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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Opportunity

How My Disability is Helping Make Walmart.com More Accessible

On August 28, 2000, I began my career at Walmart eCommerce.

I began as a product copywriter, responsible for writing thousands of item descriptions. I progressed to become a senior manager on our site merchandising and customer experience team.

At the same time I was expanding my focus on customer experience, I was also losing my eyesight.

By 2015, I was in the thick of vision loss, but refused to let anyone see the battle I was fighting inside. I came to work every day without using a white cane or guide dog, because I was afraid of what people would think if they knew I had a disability. Would their perceptions of my abilities change? Would this impact my career growth?

I soon began using assistive technology called a screen reader that read all accessible content on my computer, tablet and smart phone – enabling me to thrive in a digital world. Within a matter of days, I quickly realized that for the first time in 15 years, I could no longer shop our website. Walmart.com was not accessible for screen readers. I immediately thought about the more than 20% of the U.S. population touched by disabilities and wondered how many of them couldn’t shop our site, either.

I suddenly realized that I had an opportunity to make a difference on inclusion for our associates and accessibility for our customers. It was time to take what I perceived as a liability and turn it into an asset. As I began to share my situation with a trusted HR partner, she introduced me to a colleague, and now dear friend, Russell Shaffer, who has the same degenerative retinal disease as me. Russell’s passion for inclusion and his invaluable support (along with my first guide dog) gave me just the dose of courage I needed to be able to bring my true self to work.

Nearly three years later, I can tell you that the day I stepped out of my comfort zone is the day I stepped into the most challenging, yet rewarding, job of my career. Today, I am proud to lead accessibility for Walmart eCommerce, proud to co-chair our internal group for associates with disabilities and proud to be part of a company that continues to promote the importance of diverse thought leadership as part of its overall commitment to diversity and inclusion.

I am now principal product owner of digital accessibility, and my job is educating and enabling teams across our company to build accessibility into our culture and the way we work. When we start with digital inclusion and universal design, we deliver a better experience for everyone. Walmart eCommerce is just embarking on the accessibility journey. We’re proud of the progress we’ve made and excited about the opportunity to continue optimizing our digital properties. From the audits of our site and apps to the changes we’ve made in our processes, we’re continuing to make our experience more accessible. We have also made great strides with our grocery offering, as we know how important it is to make grocery shopping easy for everyone. And, our customers with disabilities have told us online grocery pickup and delivery are making a difference in their lives.

Another key focus area is driving accessibility innovation for internal software applications, ensuring that everything Walmart builds for the accessibility of our customers is also built to make associates’ lives easier as well.

Sharing my story has been one of the best decisions I have ever made. I am grateful for both the personal and professional connections that I’ve made along this journey.

In addition to my day-to-day work at Walmart, I also frequently travel to conferences to speak. The thing that humbles me the most, and what makes my work so rewarding, is the fact that other major corporations are also making accessibility a priority for the benefit of their customers and colleagues. When Microsoft, Apple, Facebook and Google can all sit down together over the issue of accessibility and devote their resources toward tackling this challenge, it transcends competitive boundaries and sends a clear message that people with disabilities are assets. We bring new and different perspectives to the workforce, we adapt quickly and are extreme problem solvers.

Thanks to the culture of trust within Walmart, I am really proud to be me. The me with a disability. The me that is so honored to be part of a team of associates who have leaned in and learned how to truly make a difference in so many people’s lives.

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Business

Q&A: Eko Founder on Walmart Deal, Changing the Game in Entertainment

Walmart and Eko’s new joint venture, W*E Interactive Ventures, is poised to bring an exciting approach to entertainment to a much larger audience. We caught up with Yoni Bloch, the CEO of Eko, to learn more about the future of his company’s work with Walmart.

Q: For those who don’t know Eko, tell us about your technology and approach to interactive media.

A: Eko is a technology company leading the charge in interactive entertainment. We have over 15 patents that enable the creation, distribution, measurement and monetization of streaming interactive video. All these things come together as a storytelling platform that empowers participants to shape stories as they unfold.

Since 2010, we’ve created interactive content for major brands like Coca-Cola, Samsung, IKEA, Shell, Madewell and Red Bull. We’ve collaborated with artists like Coldplay, Carly Rae Jepsen, Aloe Blacc, Major Lazer and Bob Dylan.

More recently, we’ve ventured into interactive serialized entertainment. We’ve launched the comedy, That Moment When, with Sony and a reimagining of 1983’s WarGames with MGM.

