1. What does the public’s reaction to Wal-Mart’s Project Impact suggest about expectations for discount stores?

2. What are the inventory control implications for making drastic changes like Wal-Mart undertook?

3. React to the following statement: “Crowded and cluttered stores send a signal to shoppers that there are bargains to be had. Cluttering store floor space and increasing the height of shelves attracts bargain hunters.” Do you agree with this perspective? Why or why not?

4. Discuss how a similar, cluttered approach would be perceived by shoppers at a higher end department store like Nordstrom’s (Nordstrom, Inc., Seattle, WA).

Wal-Mart (Wal-Mart Stores Inc., Bentonville, AR) has been known as the iconic store that sells thousands of items at low costs. Over the years, however, one recurring theme from customer complaints was the cluttered feel to its stores, with items stacked and stored nearly everywhere, clothing racks thrust out into the aisles, and a general feeling of (barely) controlled chaos on the shopping floor. In 2008, Wal-Mart decided it was time to listen to its customers and launched “Project Impact,” aimed at uncluttering stores through extensive store redesigns to get products out of the way. Wal-Mart spent hundreds of millions of dollars pushing Project Impact across its U.S. locations, and the initial response from its customers was that they loved the changes.

There was just one problem: Sales dropped. In fact, they dropped severely. Customers who supported the redesigned stores and the new, sleeker feel of the shopping environment stopped spending their money at the stores. Wal- Mart removed 15% of inventory from their stores and the response of competitors like Dollar General (Dollar General Corporation, Goodlettsville, TN) and JCPenney (J. C. Penney Company, Plano, TX) was to add shelves and fill up empty wall space with jewelry and electronics counters. Independent estimates suggest that by the time Wal-Mart abandoned Project Impact in 2011 and began restocking their stores to their former, cluttered level, the company had lost nearly US$2 billion in an effort to make its customers happy. In-store sales at Wal-Marts across the United States did not return to pre-remodel levels for nearly three years.