Business

What is Seamless Shopping? Q&A with CEO Doug McMillon

The following conversation with Walmart CEO Doug McMillon is excerpted from our 2016 Annual Report, which was released today. Read the report.

Q: We’re now living in a new period of retail disruption, largely driven by rapid technological advances, and that change is likely to accelerate even further. What does the future look like for Walmart?

A: Our work starts and ends with the customer. Technology has changed customer expectations. Customers used to compare us with the store down the street; now they compare us with the best online shopping experience. And beyond retail, they compare us with every business they interact with in their lives. They compare our pickup experience to the speed and friendliness of the best drive-through. They compare our checkout process to the ease of paying with an app.

Customers should be able to shop on their own terms – in a great store or club, with a quick pickup stop on the way home from work, or with items reliably arriving at the front door. And customers want to have some money left over to put toward their priorities: an experience together as a family, a special gift every once in a while, or savings for a rainy day.

Retail is not just about putting items on a shelf anymore. It’s about fighting for our customers, cutting out the hassles and advocating for them on price, too. We’re moving beyond just selling products to being the brand customers rely on to make their lives simpler and more meaningful as they save money.

Q: You’ve mentioned “seamless shopping” before. What does that mean, and how will Walmart deliver?

A: It starts with unparalleled assets that only Walmart has – our 2.3 million people; more than 11,500 retail locations; e-commerce websites and apps; and a dynamic, optimized supply chain. But it also requires new capabilities and fresh thinking.

This includes new digital tools for customers and frontline associates, as well as back-end software and platform work that benefits the entire enterprise. The use of data, algorithms, advanced forecasting capabilities – and more – is of extreme strategic significance.

We will put these pieces together in a way no one else can.

Ultimately, customers don’t care about what channel they’re shopping in, or about how we deliver them a product or service. They simply know they’re shopping with Walmart.

Q: What is Walmart already doing to make progress against this seamless shopping strategy?

A: To help our associates succeed and better serve our customers, we’ve made big changes – including investing approximately $2.7 billion over two years in higher wages, education and training to make Walmart U.S. a better place to work and shop. We’re already seeing positive results: our fourth quarter of fiscal 2016 marked six consecutive quarters of positive comps and five straight quarters of positive traffic at Walmart U.S. Everything we’re doing in omnichannel depends on customers having great interactions with us in our stores.

We're also accelerating e-commerce and technology advances globally. We expanded Online Grocery shopping to new markets, ramped up in-store and in-club pickup, fully acquired the Chinese online retailer Yihaodian, and began to add new mobile services such as Walmart Pay. We developed a technology platform that we can scale across the business. We improved our fulfillment capabilities with new centers that are helping us get orders to customers’ doors faster and more efficiently.

Q: It’s clear what these strategic investments mean for customers. How will they affect associates and the communities where Walmart operates?

A: As we work to win with our customers, we will also create a great place to work. We will create tremendous opportunities for people from all walks of life, with all kinds of skill sets and education levels. We’re striving to create a true meritocracy. No matter where you start from or what your unique and special characteristics are, you can fulfill your potential here. We believe in opportunity and that hard work, dedication and talent should be rewarded.

We will also use our size, mindset and policies and help make the world a better place. We create opportunity throughout our global supply chain – on farms and in factories, by buying more from women-owned businesses, by hiring veterans and by strengthening the retail industry workforce.

We work to be more sustainable, both in our own operations and in our supply chain. We have three big goals: creating zero waste, running on 100 percent renewable energy and selling products that sustain people and the environment. And we give back to the communities we serve – supporting American manufacturing, preparing for and responding to natural disasters and fighting hunger.

Q: What does this growth plan mean for investors?

A: We will win with a differentiated, disruptive strategy and a foundation of operational excellence. As we do, we believe shareholders will benefit by receiving above-average returns.

Although this will be another year of foundational investments, we believe we will soon be growing faster than the retail market. We are a growth company; we just happen to be a large one.

The road ahead will not always be easy, but by being customer focused, hungry, fast and accountable, we will win and have a good time doing it.

6 Comments

Innovation

Sharing the Love for Grocery Pickup

Of all the activities we cram into a week – work, school, raising children – grocery shopping sometimes gets squeezed in between.

Whether we’re scribbling our shopping lists on scraps of paper or keeping inventory on our phones, many of us find it challenging to add in one critical thing: finding the time to shop.  But what if you could get your grocery shopping done quickly and easily, without having to add more time or take away from other activities that you’d rather spend your time on?  That’s precisely what we’re doing with grocery pickup, a service I wrote about last year. Saving time – and saving money – are both incredibly important to our customers and with our online grocery shopping option, we help them achieve both.

Judging from many of the reactions on social media, customers who use the service are very excited about it:

At the start of this month, we offered free grocery pickup in more than 20 markets, and we’ve continued to see more and more customers use it across the country each week. By the end of April, we’ll expand the service to eight additional new markets, and we’ll add even more locations throughout the year. Here’s where we’re going with it this month:

  • We’re launching free grocery pickup in Kansas City; Boise, Idaho; Richmond and Virginia Beach, Virginia; Austin, Texas; Provo, Utah; Daphne, Alabama; and Charleston, South Carolina.
  • We’re also doubling the number of store pickup locations in markets like Dallas, Houston and Atlanta, where this convenient service is already offered. 

