Walmart - re-inventing retail again?

Stuart Lauchlan Profile picture for user slauchlan June 15, 2016
Re-inventing retail - again. Walmart's CFO flags up 50 years of transformation.


We get the opportunity to re-invent retail again.

It’s an interesting ‘glass-half-full’ spin from Walmart, which hasn’t had its troubles to look for in recent times. But after turning in a stronger-than-expected first quarter’s numbers last month, CFO Brett Biggs was in upbeat mood at the Deutsche Bank dbAccess Global Consumer Conference this week.

With Wall Street finally seeing signs that the firm’s turnaround is gaining steam, Biggs was quick to play up the idea that re-invention is something that’s hardwired into Walmart:

We really have 50 years of transformation as a company and serving our customers in different ways. While today we have almost $0.5 trillion in annual revenue, we had very humble beginnings. Our first store opened in 1962 in rural Arkansas and we’ve had tremendous growth since then. We primarily started in rural America, but we knew our customers wanted more from us, so the next part of our evolution was into our membership clubs.

Then began a real transformation for the company and that was with the super-center. Our first super-center opened in 1988 and was probably the greatest invention in retail history and certainly changed the retail landscape in the United States.

Today’s omni-channel retail landscape is rather different, of course, and requires a rethink of metrics for success, he admitted:

Growth used to be just about we talk about building stores or growing comp sales. It looks different today, it’s still about comp sales and it’s still about building stores, but now it’s about mobile e-commerce, it’s about world-class fulfilment capabilities, it’s about developing new services all with the customer in mind.


Walmart currently has just over 11,500 bricks-and-mortar stores in 28 countries, as well as 16 e-commerce websites in 11 different countries along with our mobile applications.  This, according to Biggs, positions the firm well to focus on integrating the digital business with the physical business to create what he called “the first seamless shopping experience of scale”.

This includes building out five new fulfilment centers for e-commerce business in order to cut down on delivery times in the face of logistical competition from the likes of Amazon.

As noted last week as Amazon Fresh expanded its footprint in the UK, Walmart is piloting working with Uber and Lyft for deliveries to the front door for customers. This is the latest evolution of Walmart’s move into e-commerce in grocery:

We’ve expanded our Grocery Pickup in the US now to nearly 40 markets about 250 stores. This has been a huge hit for our customers, particularly with busy moms. Busy moms who don’t want to get the kids out of the car to come into a super-center, can go to a super-center and pick up their groceries and have them put in their trunk. They really, really like this.

Busy dads and busy single people presumably have similar feelings, unless only moms going shopping at Walmart. Whatever the case, the point is that it’s necessary to experiment with the existing models, said Biggs:

As we test initiatives, we’ll be smart about it. We will take our learnings, we will adjust from those learnings, but we’re willing to try new things as a company. We need to be willing to try new things. It’s about serving that customer how they want to be served and trying things differently, so we’re excited about what we’re doing.

A good example is Walmart Pay, the firm’s own payment app, which by the end of this month should be rolled out to the entire chain in the US. It’s an Apple Pay competitor, of course and something of a gamble as it doesn’t use the NFC technology of Apple Pay, Android Pay or Samsung Pay. Whether it wins out in the end remains to be seen.

But whatever happens, digital tech investment is now a given for Walmart. Biggs concluded:

Technology has changed our world. That’s something that no one would refute and it has changed [things]. Our customers shop is changed, how they want to shop and will shop in the future. We’ve continued to invest in technology whether that be enhanced search capability, whether that’s mobile apps around the world, scan-and-go, Sam’s Club or Walmart Pay. We continue to invest in technology. We will continue to invest in technology, so that we can connect that online world with the offline world for our customers, because that’s the sweet spot for us.

My take

Walmart’s got some issues still to address. The US grocery e-commerce market is still very immature, so it’s far too early to judge what will happen there. In the UK, the firm’s ASDA business is under extreme pressure from low-cost discounters Lidl and Aldi, while the ambitions for Amazon Fresh have to be ringing alarm bells. The need for a proprietary online payment method escapes me for the moment.

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