to launch counter strikes when Wal-Mart tries to open stores in a nearby area. They do this by offering special promotions, as well as price reductions to their most valued customers in order to keep their current clientele. Albertson’s has also implemented software that will maximize their profits by counterbalancing price in relation to demand.
This software will also determine, which products need to be either raised or lowered primarily on the ideas of supply and demand. What is also very interesting about this software, is that it will give a comparable price rating of products at Albertson’s to those at Wal-Mart. it will then lower prices in order for customers to shop Albertson’s as opposed to Wal-Mart. Overall, Albertson’s is taking many steps in order to try, and successfully compete with Wal-Mart.
Even though a lot of these new information technologies may cost substantial amounts of money to implement, in the long wrong it may be for the best for the continued growth of Albertson’s. The thing that we must begin to ask ourselves is whether technology will be enough for Albertson’s to compete with is long time nemesis, the king of all retailers Wal-Mart.