“The only thing constant at Wal-Mart is change,” Doug McMillon, president and chief executive officer said. “Technology is changing what customers expect and how they shop. If we don’t get ahead of where customers are going, they’ll shop somewhere else.”
Among shoppers’ basic requirements: “They always want the best prices, high-quality merchandise and something new,” McMillon said. “Time is a currency, like money. Customers expect and deserve an easy, enjoyable experience with less friction — it has to be fast.”
Wal-Mart is quickly moving forward toward a new future, McMillon said. He listed a slew of initiatives in various stages of deployment, including an in-stock app that allows associates to get their work in the stockroom done faster, so they can serve customers on the sales floor; a personalization engine to monitor the weather and ensure shipments are properly calibrated; automated product pickup stations; machine learning for pricing; computer vision that will eliminate the need for checkout, and robotic use of blockchain, where armies of robots solve problems or complete tasks more quickly.
“We offer grocery pickup around the world, including at Sam’s Club,” McMillon said. “We’re piloting stores as shipping locations in Japan and China, where thousands use bicycles to make deliveries in under an hour. Fresh delivery is available to half of the U.S. New express delivery in Mexico and Canada delivers groceries to shoppers’ doors in one hour.”
McMillon said customers are using Wal-Mart’s mobile app as a dashboard to locate inventory in stores and use the express pharmacy lanes to save more time at checkout. “We’re also innovating to make paying even easier,” he said. “With Wal-Mart Pay, you scan a QR code at checkout and Scan-and-Go at Sam’s Club.
“People are afraid of changes that technology will bring,” McMillon added. “Shouldn’t we learn and grow and change together? As technology has changed, society has adapted. We’ve learned new ways of living and working. We need to ensure that this generation and the next generation are trained with the skills they’ll need to succeed.”
Marc Lore, who joined Wal-Mart as president and ceo of U.S. e-commerce after the company he founded, Jet.com, was acquired by the retailer for $3.3 billion, crowed about the 63 percent increase online posted in the recent first quarter. “Let’s continue empowering our customers to shop smarter so they can save money and time,” Lore said, giving Wal-Mart’s longtime tag line a twist by adding the word “smarter,” referring to Jet’s proprietary basket model. “We’re doing this at Jet.com and at walmart.com, too.”
Walmart.com users immediately see the items they most commonly buy when they log on to the site. “You can get free two-day shipping with no membership fee,” Lore said, a reference to Amazon’s annual $99 Prime fee for unlimited free delivery. “If you want to save even more, you can pick up your order in a store. The most expensive part of shipping is the last mile delivery. If you want items the same day, that’s where Wal-Mart really has the advantage because we have stores everywhere.”
As reported, Wal-Mart said Thursday it’s begun testing a delivery program where the company’s 5,000 associates in the U.S. will be given the option of delivering online orders on their way home and earn a fee. “Just imagine associates all over the world delivering orders,” Lore said. “That could be a real game changer. I’m looking forward to shaping the future of retail together.”
Admonishing associates to grow sales while lowering expenses, Brett Biggs, executive vice president and chief financial officer, said, “We’ve gone from a little over $60 a share last year, to almost $80 a share yesterday. Customers and investors are starting to see that we can do — both grow sales while lowering expenses. If we were able to be just one percent better in expenses, that would be $1 billion.”
“Annual,” as the shareholders meeting is known, seemed somewhat low-key this year. Country music star Blake Shelton was the host and there were performances by his companion Gwen Stefani, as well as Ne-Yo, Rachel Platten, who sang her anthem, “Fight Song,” and Mary J. Blige.
Wal-Mart U.S. has logged 11 consecutive quarters of same-store sales increases and 10 of positive traffic comps. Overall net sales increased 1.4 percent to $117.5 billion, from $115.9 billion in the 2017 first quarter ended April 30, although profits declined 1.3 percent to $3.039 billion, from $3.079 billion due to an increase in tax rate, the retailer said.
To show that Wal-Mart isn’t interested only in technology, the company touted its $2.7 billion investment in wages and training and said that last year 150,000 part-time associates were converted to full time.