Business

3 Predictions for the Future of Retail – from the CEO of Walmart

What will shopping be like in 10 years? No one knows all the details (that’s exciting!), but one thing is for sure: it will be very different than it is today.

Editor’s Note: This piece by Walmart CEO Doug McMillon was originally published Jan. 6, 2017 on the World Economic Forum’s website.

History is clear about that. In the mid-19th century, most people in the U.S. were shopping at small markets. They would tell the manager what they wanted, and then wait for the item to be retrieved from the back or from the supplier. After that came the urban department store, supermarkets, then strip malls and discount stores.

Today, the pace of change is rapid. Ten years ago most customers were reading about the original iPhone, and wondering whether it would be useful. Now they expect to order something on their mobiles, have it delivered or pick it up in store – often on the same day, in a few hours, or even in a few minutes.

It’s up to retailers to adapt to these changes – and in some areas even lead the way – or they’ll fall behind and disappear.

Here’s what customers can expect their shopping experiences to be like 10 years from now:

1. Customer empowerment and even greater influence
Customer satisfaction has always been the number one goal for retailers, and in the future, customers will be more empowered than ever to drive the change they want, as they get more control over their shopping experience.

Technology – the internet, mobile and analytics – is being used to do anything and everything a customer doesn’t want to. Customers want to explore. But they need to have easy access to items they choose to use all the time. The historic trade-off between price and service has been altered by technology and customers expect to save time and enjoy the experience while saving money. They’ll fulfill their everyday needs – items like laundry detergent, paper, light bulbs, grocery staples and shampoo – in the easiest way possible through a combination of stores, e-commerce, pick-up, delivery and supported by artificial intelligence. Customer desires – think emerging fashion, fresh produce, and items they’ve never seen before – will still be fun to explore in stores as well as with technology (think virtual reality).

Retailers that provide a truly unique, enjoyable experience and prepare their associates to provide excellent service will have the advantage. At Walmart we already see the value customers place on personalization and convenience, through our success with grocery pick-up and delivery in several markets around the world.

With the growth of the internet of things, customers will enjoy an increasingly connected or “smart” shopping experience through a network of connections linking the physical and digital worlds into an ecosystem of devices, including vehicles, stores and software. The internet of things, drones, delivery robots, 3D-printing and self-driving cars will allow retailers to further automate and optimize supply chains too. Both sides of the equation – demand and supply – will change dramatically.

In addition, customers will continue to demand transparency around pricing and the supply chain. They’ll have less time to research the products they buy – but they’ll care even more about how they are sourced. They’ll choose to shop with retailers who provide that transparency so they can feel good about the items they purchase. This will require retailers to work with manufacturers to source items responsibly and sustainably. Retailers who do this and share the information will further earn customers’ trust.

2. I’ve seen what you have and I want it, too
Customers all over the world now know, and can see, what people in other countries have, and they want access to it all. And they want it now. Chinese customers want access to Louis Vuitton bags from France and milk from Australia. Not long ago on a visit to Nigeria and Ghana, I asked one of our local store managers what his one wish would be. His answer: “I want you to put a Walmart Supercenter like the ones you have in the US right here and let me run it. My customers and my family have seen what you have and we want it, too. We want those items at those prices.”

As Tom Friedman taught us, the world got flat and now it’s moving fast. The world needs inclusive growth provided in a sustainable manner. People are demanding it.

3. Shared value
With all these changes, retailers will only survive if their business creates shared value that benefits shareholders and society. Social and environmental sustainability will be engineered into our systems, and that will strengthen the communities in which we operate, which will in turn appeal to customers. These changes, however, will require new levels of cooperation and collaboration between retailers and NGOs, governments and educational institutions. Basically, we’ll design retail and other businesses so that all stakeholders (as many as possible) benefit: customers, associates/employees, shareholders, the communities we serve and those in the supply chain.

At Walmart, we’ve already found that investments in training, education and wages for our associates have resulted in higher customer satisfaction. Our customers want our associates to have a great life and they want to see that reflected in their attitudes and the service they provide.

When it comes to environmental sustainability, retailers and policy-makers face new challenges with the increase in packaging waste and emissions that comes with the growth of e-commerce. Shipping packages one at a time is not only wasteful and environmentally unsustainable, it isn’t cost-effective. The demand for convenience will force retailers to come up with new ways to ship items – in batches vs. one at a time – that are better for business and the environment.

