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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Innovation

My Journey From EE to IoT at Walmart’s DFW Tech Hub

Before I joined the team here, I had no idea how innovative a 50-year-old retail company could be.

Like most people, I had interacted with Walmart as a customer in stores and online but had never really thought about the systems and technology functioning behind the scenes to make the whole thing work.

As we officially open our new Walmart Technology satellite HQ in Plano, Texas, this week, I’m reflecting on my evolving, 20-year journey in tech — from building circuit boards to developing software to, now, exploring ways to apply advances in the internet of things (IoT), machine learning, object detection and other emerging technologies in the increasingly blended world of physical-digital retail.

Here’s a great example:

It might seem like a small thing, but spills are a big deal on the sales floor. So we developed a concept to help stores quickly detect spills, building a quick alert system that linked a camera with a Raspberry Pi and sensors that sent photos and data from the sales floor to the cloud. There, we deployed learning algorithms to analyze and build models that helped identify spills.

It wasn’t perfect – but it worked! And even though we won’t bring our prototype to life in stores at scale, we’re able to learn fast and apply those learnings to other projects — like using machine learning and IoT similar to our Raspberry Pi-based sensory concept to cut energy use and cost, all while keeping the temperature comfortable for associates and customers in our stores.

I’ve only been at Walmart four months, but it’s been a blast. I’m still blown away by the many different applications of emerging technology in something as simple as a retail store. But really, retail isn’t simple. It’s complex, the scale is insane and the industry is rapidly transforming. What an awesome time and place to experiment, innovate, fail fast and learn quickly.

It makes my brain happy, and I’m glad it’s happening here in the Dallas-Fort Worth area.

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Business

The Baby-Soft Science Behind Parent’s Choice Wipes

New parents have enough on their minds – the price of high-quality, good-for-baby essentials shouldn’t be one of them.

That’s the thought behind our Parent’s Choice cotton baby wipes. They’re made with 99% pharmaceutical-grade purified water and plant-based ingredients, then pass through four levels of filtering and treatment. The result? An ultra-pure wipe that parents can trust to be safe and gentle on sensitive skin – at a great value.

Diaper changes are a time when every child deserves to be clean and comfortable so their skin remains naturally healthy. We trust the Nice Pak factory in Jonesboro, Arkansas, to create the best product possible. They don’t take shortcuts, so moms and dads who use Parent’s Choice cotton wipes can expect excellent care for their baby, every time.

Watch the story behind how Parent’s Choice cotton baby wipes are made.

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Innovation

Hundreds More High-Tech Pickup Towers are Headed Your Way

You know how handy vending machines can be when you’re craving a snack or a drink. But have you ever imagined a giant vending machine that could help you get your online orders faster and save you money on shipping?

It may sound like a high-tech dream, but these machines, known as Pickup Towers, became a reality in nearly 200 of our stores over the last year. The response has been overwhelmingly positive. In fact, more than half a million orders have been retrieved through the towers since we first introduced them.

Because of this success, we’re rapidly expanding this pickup program by adding more than 500 additional Pickup Towers to stores across the country, bringing the total to more than 700 by the end of the year. With this expansion, Pickup Towers will be available to nearly 40% of the U.S. population.

Our customers have been clear: They love the Pickup Tower. But, they also told us they wanted the ability to retrieve larger items the same way. That’s why every new Pickup Tower will come with Pickup Lockers, making it just as easy to pick up that new TV as it is to pick up a new baseball glove.

But why stop there? We’ve launched all kinds of innovative services for busy families, including Online Grocery Pickup, Pickup Discount, Mobile Express Scan & Go, our growing grocery delivery service and a new partnership with Google Express. We’re even testing additional concepts, similar to the Pickup Tower, that could make picking up your online order even better in the future.

As we continue to innovate, we’ll keep listening to our associates and customers to improve the Walmart experience – and who knows? – maybe next time you’re in a Walmart store you’ll be greeted by the newest way to save time and money.

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Community

This School-Run Garden is Helping Nourish an Arizona Community

Moencopi Day School in Tuba City, Arizona, has offered a garden learning program for over 10 years. But it was just last spring that student-grown produce first appeared on this elementary school’s cafeteria lunch line—a Hopi Nation first.

That special lunch was important for Moencopi Day School. For the fifth graders who made it happen, the impact came over months of learning and preparation. Guided by Steven Lomadafkie, a science and environmental educator at the school, and two AmeriCorps service members recruited and trained by FoodCorps, an organization connecting kids to healthier foods and the natural world, the students planted and tended lettuce, gaining skills and pride in the resulting harvest.

Through washing the greens and planning a school-wide party, the students built a connection with cafeteria staff—who saw the infectious enthusiasm kids could have for a vegetable. By modeling positive eating behaviors, these fifth graders became healthy food champions, spreading the joy of good nutrition to their peers. It’s the sum of these ongoing, school-wide experiences that shapes children’s eating habits and their lifelong benefits.

A belief in hands-on learning is something that Moencopi Day School is embracing in its second year of partnership with FoodCorps and local nonprofit Moenkopi Developers Corporation. This year’s FoodCorps service member, Curt Cebula, is building on last year’s progress, expanding greenhouse lessons to all grades and increasing the frequency of taste tests. “The kids love him,” Steven says of Curt. “Sometimes he’ll get 10 hugs before a class starts.”

Curt says he sees once-reluctant students now open to trying new foods—especially when they’ve had a hand in making them. Some parents have even told Steven their kids have asked to start a garden at home.

Moencopi’s parent liaison, Trinity Honahnie, says Curt has been instrumental in engaging the community, another critical ingredient in the FoodCorps recipe. His support of a new school-wide take-home meal kit program, featuring traditional Hopi foods and recipes, has helped parents connect with what’s happening at school while reinforcing healthy habits at home. A taste test he led at a parent-teacher conference sparked a new energy.

“It was just a turnaround overnight,” Trinity says. “Curt has really brought some light to our greenhouse program.”

Principals, teachers, and parents understand that this type of positive change is important. FoodCorps strives to make its program effective, accessible and relevant to all schools. This year it introduced a new series of elementary school hands-on food lessons, each tied to national academic standards, which teachers can adapt and weave into classroom lessons. Thanks to support from funders like the Walmart Foundation, this year FoodCorps will reach 160,000 kids around the country.

At the end of the day, FoodCorps serves to make it easier for schools to do what they do best: give students the nourishment they need, in body and mind, to thrive. It’s the passion of local leaders, like Steven, that makes the impact we seek truly possible.

“This is probably the best job I’ve ever had,” he said.

Erica Curry, director of program resources and practices at FoodCorps, oversees the development of resources for FoodCorps’ service program, including a new series of nutrition education lessons that makes it easier for schools to integrate hands-on nutrition education into standard curricula. FoodCorps is proud to be supported nationally by the Walmart Foundation as together we seek to reach children with high quality, impactful nutrition education that sets kids up for healthy futures.

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