Customers tell us they’re excited about online grocery because they’re putting the time they’re saving back into meaningful parts of their lives (like spending time helping their kids with homework or having a date-night with their spouse). They have the option of shopping whenever and wherever they want – adding to ongoing lists all week, or placing a quick order through our mobile app – putting them in control of the entire process, all the way down to when they pick up. Even better is that our grocery pickup service is 100% free to use. We offer the same everyday low prices found in our stores, and there are no hidden fees.

Ninety percent of our customers are repeat users, and more than 90 percent of our online baskets include fresh grocery items (dairy, produce or meat). That’s exciting because it means that our personal shoppers – associates who are carefully selected and highly trained to pick these foods as if they were choosing for their own families – must be working hard to get things right while strengthening the trust customers place in us to shop for them.

Our personal shoppers are full-time Walmart associates and fully dedicated to this service. They get to know our customers by name and learn what they like.

While grocery pickup isn’t a service our customers specifically asked us to provide, we’re hearing that for many of them, it’s a service they now can’t live without. That’s why I love my job. There’s a ton of satisfaction I take away knowing that we’re helping people by making shopping faster, easier and more convenient. And we do that only as Walmart can, by bringing together digital shopping experiences with our physical stores.

Helping customers save time and money has always been our mission and from their reaction to our service, we’re on the right path. 

25 Comments

Sustainability

In eCommerce Packaging, Sometimes More Equals Less

About a year ago, Walmart assembled a team from all over the company to focus on ways we could continue improving the online shopping experience. The feedback we received was tremendously helpful, but there was a surprise. An overwhelming majority of customers took it upon themselves to elaborate on an unsolicited topic: The size of our boxes.

Over and over again, our customers expressed a desire for us to reduce our packaging. That’s what they were talking about, so we immediately shifted our focus to follow their lead. And that shift has created the potential for huge results.

In the world of e-commerce, several factors have to be taken into account when reducing packaging. Because these items are being shipped great distances and handled multiple times, we must ensure the proper amount of cushion and protection. Ultimately, it’s about the product arriving at its destination undisturbed.

Through data analysis and extensive testing of potential solutions, we’ve developed a way to improve cardboard box utilization by more than 30%, without sacrificing product protection. If scaled over our entire e-commerce operation in the U.S., this effort has the potential to reduce cardboard box consumption by 7.2 million cubic feet annual, roughly enough to fill 82 Olympic-size swimming pools. It also translates into the ability to pack more products into the tractor-trailers we put on the road.

We took everything from order trends and history, to the size of boxes used at our fulfillment centers, into account. We developed several new box sizes and put them to the test – first with a couple of hundred orders, then with 10,000 orders. Then we piloted the program across an entire fulfillment center and, ultimately, concluded we could maximize efficiency by expanding our assortment of box sizes from 12 to 27.

Soon, we’ll implement the program at a second e-commerce fulfillment center and, eventually, across the organization. But the key to success will be our ability to customize the program to the needs and orders of every facility. In fact, this program will have to be continuously monitored and adjusted to meet changing needs. What is achievable at one facility with an assortment of 27 boxes may require an assortment of 40 boxes at another. And we’re up to that challenge.

The bottom line is, we recognized an opportunity by listening to our customers, and we acted on it. Great things happen when you take time to listen.

1 Comment

Innovation

This Store is Helping Reimagine the Supercenter

Last year, supercenter #5260 in Rogers, Arkansas, got a facelift. Added into the refreshed look were several new approaches to technologies, services, products and layouts, which are currently being tested with customers. Early reports are positive, but it’s too soon to tell what’s working and what isn’t. What’s clear: Things that seem straightforward could show up in new stores or remodels. Store 5260 is simply the first step toward the supercenter of the future, but it’s critical to informing upcoming tests.

Room to Play: The electronics and entertainment areas have a sleek, modern look that customers say feels very welcoming and on-trend. “One of the things that we noticed early on as people walk by electronics is that they stop and look, and then they get drawn in," said Sherry Curtis-Swenson, the store’s manager.

A New Angle on Fresh: A reorganization (along with improved sight lines and angled aisles) puts berries — a growing category — in the front of the department. Bananas, already a huge draw, are toward the back to help lead customers through. Purple signage in Fresh and throughout the store connects to an increase in organic products.

Car Care, Customer Care: Along with new digital menu boards and signage in automotive, there’s a comfortable customer waiting area — furnished with items from Walmart.com. Customers can watch TV, enjoy a coffee, charge their phones, and see their cars being serviced.

Pickup, Up Front: In-Store Pickup and Walmart Services share space up front at Store 5260. It’s clearly marked so customers can find it and get their orders quickly.

Check Out Your Way: There are multiple options for checkout. Scan & Go supplies a wand so customers can scan items as they’re shopping. Hybrid registers can be self-service or manned by associates, depending on the need. And high-velocity checkouts — where a cashier scans items while the customer moves through the line to pay — are more than three times faster than conventional checkouts.

One-Stop Baby Shop: The new baby department combines it all in one space. There’s even a stroller garage for hands-on tryouts. “Customers love being able to move the strollers around,” Sherry said.

Local Eats: A local food truck operator, Big Rub BBQ, has restaurant space in the store, with lots of glass and natural light — and even seating on an outdoor patio! 

Editor’s note: A version of this story originally appeared in Walmart World, the magazine for Walmart associates.

5 Comments