Reorg A Potentially Great Advance For Merged Channel

When Wal-Mart confirmed a major E-Commerce reorganization on August 12—including the loss of chief Steve Nave and global E-Commerce exec Raul Vazquez—it was said that E-Commerce management in developed countries will now report to the senior in-store executive for each country. That's a change from those positions reporting into Global E-Commerce boss Eduardo Castro-Wright. If we set aside the personnel issues—the loss of execs such as Nave will likely hit hard—the strategy involved here is both compelling and actually the right approach.

One of the most vexing merged-channel issues today is how to compensate online and in-store execs so they don't solely push their primary channel. By having the chief of Wal-Mart's U.S. stores, for example, also responsible for sales in the U.S., that compensation/conflict-of-interest issue goes away. Well, it theoretically could go away, assuming the U.S. president makes sure the compensation of various direct reports is similarly merged. The ideal here is for everyone to be focused on selling Wal-Mart products however they can, with no financial incentive to push mobile, online, in-store, call center or any other specific channel. To the extent that this reorg helps bring the chain closer to that goal, it's a good thing.