Walmart chief: Retail is about change, customer experience a team sport
Photo courtesy National Retail Federation NRF 2018.
Walmart President and CEO Doug McMillon may have a huge to-do list on his plate given the competitive nature of retail, emerging technologies and competitors and managing a workforce of 2.3 million employees, but there's one thing he's not, and that's bored.
He's also likely going to be the last CEO at the $480 billion company who can boast he worked for founder Sam Walton, who passed in 1992 at the age of 74. So, it's no surprise his leadership strategy and philosophy are deeply tied to the retailer's founding principles and values.
"Sam Walton gave us ours sense of purpose. The secret is we all work together to help consumers save money, live better," he told a standing-room-only crowd at the Big Show, the annual NRF conference taking place this week at the Javits Convention Center in New York City.
One of the biggest constants in retail, he said, is change, and "retail is all about change. And man, I'm not bored," he shared with panel moderator Matthew Shay, president and CEO of NRF.
Walton's focus on the customer is as strong today as it was when Walmart opened its first store in Rogers, Arkansas, in 1962.
"Sam was about putting other people first," said McMillon, who took the CEO role four years ago after literally working up through the Walmart organization. He first came to the retailer as a teen seeking part-time work, and initially started in the warehouse operation in Bentonville, his hometown. After graduating college, he returned to Walmart serving in various internal executive roles and headed up the retailer's international division prior to taking the role as president.
During his tenure he was fortunate to work for founder Sam Walton, and he recalled participating in one-on-one sessions Walton held with leaders on Saturday.
"To see him lead has had a big impact on me," he said.
And while Walmart reigns as the top brick-and-mortar retailer, it's racing forward to retain its industry leadership perch as ecommerce leader Amazon is grabbing greater market share and traction since it arrived in 1994.
A Recode article this past October projected Amazon would end up owning about 44 cents of every e-commerce dollar in the U.S., with e-commerce sales growing 32 percent in 2017 (representing 43.5 percent of total ecommerce sales).
"We need to not get comfortable. We have a lot of work to do," said McMillon, noting that his decision-making approach is to ensure that Walmart is proud of decisions being made two, three and five years out, and not just in the immediate 12 months.
The customer strategy, he said, is a "team sport" within the Walmart business environment.
"That's where it all matters and it's all that matters," he said when describing Walmart's increasing focus on associate training and technology.
Associates play a key role in successful technology efforts aimed at providing a seamless, frictionless experience whether in a physical store or via Walmart's ecommerce channel.
"We are investing in tech, putting artificial intelligence to work; automation and people are part of that process, so we must first support them and demonstrate we are creating an opportunity over the long terms," explained McMillon.
"We are a different kind of technology company, we have been one for a long time, but we're going to be a different kind [going forward]," he said.
Automation technology is helping to make Walmart more efficient and nimble. For the associate, it's eliminating mundane tasks and providing more enjoyable responsibilities, said the CEO.
"The tasks we can digitize are not tasks associates had fun doing," he noted.
Walmart views retail as a people's business, and attracting shoppers and retaining shoppers is the prime focus.
"The way people leave a store, or the online experience, leads to whether they come back," he said.
On the ecommerce front, McMillon is confident of the strategy directed by Marc Lore, founder of Jet.com, which Walmart acquired in 2016 for $3.3 billion. Lore not only heads up Jet, but all of Walmart's online strategy, and McMillon acknowledges that Walmart fell behind early on when ecommerce hit mainstream.
"We missed the memo," McMillon said regarding societal expectations in the retail segment — today's consumer expectations of purchasing online, via PCs, mobile devices and apps, and getting faster delivery than ever before.
"We trying to grow. We have a lot of work to do to have the fundamentals, lots to catch up there," McMillon said. That "catching up" has led to a more efficient supply chain, eliminating waste and becoming more energy efficient.
He expects Walmart to succeed in its ultimate goal: a seamless experience whether in the store or online.
"That's where we think we can win," he said.
When it comes to the often-heard demise of retail, McMillon isn't buying into the belief, and he cited Mark Twain's often-quoted statement that "rumors of my death are greatly exaggerated."
Today's customer, he said, is the very busy family concerned about price and value, and is very rational in nature.
"They'll determine if we'll be around. We are constantly improving the customer experience, and if we are better at that, we'll be here. If not, we won't," he said.
He also shared that if someone had predicted Walmart would be selling about 70 million items in 2017, he wouldn't have taken that bet given the retailer sold about 10 million items just a few years ago.
Walmart's biggest learning experience is happening in the China market, added McMillon, which he described as "off the charts" in terms of digital retail.
"We learn more from what's happening there," he said, noting that in China, consumers are paying about a U.S. dollar for 30-minute delivery.
Topics: Assisted Selling, Automated Retail / Vending, Consumer Behavior, Customer Experience, Customer Service, eCommerce, Marketing, Merchandising, Mobile Retail, Omnichannel / Multichannel, Online Retailing, Retail - General, Robotics / AI, Supply Chain, Technology, Top 100 Retail
Judy Mottl is an experienced editor, reporter and blogger who has worked for top media including AOL, InformationWeek and InternetNews. She’s written everything from breaking news to in-depth trends. She loves a great pitch so email here, follow on Twitter and connect on LinkedIn.www