Business

Read Walmart CEO Doug McMillon’s 2017 Letter to Shareholders

The following letter from Walmart CEO Doug McMillon was taken from our 2017 Annual Report, which was released today. Read the report.

Dear shareholders, associates and customers:

As I sit down to write this year’s letter, I’m feeling proud of the progress we’re making at Walmart and, most specifically, the passion and hard work exhibited by our associates. I’m encouraged by the way we’re moving with greater speed to better serve customers.

Our business is getting stronger. In the U.S., we’ve delivered positive comp store sales for ten consecutive quarters and we’re hearing from our customers that their experience continues to improve. Sam’s Club comp sales improved throughout the year and members are increasingly using our digital tools like Scan & Go and Club Pickup. Outside the U.S., 10 of our 11 markets posted positive comp sales this past year. Across our business segments, e-commerce growth is accelerating. Our strategy to serve customers through e-commerce and our stores in a seamless way is gaining traction. The momentum we’re seeing is real and I’m excited about what the future holds.

We’re clearly living in a time of transformative change. The world is moving faster and the magnitude of the changes, and their influence on business, seem larger than I can remember. In retail, the things made possible by technology are fundamentally transforming this industry. These changes are creating compelling ways for customers to save time and gain easy access to products and services they didn’t have before. At Walmart, we’re harnessing the power of technology and the investments in our associates to create new ways of serving customers and provide associates with more opportunities to grow their careers.

We’ve been preparing ourselves to take advantage of the opportunities presented and we have four objectives that we’re focused on this year. First, we want to make every day easier for busy families. Customers are time-crunched, so we want their shopping experience with us to be fast and easy — truly seamless — in all the ways they want to shop: in stores, on their mobile device, or through pickup and delivery. I’m excited by many of our recent initiatives — like the free 2-day shipping offer with a $35 minimum order from Walmart.com, the expansion of online grocery around the world, and Sam’s Club’s launch of Scan & Go across the U.S. — because of the convenience these initiatives provide. The strategic acquisitions of Jet, ShoeBuy, Moosejaw and ModCloth, as well as the alliance with JD.com in China, provide customers with a broader assortment as well as more ways to save time and money. It’s truly been a significant year of progress on this front.

Our second key objective is to change the way we work. We’re focused on becoming more of a digital enterprise. We’re working to increase productivity with more efficient internal processes and creating more real-time information at our fingertips, supported by more advanced analytics. We’re providing in-store associates with the tools they need, like apps and tablets, to make it easier to gain insight into our performance. Our goal is to increase our speed, effectiveness for customers and productivity throughout the business. We’re also working to strengthen the performance mindset of our culture and fight bureaucracy that can plague large companies. A strong and effective culture is foundational to success and we’re shaping ours to drive performance and create even more opportunity for our diverse group of associates in an inclusive work environment.

Third, we will deliver results and operate with discipline. We were founded on an everyday low-cost mentality but we think we have opportunities to work in new ways and find a path to a lower cost base. This is vital for our future. We’ll be smart with how we allocate capital to drive long-term value for our shareholders. We’re after efficient growth. We will focus on growing more through e-commerce and comp sales in our current store fleet and rely less on new store growth in the U.S. We’ll also continually look at our portfolio to make sure we’re positioned to win. We’ll invest in our core business with store remodels, technology and customer initiatives like online grocery and pickup, while at the same time being open to divest non-core assets if it’s in our best interest.

The fourth objective is to be the most trusted retailer. During this time of change, customers are watching the companies they spend their time and money with more closely than ever. The way we earn their trust is through our associates doing the right thing every day — being creative, curious, ethical, service oriented and embodying our purpose of making lives better for others. If everyone could see inside the company I’ve come to love, they would feel even better about the company.

We’re doing things people would expect from Walmart: focusing on lowering prices — not by cutting corners, but by being better at delivering great items more efficiently than our competitors; and constantly innovating to save customers time as well as money. We’re also doing things that might surprise some people. We’ve made significant investments in our associates, providing the career opportunities they deserve and skills necessary to be successful at Walmart or wherever their career takes them. Over the last decade, we’ve become one of the most environmentally sustainable retailers (and companies) in the world and we’re raising the bar even higher. We’re investing in making our supply chain safer and more transparent so customers can be confident that the products they purchase are sourced the right way. And, we have embraced the journey towards the concept of “shared value” as espoused by Dr. Michael Porter of Harvard Business School, which challenges us to create a business model that is not just good for shareholders but better for everyone: customers, associates, suppliers, communities and society in general.

