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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Community

The Delivery That Saved the Day for One Florence-Affected Community

Fielding phone calls. Answering emails. Organizing an airlift. Just a typical day for your average Walmart market assistant.

On Sept. 18, Misty Amos, who works as an assistant for Walmart stores in the Eastern region, received a call from Walmart’s Emergency Operations Center.

Days before, Hurricane Florence had ripped through North Carolina’s coast. With flood waters rising, over a hundred people had evacuated their homes and found refuge in a shelter in Fairmont, North Carolina. One problem: The surrounding roads were flooded, leaving the shelter completely cut off from food and supplies.

The 145th Airlift Wing of North Carolina’s Air National Guard had decided to deliver much-needed goods to the shelter via Blackhawk helicopter, but they needed supplies. They called Walmart for help, and that’s where Misty came in.

Misty’s Market Manager was out of the office leading a team of associates who were helping a local store return to normal so when the National Guard request came her way, it was up to Misty to help mobilize associates to help on the ground. She worked with a local store manager to collect supplies for 130 men, women, and children – including a 4-week-old infant who was refusing formula but would accept whole milk.

First, the associates at store 2058 in Raleigh loaded up carts with food, toiletries, underwear and baby supplies. They were even able to find shelf-stable whole milk for the baby. The team boxed the items, grouped the merchandise into pallets, and loaded it all into a U-Haul, which they then delivered to the Air National Guard at Raleigh-Durham Airport.

Meanwhile, a local Sam’s Club was also on the case. Club associates moved with speed to load a Red Cross vehicle with donations for the shelter.

Wait, were the Walmart store and Sam’s Club duplicating efforts? Was there going to be more merchandise than the helicopter could handle?

No problem, said the Guard unit. We’ll just organize a second drop.

It’s a good thing they did. Right before the second chopper took off to make the delivery, the Red Cross reached out to say that not too far from the shelter, a medical facility was in desperate need of blood donations. The Red Cross was able to add blood supplies to store and club donations, and the helicopter made a slight detour to deliver blood, too.

Maybe the most surprising part of this story? This whole mission – from the time the call came into the Emergency Operations Center to the time the helicopter touched down in Fairmont – took four hours.

Yes, you read that right. Four hours.

This is just one example of partnership during this multi-state disaster. Misty set her coworkers into action, and by working cross-functionally with the public sector and NGOs such as the American Red Cross, Walmart associates were able to make a meaningful difference to neighbors who had suffered unimaginable loss.

Misty and her team were able to deliver a bit of dignity to the families at the shelter. When asked about the airlift, the 23-year associate downplays her efforts. Having worked for the company during Hurricanes Katrina, Harvey, and Maria, she knows disaster recovery has become an integral part to the way we do business.

“We’re Walmart,” she says, “It’s just what we do.”

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Business

Walmart’s New Digital Book Offering is Worth Exploring

As an avid book lover, I couldn’t be more excited about the new digital book options now available through Walmart eBooks by Rakuten Kobo. As we begin this new partnership, I wanted to share a little about who we are.

Rakuten Kobo was created in 2009 to empower booklovers to read more by delivering the best digital reading experience possible. We began internationally where we built everything – infrastructure, apps, payment processing, e-commerce stack – knowing we would be operating in multiple countries, in multiple currencies and in multiple languages. This enabled us to quickly expand all over the world. Today, we deliver content in 190 countries and have localized online stores in 24 of those countries.


Although we are a company that focuses on selling a digital product, retailers and store experiences have always been an important part of the mix in every country we operate in. That’s why we’re excited to partner with Walmart as we grow in the U.S. market. Together, we can provide even more people with a great reading experience, whether that’s print, digital or both.

I say both because we know that digital vs. print isn’t “either or.” Today, about one in four books sold in the U.S. is an eBook and in some categories like romance, mystery or fantasy, it’s more like one in two or three. Our best eBook customers tell us they also buy a dozen or more print books a year, as well as digital audiobooks.

