Delivering the future of retail - Walmart's Chief Customer Officer on building out after COVID

Profile picture for user slauchlan By Stuart Lauchlan January 14, 2021 Audio version
Summary:
Walmart was one of the omni-channel retail winners in 2020 as it adapted to changing consumer demands triggered by COVID. Chief Customer Officer Janey Whiteside discusses what comes next.

Walmart
(Janey Whiteside)

US retail institution Walmart had ‘a good war’ when it came to the COVID pandemic in 2020. Years of investment in omni-channel transformation, combined with a nationwide asset in the shape of its vast network of physical stores, left the firm well-placed to adapt to fast-changing consumer demands created by the crisis, not least the massive shift to online grocery shopping.

Looking back at the events of last year, Janey Whiteside, Walmart EVP and Chief Customer Officer, recalls that those demands were at one point altering on a near-weekly basis, morphing from health products through DIY schooling aids to home improvement items, all the time with grocery and other life essentials as a constant.

Alongside all this came a massive acceleration in demand for services such as pick-up and curbside delivery and not always from the expected customer demographic, with the fastest growing segment being the 65+ age group who weren’t previously online. Whiteside notes:

At the beginning of the pandemic, we saw a peak of 300% growth in those services and four times as many new customers using our pick-up and delivery services.

For its part, Walmart moved quickly to meet new demand, says Whiteside:

We, for instance, added more than 40% more availability in terms of slots versus pre-pandemic. We were able to quickly pivot to be able to introduce services that we saw that people needed, like Express Delivery. The rise of the demand for 'something that I need now, in two hours' also increased.

The express angle has been assisted by the geographical proximity of consumers to local Walmart facilities, with the familiar corporate boast of being within 10 miles of 90% of America coming into its own in terms of powering the ability to fulfil orders in very short time windows as well as over longer periods. This has also allowed the firm to use its stores in new ways, says Whiteside:

One of the things that we were able to do during the pandemic is where we had inventory that perhaps wasn't in stock in a dot com distribution center, we were able to leverage the fact that we had that item in stock in a store and re-direct that order and get it to a customer. Being able to manage our inventory, no matter where it is, is really an advantage for us.

She adds:

[Express Delivery] to me is a good example of where we've been able to really create a creative solution for a need that we didn't necessarily see before, which was, 'I've been running around, I've got everybody at home, I didn't realise I'd run out of items, I need them immediately!'. The store footprint allows us to do that. You wouldn't be able to get something from a fulfilment center to somebody's doorstep in a matter of hours.

Stores as omni-assets

The importance of the physical store half of the omni-channel retail balance is a topic that has been returned to many times on diginomica. For her part, Whiteside is firmly against the idea that the future is totally online:

Stores aren't going anywhere. People are still craving that experiential component of going into a store. What we're thinking about is, what's that next iteration of the in-store experience going to look like? And when will people want to be in a store? And how do we use our stores in order to be able to help us become a go-to retailer, in terms of what I would believe is going to be some of the stickiness of this new behavior, particularly around pick-up and delivery?

That being so, there is - and will continue to be - a greater emphasis on health and safety. Walmart has put a lot of effort into finding as many ways as possible to make the firm’s services contactless, whether that be contactless payment in-store, contactless pick-up or contactless delivery, says Whiteside:

Ways to be able to get people what they need, but in a way that helps them feel safe, [that] was super-important. We're continuing now to think about what does this next iteration of safety look like? How do you do that? Everything from how do you think about metering customers in the store, how do you manage lines outside the store, movement within the stores? That continues to be a priority and continues to change.

Delivering on the future

As vaccine programs roll out and some kind of return to ‘normal’ is phased in, attention will inevitably begin to turn from ‘coping with COVID’ to ‘what happens next?’. The new-found increased demand for more and more fulfilment and delivery options is unlikely to go away, even once the pandemic has been flattened enough to make in-store shopping something consumers can once again do without thought.

