FAYETTEVILLE, ARK. – Walmart shared a strategic blueprint for the decade and beyond at its annual shareholders meeting here this month that positions it for a rapidly evolving retail landscape.
The focus, senior management explained in a series of store tours and briefings, is on developing the company’s e-commerce capabilities; using data analytics to personalize the shopping experience; building out a network of small-format stores; and melding its digital and physical initiatives to create a customercentric eco-system for the 21st Century.
Leading the world’s largest retailer into this brave new world is recently appointed president/CEO Doug McMillon, a youthful 47-year-old who started in a Walmart warehouse and would later lead its Sam’s Club and international divisions. A self-professed technology buff, he described CE and toys as the most fun categories he’s led, and joked that he’s probably bought everything offered in the chain’s electronics departments, according to an in-house profile.
“We need to be at the forefront of innovation and technology,” he told the 14,000 shareholders, associates and assorted guests gathered at the University of Arkansas’ Bud Walton Arena. “Customers will increasingly expect and require the best of both worlds. They want the excitement and the immediacy of shopping in a physical store and the freedom to shop whenever, however and wherever they want.”
One of the first fruits of McMillon’s digital efforts is a post-purchase price comparison tool, dubbed Savings Catcher, which searches competitors’ circulars and reimburses customers who paid more for the advertised products. The program is being tested online in seven markets and will be rolled out nationwide this summer.
The discounter said the comparison tool will bring greater price transparency to the market and eliminate the need to visit multiple stores to find the best deals.
Inside the stores, Walmart is resetting its CE departments to allot more space to growth categories like wearables, gaming, prepaid mobile and tablets, and is placing complementary products in closer proximity.
The entertainment “reboot” seeks to revive soft CE sales by “adjusting our space-to-sales ratio to make sure we’re leaning in where the growth is,” said executive VP and general manager Steve Bratspies. The remodel will also promote “natural adjacencies,” he told TWICE, like the fortuitous placement of Beats by Dr. Dre headphones near an iPhone display, and “bigger brand presentations,” such as an interactive Samsung endcap featuring a 60-inch LED TV and soundbar.
Other new elements include an illuminated wearables display, which is being tested in select stores; extended prepaid and tablet aisles; and gaming cases topped with an array of 55-inch panels displaying branded messaging.
Conversely, while the CE displays in Sam’s Club will remain characteristically Spartan, the wholesale club division is gearing up for a big holiday in Ultra HD TVs. “We stand for technology,” Dawn von Bechmann, senior VP of technology, entertainment and office told TWICE.
To that end, the stores will variously carry a selection of 55- and 65-inch models by LG, Samsung and Vizio, while curved OLED displays will serve as the departments’ lead-off product.
“We won’t sell a lot [of OLED models] but they’re symbolic,” von Bechmann said. “Members expect us to educate them and show them what’s ahead.”
Also ahead are a number of retail pilots, including Walmart’s first convenience store, which is supplied by a nearby supercenter, and a grab-and-go depot, where customers can retrieve their online orders from a drive-through manned by carhops.
The small formats, which also include 10,000-15,000-square-foot Express stores and 38,000-square-foot Neighborhood Market supermarkets, are designed to provide convenient fill-in shopping between larger stock-up visits to the 100,000-square-foot-plus supercenters.
But all is not rosy at Walmart. The discounter is looking to the initiatives to help reinvigorate stagnant sales, and this month will lose the head of its U.S. online business, Joel Anderson, to Five Below.
The company also faces increasingly louder criticism of its labor and management practices. Indeed, the meeting once again drew worker protests outside the university arena and activist shareholders inside who were agitating for an independent chairman to replace founding family scion Rob Walton.
“Something is wrong when the richest family in America pays hundreds of thousands of workers so little that they cannot survive without public assistance,” said a Chicago sales associate who introduced the proposal.
In contrast, performances by Harry Connick Jr., Robin Thicke, Sarah McLachlan, Alo Blacc and Pharrell Williams – ironically singing his hit tune “Happy” – punctuated the proceedings to the cheers of thousands of hourly clerks.
TWICE will present an exclusive look at Walmart’s CE initiatives, as presented by its senior management team, in the July 7 issue.