We are a company devoted to reading, and we’re looking forward to getting to know Walmart customers who already turn to Walmart for great books at great prices. With our catalog of more than six million books, we know you’ll always find something great to read.

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Innovation

How VR is Transforming the Way We Train Associates

If you’ve ever tried on a virtual reality (VR) headset, you’re familiar with its ability to recreate real-life experiences. Even a rollercoaster ride simulation has the potential to make your stomach drop.

VR tech has taken everything from journalism to pro football quarterback training to the next level. And last year, Walmart introduced VR to the world of employee training and development by using the technology to upgrade training at Walmart Academies nationwide. With the huge success of that program, the company is now providing Oculus VR headsets to all stores in the U.S. to bring the same level of training to more than 1 million Walmart associates.

“The great thing about VR is its ability to make learning experiential,” said Andy Trainor, Walmart’s senior director of Walmart U.S. Academies. “When you watch a module through the headset, your brain feels like you actually experienced a situation. We’ve also seen that VR training boosts confidence and retention while improving test scores 10 to 15 percent – even those associates who simply watched others experience the training saw the same retention boosts.”

Starting next month, VR training will begin its launch across the country, sending four headsets to every Walmart supercenter and two units to every Neighborhood Market and discount store. With more than 17,000 Oculus Go headsets in stores by the end of the year, every associate – including those on the floor who interact with customers the most – will have access to the same training that their managers and department managers do at the Academies.

Brock McKeel, senior director of digital operations, worked with Andy to bring VR training to associates, and said there are already more than 45 activity-based modules using industry-leading software provided by STRIVR. STRIVR’s platform delivers realistic, repeatable and scalable training content, which helps associates learn information more quickly and retain it better.

“We are entering a new era of learning, and Walmart continues to lead the way,” said Derek Belch, CEO of STRIVR, which worked with Walmart on its initial launch of VR in Academies last year. “The power of VR is real, and when offered as a cornerstone of learning and development, it can truly transform the way an organization trains its people.”

Walmart plans to use VR to train associates in three main areas: new technology, soft skills like empathy and customer service, and compliance.

VR training is particularly helpful for learning new tech. In a pilot test this summer, 10 stores used VR for training on new Pickup Tower units in their stores. VR is allowing associates to be trained before the towers are even installed – no teachers required. This will be key as Walmart continues to roll out new tech to stores.

Adrian Carthen used the VR training to learn about the Pickup Tower when it came to her store in Stockbridge, Ga., this summer. She said it “went beyond hands-on.”

“I’m a gamer, so I was excited to use it,” she said. “It felt like you were actually loading the tower. And I could train any time that I wanted and it was done in just a few minutes."

Instilling confidence is exactly what makes VR so effective as a training tool. Because the effect of VR training is like an experience in real life, associates have the freedom to make mistakes and learn by “doing,” all while in a safe environment.

“Walmart was one of the first companies to benefit from VR’s ability to enrich employee education, and its applications will only grow from here,” said Andy Mathis, Oculus’ head of business partnerships. “What makes it so compelling is that costly, difficult, or otherwise-impossible scenarios and simulations become not only possible, but immediately within reach.”

But beyond the investment in innovation and associate training, VR technology helps teach skills that enrich the careers of associates across the U.S.

“Yes, we’re focused on helping people do their jobs better every day. But the training we’ve designed is also hopefully training for life,” McKeel said. “That person walks out of their store with new skills and more confidence than they had before – that’s the passion behind this project.”

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Innovation

Walmart’s Custom Apps are Enabling a Workplace Refresh

The moment Rissa Pittman walks through the doors of her Walmart supercenter in Rogers, Arkansas, it’s her responsibility to choreograph all the moving parts that make up a great shopping experience.

Like all store managers, making sure she has the right people on her team is the biggest part of that success. But ensuring they’ve got the right tools to do their jobs is a close second.