Not only that, but delivery options will continue to evolve, predicts Whiteside, with the concept of goods being transported not only to the curbside or the front door, but into the home itself and placed in the refrigerator:

People have talked about it for for a long time. When I talk to people about in-home service, you get these really, really extreme reactions. It's interesting how extreme people's reactions are. I think it depends on trust. Do customers trust you? Do you trust that retailer to put together a service that's going to allow people into your homes. We have an in-home service that we're testing at the moment. It's really interesting how quickly you can build that trust with customers. Ten years ago, would you trust somebody to go and pick your groceries for you?

Building that trust level - which comes through faith in the brand, but also through transparency about and familiarity with those doing the delivery - is something that Walmart is putting effort into, she adds, arguing that the benefit makes it worth the effort:

Over time, if you can establish that level of trust, the upside - of the time, effort, cognitive load, being able to come home in those days when we actually went out to work and at the end of the day, the milk, eggs, bread, veggies, whatever it is, are in your fridge - is so appealing. Once you try it once and it works, we start to see people get really hooked on the service. So I think in the next few years, we're going to start to become highly reliant on that.

Beyond that lies the idea of the AI-enabled ‘Smart Fridge’ that is never empty because it knows when to order replacement goods from retailers. This again is an idea that’s done the rounds for decades - see also, medicine cabinets that know when to process repeat prescriptions from pharmacies - but advances in technology make the prospect more of a reality in the coming years. This would have a significant behavioral impact on consumers, suggests Whiteside:

I never actually have to think about milk because I know it's always going to be in stock in my fridge, so I forget about the mundanity of the things I need need in order to be able to live my life. What I can now do is focus my retail behavior on sort of inspiration and discovery of products that I didn't know that I ever needed. (And probably don't need to be honest).

Until such a ‘nirvana’ is attained, the near-term future remains overshadowed by the pandemic, with fresh strains of COVID emerging at the same time as the various vaccines. For a large part of 2021, retailers will still be operating within the context of virus, with a return to ‘normal’ still some way off. But then again, ‘normal’ may not be what consumers are looking for really, reckons Whiteside:

It's interesting how many people have talked about going back to normal, and then said, 'Yeah, but not everything about normal was really that great'. So how do I redefine what what normal is going to be?…How do we leverage physical and digital to create really personalised experiences? How do you give the customer choice? This notion of choice when you have more options will be incredibly important. Some days, I'm going to want something within an hour. I want access to things.

I'm going to need retailers to come to me where I am. This idea that everybody has to go to a place, you have to go to somebody’s site, I think it's going to be different. We're going to have to meet customers where they are, when they want us to meet them. The bringing together of multiple facets of people's lives to help make decisions easier is going to continue to be important.

What will be most important though, is making sure that we particularly think about the customer as the North Star. How are we listening to, learning from and with customers as they start to figure this out? I'm not sure anybody really knows what this is going to look like yet. I would imagine for the next 12,18 to 24 months, people aren't going to quite know, is it normal?

My take

I'm afraid I'm on the 'not trusting' side of the 'extreme' debate around in-home delivery, but then again would anyone have predicted ten years ago that people would have an app on their phones that enabled them to summon up a complete stranger in a car and clamber into his or her vehicle without a second thought? On that scale, is letting someone have the keys to your home just so you don't have to fill your own fridge that much of a leap of imagination? As for the fridge that buys stuff for me, that's a concept that takes me back 25 years when showing off the automated 'house of the future' was a seemingly compulsory theme for tech vendors and no self-respecting home was going to be complete without a chatty medicine cabinet in the bathroom! 

That said, as we've covered at length in recent years, delivery has become become 'the other D' - alongside digital - for enterprise organizations in certain business sectors. Whatever the so-called 'new normal' ends up looking like, the ongoing criticality of delivery and fulfilment options will be unchanged. After ten months of COVID restrictions, deliveries of items that I previously would never have considered ordering online have become a daily occurrence. While I can't wait for a post-COVID pointless browse around a non-essential retail store to become a regular Saturday afternoon fixture again, I suspect the dependency on the new delivery paradigm is here to stay.