While all these changes pose big challenges for retailers, they also represent unprecedented opportunities to innovate on behalf of customers and create new job opportunities for retail associates. I can’t think of a more exciting time to be in retail, to be at the forefront of change and part of an industry that has the potential to provide a better life for millions around the world.

This piece draws on a new report, Shaping the Future of Retail for Consumer Industries, which can be read here.

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Innovation

A Look Inside Walmart's Next-Gen Test Stores

The world is navigating a cultural revolution into the digital age.

Meeting customers’ needs is critical as they adopt more digitally-driven lifestyles, expectations increase and increasingly shopping options do not require a trip inside a store.

With this in mind, Walmart is testing new approaches in two recently opened supercenters in Tomball, Texas, and Lake Nona, Florida. These stores were fully reimagined from a new layout to building and environmental enhancements to added technology that all improve the shopping experience.

Keep reading to learn more about these new retail environments. Or, if you’re in the area, drop by and look for yourself.

New Layout
We started with customer shopping behavior to reimagine the layout for these two stores. For example, services like the beauty salon and tech repair are adjacent to relevant merchandise. Health and wellness departments are consolidated to create a single destination. Baby, toys, kids' apparel and kids' shoes form a single destination to ease mom’s shopping journey.


Scan & Go
Speeding up checkout is critical to improving customer experience. So we’re testing Scan & Go technology that works both on personal smartphones and Walmart-provided handheld devices. Customers are greeted on their way into the store by a large bank of these Scan & Go wands, and new digital produce scales have been added to make scanning weighable items much easier. The Scan & Go fast pass checkout lanes allow customers to bypass the traditional checkout process, which makes a quick trip faster than ever.


SmartLife
New interactive projection technology allows customers to learn about connected devices (think Google Home, Apple TV, Nest, baby monitors and connected thermostats) and get answers to what is important to them. Since images are projected onto tables and walls, there’s no chance of accidentally damaging a product, and the product details can be updated more quickly through this new platform. This technology is found in the entertainment section of the store, as well as in hardware, baby, and health and wellness for relevant department items.


Integrated Pickup
Shoppers can use the outside drive-thru to pick up not just their weekly groceries, but also their prescriptions and Walmart.com orders.


Extended Aisles
Step into the Tomball Supercenter and you’ll find interactive screens offering access to an extended curated selection of online-only items in almost 100 categories. Customers can order products, pay with the rest of their basket at checkout and pick up two days later.


Appointment Setting and Ordering Technology
Need your deli order, fast? These stores test a new appointment and ordering kiosk system where you place your order, go shopping, then come back to quickly pick it up. If the initial test in the deli area goes well, it could be expanded to pharmacy, Auto Care Center, beauty salon or anywhere ordering and appointment setting occurs.


Next-Gen Call Buttons
Shoppers simply press a Wi-Fi-connected call button and wearable GPS-enabled devices alert associates that assistance is needed. Associates wearing these devices are trained in specific store areas and are on call to help in the furniture, paint, fabrics, sporting goods and bikes areas of the store.

So what’s the bottom line? By rethinking stores and testing new ideas with customers in real-life stores, we are improving customers’ experiences and making it easier than ever for them to get what they need as quickly and easily as possible.

Editor’s Note: You can learn more about Walmart’s in-store tests in this piece from Good Morning America.

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Business

We’re Taking a New Approach to Our Credit Card – Here's Why

There are times in life when we all need to make a big purchase: a new computer, a high-powered lawnmower, or even an engagement ring.

That’s where credit cards can help. They allow us to spread the cost over several months as opposed to paying for an item upfront.

Special financing offers have been around for years. One type works by offering you, the customer, no interest on a purchase if you pay off the balance before the promotional period ends. This can be a good deal, so long as you do pay off your purchase before the promotional period ends.

The issue is that, if you haven’t paid off the balance of your purchase by the time the grace period ends – let’s say that’s 12 months, for example – you may be stuck with a pile of interest that was building up during that time. So, even if you have just a fraction of the purchase price left to pay on day 366, you could owe 12 months’ worth of interest based on the balance. That means your wallet could take a significant hit.

The reality is most people’s lives are anything but predictable, and paying off a purchase within a set period of time doesn’t always happen as planned. We have responsibilities that weigh on us – tasks and relationships to juggle and, of course, a never-ending stack of bills to pay.

Whenever we can save our customers money and help remove unnecessary hassle or burden, we do just that. That’s why we’ve decided to simplify our special financing offer on the Walmart Credit Card and the Walmart Mastercard Credit Card.

