National Retail Federation president and chief executive officer Matthew Shay was as safe, respectful and nonthreatening as an interrogator could be, lobbing softball questions to Walmart president and ceo Doug McMillon during a conversation Sunday at the NRF Big Show at New York’s Jacob K. Javits Convention Center.
Shay focused on Walmart’s wage hike, which was revealed Thursday, but he never mentioned store closures, which were the second part of that day’s story. Walmart said it will raise the hourly wage of full-time store associates from $10 to $11, expand paid parental leave, and offer a one-time bonus to eligible employees. However, the news came on the same day that 63 Sam’s Clubs were abruptly closed.
McMillon cited new tax legislation as the impetus for the wage increase, and Shay asked McMillon for his views on the economy.
“We’re in a real positive environment,” said the Walmart ceo, who’s receiving the Visionary award at the 2018 NRF Foundation gala Sunday evening. “We have low gas prices, tax reform happening and optimism on the part of consumers. I haven’t seen this for quite a while. We’re in a good spot from a consumption point of view. The U.S. tax reform will drive some growth.”
He admitted that the company has “a lot of work to do in e-commerce. We want to make it better. We want to build it and make it strong,” he said. “The way the customer lives today, they’re bringing the store and e-commerce experience together.”
“The August 2016 acquisition of Jet.com, that was a big moment,” said Shay.
“When I saw Jet.com, I saw a strong team,” McMillon said. “Marc [Lore, Jet.com founder] is a merchant first. I felt we had a kindred spirit there. I loved what he did with the Smart Cart, where you save money if you buy two of this, and end up with a bigger basket.
“I try to empower them,” McMillon said of the Jet.com team. “Marc leads Walmart U.S. e-commerce, Shoes.com, Modcloth.com and Bonobos.com. He teamed up with Greg Foran, president and ceo of Walmart U.S., to develop solutions for customers that are seamless.”
McMillon said Walmart won’t leave employees behind as it adopts new technology. “As we make investments in technology and learn how to automate things, we want our people to learn that and go with us,” he said. “The bets we’re making over the long-term as we become a different kind of company — a technology company — the people in the mix will ultimately be able to move on with us.”
Associates welcome technology that’s being integrated into various job functions, McMillon said, adding that in the past there was more paper-based work that’s now done on an app or a handheld device. “People want these tools because they’re doing tasks that they don’t enjoy doing,” he said. “Now they do their work in a more enjoyable way.”
The 200 Walmart Academies in 2017 trained 225,000 employees, McMillon said. “We’ll bring everyone through the process of learning about technology,” he said. “People who go through the program stay longer.”
“We’re shaping the culture of the company and how we work,” he said. “We were a company that had a core group of silos that’s started to work in an agile fashion across those silos. We have an assortment of 70 million items available on mobile devices.”
McMillon spoke about using Walmart’s size and scale “for good, the good of the planet. The world is becoming increasingly transparent. We’re making our supply chain more sustainable.” The retailer has set goals by 2025 such as removing a gigaton of greenhouse gases from its supply chain, getting to 50 percent renewable energy and zero waste to landfills.
Sustainability matters to “a growing part of our customer base,” McMillon said.
Walmart’s environmental push came after glowing press during the company’s early years. “In later years, the newspapers started to criticize us. We ignored that.” Walmart’s working in New Orleans after Hurricane Katrina did a lot to change perceptions of the company. It felt good, McMillon said, adding, “We asked ourselves, what will it take to be that company all the time?”
Walmart, which operates stores and/or e-commerce sites in 28 countries, including Africa, China, India, the U.K. and the Americas, empowers local teams to assort and market stores for their communities. “I’m seeing more commonalities in how technology is impacting conversations around the world,” McMillon said. “China is off the charts as it relates to digital commerce. We own 10 percent of JD.com and own part of a last-mile delivery company in China. They can get a delivery for under $1 in 30 minutes or less.”
McMillon said he leads “from the bottom and from behind. Retail is about change. It’s challenging and fast-paced. It’s a team sport. Man, I’m not bored.”