We’ve worked hard over the years to earn the trust of those we serve and do business with around the world. By no means am I saying Walmart is perfect. We’ll make honest mistakes along the way, but we won’t let up until we get it right. Our purpose is simple: we save people money so they can live better. We take both aspects of our purpose seriously.

We want to thank you for believing in us…for investing in our future. We are a company of the future. As I stated earlier, we’re operating from a strong foundation built by those before us and taking action aimed at strengthening our business this year and beyond. We’ll continue to strengthen our stores around the world, we’ll continue to build our e-commerce and digital capabilities, and we’ll put them together in a way that saves customers time and money. And as they choose to shop with us, we’ll be doing things behind the scenes to create shared value for all so they are confident that their trust in us is well-placed.

Honored to serve,


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Business

Walmart's Secret Advantage to Serving You This Holiday Season

The holiday season is a busy time of year at Walmart.

From October through December, hundreds of millions of Americans will visit more than 5,000 Walmart locations to shop for gifts, grab last-minute items for holiday meals and take advantage of special deals that come but once a year.

Now, more than ever, Walmart and its associates will be ready for them.

Based on the success of a similar effort in 2016, the company announced it will be offering extra hours available this time of year to our current associates, rather than hiring thousands of seasonal workers.

“Our associates make the holidays come to life in our stores, and we are thankful for everything they do,” said Judith McKenna, Chief Operating Officer. “As we head into our busiest time of the year, we know associates are ready to deliver for our customers and help give them a memorable and affordable Christmas.”

These extra hours will help staff traditional roles like cashier and stocker, as well as newly created, technology-empowered positions in Walmart’s growing online pickup department.

Here are three big reasons why the company is investing in its people for Holiday 2017:

  1. The way customers shop is rapidly changing. Walmart expects new services like Online Grocery Pickup to take off with the holiday cooking crowd, making the company’s specially trained personal shoppers an even more indispensable part of the team.
  2. The company’s Holiday Helpers program was a huge success last year, and in 2017 Walmart is increasing the number of Helpers across its fleet of stores. These associates are dedicated to helping customers get through stores faster by finding the shortest checkout line and opening registers as needed. They’ll even run to grab items customers may have forgotten, so they don’t lose their place.
  3. Walmart has increased its focus on service through new training, tools and technology. Thousands of associates have completed the company’s Pathways and Academy programs, which prepares them to more effectively serve customers during this busy season.

“The holidays are a special time of year for our customers and associates,” McKenna said. “This is what working in retail is all about, and we know our people have the passion to do even more this year.”

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Business

Found: The Story Behind Our New Natural Beauty Routine

If you’ve ever tried shopping for naturally-inspired beauty products, you know the struggle.

They can be expensive. They’re sometimes not as effective. Makeup colors can be limited, and guess what? That means matching skin tones is a challenge.

As a buyer for cosmetics at Walmart, I’d begun noticing an industry trend, both from our customers’ feedback and focus groups: People care more than ever about the ingredients in the products they’re using. But this was also personal. I’m passionate about using natural ingredients in my home, and I was having trouble finding beauty products that looked good, felt good, and wouldn’t break the bank.

That was last year. Little did I know that a solution was soon to be found.

My team started looking into what it would take to develop naturally-inspired skincare and cosmetics, and that’s when we discovered Hatchbeauty, a company specializing in everything from the development to the marketing of innovative beauty products. They were eager to marry their beauty expertise with our retail expertise to create something truly unique and different – Found, a new line of naturally-inspired beauty products exclusive to Walmart.

Every item within Found highlights a “miracle” ingredient used in ancient beauty rituals. For instance, one of my favorite products, the illuminating drops, uses passionfruit oil to lock in moisture and nourish your skin. We’ve brought these ingredients to life to give customers an alternative featuring natural ingredients that can deliver the same results as traditional, high-end beauty products.

Helping develop Found has been one of the most meaningful achievements in my career, because it has been an intersection where my personal passion and my professional purpose collide. Walmart is committed to selling more products that benefit people and the planet. Found’s 130-product line is never tested on animals, and there’s even a Not Found list featuring what you won’t find in the products, like parabens and phthalates. Every product is 90-99% natural, and the percent of natural ingredients is front and center on every product.

Working with Tracy Holland, founder and CEO, Diana Madrid, COO, and Ben Bennet CCO, was a phenomenal experience, but I was impressed with the engagement from everyone on their team. From the owners to the brand managers to the chemists and product developers, everyone encouraged diversity of thought and inclusion, which made it possible for the customer to be the focus of our development process. I can’t count the number of times we changed direction on formulas, shade range or packaging based on customer feedback. For instance, we received customer feedback that skincare can be a confusing category to shop, so we broke down every item into one of three steps: cleanse, treat and hydrate. Found demystifies the process and helps customers focus on key items to build their regimens.