With our Walmart partnership, we are excited to explore groundbreaking interactive content even further.

Q: What separates your interactive content from other entertainment sources?

A: There’s a vast landscape of entertainment sources out there; from Candy Crush to Game of Thrones to social media. They’re all valid and exciting mediums, but none combine interactivity with filmmaking.

Eko Originals are created by acclaimed Hollywood storytellers and game visionaries to harness the best of both of these worlds and give audiences greater participation than ever before. A viewer suddenly transforms into a participant creating an incredible sense of collaboration and complicity in the story itself. With our content, we suddenly have the “water cooler effect 2.0”: Instead of discussing the season finale, you’ll discuss what happened on your season finale.

Q: How do you envision Eko’s technology changing the ways that we interact with entertainment?

A: We all interact thousands of times a day. Every single person has a media playing device on them at all times (sometimes two or three). Texting, playing games, chatting—everything we do is interactive. And then video starts to play and...we lean back. Storytelling is the last medium to catch up.

But those days are over. The bandwidth is here, the hardware is here and now the software is here. Everyone’s ready to be a part of their stories, and we’re happy to give them these experiences.

We’re not changing the way we interact. We’re catching up to how we already do.

Q: Why are you passionate about audiences interacting with their media in this way?

A: Rather than sit back as passive viewers, interactivity empowers audiences to participate in stories. This drives deeper emotional connections with content, leading to unprecedented levels of engagement.

Depending on the interactive experience, participants could shape a protagonist’s decisions and personality or completely change the tone of the show—the possibilities are endless. You get drawn in when you make choices. You become more empathetic, more invested, more inspired.

Our belief is that interactivity should bring you closer to the feeling that your imagination is part of the story. Otherwise, interactivity is just a gimmick. And, we’re not a gimmick. We’re a powerful tool for self-expression.

Q: Talk about this deal with Walmart. What possibilities will this open up for Eko and Walmart?

A: This is the biggest investment to date in interactive video entertainment. It creates an unprecedented opportunity to develop premium interactive series but also to link commerce and entertainment in innovative ways that are entertaining and helpful.

By pulling in consumers to engage and shape their own personalized experiences, we are innovating far beyond the passive viewing experience of traditional digital video, branded or not.

Our partnership is part of a larger entertainment ecosystem Walmart is building. Through interactive content, Walmart will ultimately connect with its customers on a much deeper, more meaningful level. Through our partnership, we’re combining forces to bring the next generation of premium interactive entertainment to a diverse, mainstream audience.

Q: What can customers and viewers expect from this venture?

A: If you’re a gamer, your jaw will drop the first time you play a movie. If you love movies and TV, your jaw will drop when you realize you can be part of the story.

Everyone who participates in an Eko Original has the same reaction: “This is the future.”

From the moment you begin, you realize you’re on the cusp of an entirely new art form. By just participating in it, you’re part of it.

Passive entertainment isn’t going away. But interactive entertainment is here at long last. So, what can they expect? They can expect to have their minds blown.

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Innovation

You’ll Never Believe Who’s Scrubbing the Floors at Walmart

The floor of a Walmart store doesn’t get a lot of attention from customers.

That’s because when it’s in perfect condition, it’s shiny, sparkling and simply just there – gliding carts and people along and acting as the backdrop for an uncomplicated, list-checking experience.

Creating this often overlooked, yet important experience has, however, required a LOT of attention from Walmart associates. In fact, for two hours each day, an associate at each of our U.S. stores sits on a scrubbing machine to make sure the floor plays the flawless, clean-yet-invisible role.

Two hours per day. It’s time an associate would rather spend serving customers, so we’ll soon be deploying a very modern solution: the Auto-C – Autonomous Cleaner. Much like a self-driving car, this machine uses assisted autonomy technology to clean and polish floors, freeing up associates to take care of other tasks. Instead of riding the scrub machine, a Walmart associate can be tidying restrooms, dust-mopping the checkout aisles, or engaging with customers.

Available in 78 stores today and rolling out in around 360 soon, Auto-C is just one piece of technology that is making Walmart more efficient. The Auto-C is still pretty young and needs adult supervision (an associate has to prep the area and map the machine’s route), but we’re excited about the role it will play – along with the Auto-S scanning machine, Alphabot, and Pickup towers – in Walmart’s technology ecosystem.

Look for Auto-C coming soon to an impeccably clean floor near you.

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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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