With the new offer, you can now take advantage of no-interest financing for purchases, meaning that absolutely no interest accrues during the six- or 12-month promotional period.* It’s really that simple and straightforward.

We know that credit card offers can be complicated, but we don’t think they need to be. Learn more here.

*Editor’s note: The new promotional financing offer on the Walmart Credit Card and the Walmart Mastercard Credit Card includes six months zero interest for purchases made in store of $150 to $298.99 and 12 months zero interest for purchases made in store of $299 or more.

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Community

Virtual Construction That’s Helping to Build Real Jobs

At the beginning of 2016, Iowa Workforce Development and Hawkeye Community College in Cedar Falls came together to consider the statistic that just 2.3% of Iowa’s construction workers are women.

The construction industry has always been male dominated, but in a state where heavy equipment operators are not only in growing demand, but paid an average hourly wage of more than $23, they saw an opportunity.

Through its PROMISE JOBS program, Iowa Workforce Development works tirelessly to connect Iowans – many of them low-income women with families – with training services. Last year, Hawkeye Community College had a fleet of simulators specifically designed to put individuals behind the controls of a backhoe, bulldozer, excavator, wheel loader and other common construction equipment. And with a state grant from the Walmart Foundation, they had the funding they needed to mobilize.

From January through July 2016, the construction equipment simulator trailer made its way to all corners of the state, with stops at each of IowaWORKS’ 15 regional facilities. Anywhere from 150 to 500 Iowans turned out at each location to try their hand at the controls, gauges and equipment systems in a safe, in-cab environment, with supervision from trained instructors. In some instances, representatives from construction companies came out to connect with interested residents on the spot.

Like any industry, construction isn't for everyone. But this collaboration opened the door to the possibility of a new career path – and a better life – for Iowans. The demand for construction workers, regardless of gender, is high. So this collaboration addressed a genuine issue.

For many, it could mean a transition into higher-paying jobs, thus supporting their families and their futures. That’s a scenario where everyone wins.

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Community

Harvesting Hope and Relieving Hunger for a Military Community

Members of the U.S. military and their families are very special people who sacrifice everything to ensure our safety and freedoms are protected.

Sometimes those same people are sacrificing even more than they should – they’re worried about where their families’ next meals will come from.

Here at Harvest Hope Food Bank in Columbia, South Carolina, my job is to work with local governments and businesses to understand how we can best work together to serve those in need. Working here for over six years has given me a unique perspective on hunger and it’s allowed me to see a gap we can help fill to help our military community.

We have a large military presence in South Carolina. Our state is home to several military facilities, a number of veterans’ hospitals and one of the largest military populations in the country. We have over 50,000 active and reserve troops and over 400,000 veterans living or working in our state.

With that many military men and women living and working in South Carolina, and the fact that Harvest Hope serves 20 of the 46 counties in the state, it’s understandable that we might see a few on occasion. Everyone goes through difficult times, and sometimes you just need a little boost to get back on your feet. What troubled me was how many people with military ties we were actually serving – approximately 12% of the people we see each day.

My philosophy, as well as those who work with me, is there’s no reason anyone who puts their life on the line should ever need to stand in line for food. As someone who served nine years of active duty, it’s a cause near and dear to my heart. So I took action.

I found a study by the U.S. Government Accountability Office on the use of food assistance programs by active duty military. I saw that Feeding America had recently developed a partnership with the U.S. Department of Veterans Affairs to increase food access to veterans. Both of these backed up what I was seeing in my community and pushed me to find a more strategic way reach those men and women who’ve already sacrificed so much.

In 2016, with the support of our food bank’s leadership, we developed Operation Hunger Prevention (HP). This is Harvest Hope’s first large-scale campaign focused specifically on providing food relief to active duty military, veterans and their families. We were so excited when we received grant funding from the Walmart Foundation and Bank of America Foundation to help us get the pilot program up and running – and demonstrate further the actual need for these services. The best part? We could provide assistance to active military, veterans or their family members without any cost to them or the U.S Department of Defense.

This year, we were very fortunate to receive an additional $75,000 grant from the Walmart Foundation, and take Operation HP into a stage two pilot. It will allow us to expand the program out to county veterans affairs offices and ease the burden of having to search for additional funds and sponsors. Because of this funding, we’ll have more time to focus on helping our military community and their families. It will help us provide an estimated 375,000 additional meals.

I’m proud Operation HP is able to provide additional support for such an important part of our community – relieving stress and improving overall military readiness of our troops. These men, women, and families put a lot out there to protect our freedom and ask so little in return. This is just one small way of saying thank you.

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