When I gave my first presentation to our leadership team, I asked them how my makeup looked, and they couldn’t believe everything I was wearing was from our naturally-inspired line. It’s one thing to develop these products – but it’s another thing entirely to actually wear the products and love them! Found has truly been a chance for me to help our customers save money and live better.

You can find Found products at select Walmart locations, Walmart.com and coming soon to Jet.com.

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Business

One Year Ago, We Welcomed Jet … and the Winners are Our Customers

When the Jet.com deal closed one year ago, many people asked, “Why Jet.com?”

At the time, we’d strengthened our e-commerce capabilities and were looking for the right partner to accelerate our efforts. So while it was a logical question to ask, the answer was really quite simple: Jet was the right partner at the right time. Both Walmart and Jet have a deep commitment to serving customers, and saving them money and time. By coming together, we could do all these things, better.

That’s exactly what we’re doing. In August, we partnered with Google for voice shopping. Earlier in the year, we launched Easy Reorder, a feature in our mobile app that helps customers easily access a list of items they purchase most frequently. We also launched free two-day shipping on millions of items – without a membership fee. And we’ve steadily expanded our merchandise assortment. This time last year, we had just reached 15 million items available on Walmart.com and today that number is 67 million items and rising.

We’ve welcomed other innovative online retailers to the Walmart family, including Bonobos, Hayneedle, Modcloth, Moosejaw and Shoes.com. Each of these acquisitions has helped strengthen our expertise in key product categories, provide an expanded assortment and a way to reach new customers. We’re able to provide these new companies the benefit of Walmart’s scale to lower their operating costs, which allows each to invest in the customer experience and grow the business.

We’re also seeing the power of our stores and e-commerce coming together to serve customers. We’re removing friction from our shopping experience – focused on making it fast, easy and fun for customers. Walmart customers now receive a discount for store pickup rather than home delivery, which we can offer by using our vast supply chain and store network to create efficiencies. With stores located within 10 miles of nearly 90 percent of the U.S. population, it’s convenient for many of our customers, and saves them money.

In addition to 1,000 grocery pickup locations in the U.S., we’re testing associate delivery of Walmart.com orders in a few stores. By the end of the year, we’ll have approximately 100 automated pickup towers in stores across the country, where customers can pick up their orders within a matter of minutes. And we’re excited about the growth we’re seeing across our e-commerce portfolio. One important metric, Gross Merchandise Value, grew 69 percent in the first quarter this year, and was just as robust the next quarter at 67 percent. That’s proof customers are responding.

Marc Lore, who founded Jet, and now leads our U.S. e-commerce efforts, has proven to be the digital embodiment of Walmart. He has a fanatical focus on serving customers and creating the next generation of everyday low prices. It’s energizing how he and Greg Foran, CEO of Walmart U.S., and their teams continue to partner closely to delight customers in new ways across our apps, sites and stores.

I’m excited about how far we’ve come together, and even more excited about what’s ahead. Here’s to another great year of finding more ways to save our customers time and money, and delivering an easy and enjoyable shopping experience.

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Business

An Expanded Way to Pay for Online Grocery Pickup

Who doesn’t want to save time? Find an easier way to check things off their to-do lists?

Let’s say there is a solution out there … but it’s available only to some people, not all of them. And it’s dictated by the way you pay. We say: not anymore.

You’ve told us you love Online Grocery Pickup – it’s putting you in charge of your schedule and how you shop. We are so excited that it’s saving you time and money.

We think this is a service that should be available to everyone. That’s why we’re introducing an option that allows customers using EBT benefits to use Online Grocery Pickup and pay when they pick up their groceries.

Right now, we’re offering this expanded way to pay in one store in the Houston area and four more around Boise. And we’ll be bringing it to more and more markets through the holiday season and beyond.

Access and convenience have long been a part of who we are. Our company was founded on the principle of bringing affordable goods to people, and since opening that first Walmart store more than 50 years ago, we’ve been relentless in reimagining the way people shop.

Online grocery pickup service is one of the latest ways we’re doing that, and we’re excited to continually see comments from our customers like these:

Everyone deserves this kind of satisfaction. Convenience shouldn’t be dictated by the way you pay. Your to-do list continues to grow, so ours does too. We’re committed to bringing you options that let you take charge of your time.

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