Walmart recently introduced a suite of custom-built apps for associates to use in-store, allowing them to manage a variety of routine activities directly from a mobile store device. From the moment a product arrives in the back room to the second a customer finds it on the shelf, an ecosystem of data gives associates new visibility that helps them make informed decisions quickly, thus allowing them to take on more ownership of their work.

They’re also a huge benefit for customers. With associates equipped to work smarter on the sales floor and behind the scenes, these apps give shoppers the benefit of even faster service and more personalized attention when they go to a store. I visited Rissa and her team to see how they’re using these apps to take customer service into the future.

PlanIT
We’ll start with Rissa’s favorite: the PlanIT App. Basically, it’s the information hub that associates use to stay up-to-date on company and store announcements.

“Running a Walmart store takes a lot of skill,” Rissa said, “and PlanIT gets us organized, prioritized and connected.”

PlanIT helps store managers focus on efficiency. They can use the app to notify department managers of projects that need to be done that day and specific tasks required. The app also empowers all associates to receive information directly from Walmart’s home office that was previously provided only to management.

The Receiving App
With the simple scan of a truck ID, the Receiving app tells back room associates exactly which products have just arrived at the store. Not only does this eliminate time previously spent manually reviewing inventory, it also simplifies the planning process required to know which items need to head to the sales floor.

“One of the biggest parts of great customer service is making sure the right merchandise is on the shelf when customers need it,” Rissa said. “This entire process, and making sure that it’s done right, starts in the back room.”

The Downstock App
Once merchandise is on the shelf, associates need to make sure it’s available throughout the day for customers to find. You may have seen our Bossa Nova shelf scanner, technology that roams the aisles, automatically gathering data to identify items that are out of stock and where to find them in the store. That information is then directly sent to associates through the Downstock app, eliminating the amount of time spent on mundane tasks and allowing more time to be spent helping customers find what they need.

The Price Change App
Price changing is another time-consuming task that we’ve addressed, one that sometimes required associates to spend minutes walking back and forth between aisles to locate items. With the Price Change app, information about product price changes are categorized by aisle so that associates receive them in the order they should be made, creating an efficient path through the store. Accurate pricing allows customers to make informed decisions on the products they want, and the Price Change app increases accuracy while drastically minimizing the time associates spend on the task.

The Availability App
The Availability app gives associates insight into how their store is performing over time. It automates information about products that are out of stock and shows the associate specifically what time the out-of-stock occurred. Knowing this lets associates compare the store’s performance before and after outs occur and determines the root cause – such as staffing issues, shelf capacity or product availability.

“Our leadership tells us all the time that we should feel empowered to become merchants in our stores,” Rissa said. “The Availability app helps associates understand their merchandise and their customers better.”

The Claims App
When customers return a product to the store, there are a number of options associates have for handling the merchandise. The Claims app outlines the best options available for a product, in the order they should be considered. More specifically, can the product be sold at a clearance price, can it be donated or does it need to be disposed of? The app removes the guesswork out of managing returned products.

“It makes it simple to stay in line with our health and safety standards,” Rissa said, “and even helps our store reduce waste because we know exactly which items can and can’t be donated to food shelters.”

The Sales App
The Sales app updates a store’s sales numbers in real time so that associates know how their designated areas are performing against the previous year, down to specific products. With information about top-selling categories in each department, associates are motivated to track their accomplishments so they can stay competitive with other stores in their market.

A Custom Ecosystem of Data
Sharing more information with associates empowers them to make smarter, quicker decisions in their stores. The end result? People who have the tools to own their work – and more customers who walk away satisfied. For Rissa and other store managers, staying connected throughout the day makes it easier to run a more efficient store.

“These apps are about efficiency and organization. Running a Walmart store takes a lot of skill, but with the apps provided to our associates, we’re better connected to everything we need to be.”

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