Walmart learned a lot at the start of the pandemic about how to best serve customers navigating a new and fast-changing normal, and some of those lessons have evolved into permanent growth opportunities for the retailer.
That was the message from John Furner, president and chief executive officer of Walmart U.S., who took time Tuesday morning for a virtual discussion on the state of the business with Matthew Shay, president and ceo of the National Retail Federation.
The U.S. division, with its 4,700 stores, $350 billion in annual sales and 1.5 million workers, was on the front line when the virus hit and lockdowns were instituted back in March. Because it was deemed an essential business, Walmart’s stores were allowed to stay open and Furner said the corporation quickly laid out a series of priorities for the company. Number one was to ensure its associates were protected, number two was to serve the customer as effectively as possible, and number three was to serve communities around the U.S. — all while still managing the business and building for the future.
“Whether you’re a cashier or you have my job,” he said, “pressure is relevant.” So the company listened to its associates and customers and tried to be empathetic to the challenges they were facing. “We slowed down things we were doing for ourselves,” he said, referring to some big-picture initiatives that had been a focus before the pandemic, “and focused on what our customer needs now and will need for the next six months.”
Early on, Walmart “recentered” and focused first on feeding the country after restaurants were forced to close. General merchandise and services such as optical and auto-care centers were placed on the back burner.
This was necessary to service people in what Furner called: the “stock-up phase,” where panicked shoppers rushed the stores to fill their refrigerators and homes with basics — remember the empty toilet paper aisles? — and there was a “run on food and consumables.” That was followed by the “stay-home phase,” he said, when other products needed for work and school became essential.
Now, when it looks like working from home may become a permanent way of life for a lot of people, Walmart needs to be prepared to fill the needs of customers facing that reality.
“The trends we’ve run on are changing so rapidly,” he said, adding that while the company may have been preparing for things a year in advance not long ago, now it’s trying to prepare a mere 12 weeks in advance. That includes how to handle major holidays this year as well as physical versus digital shopping.
Furner said the pandemic has led Walmart to “reimagine” how to serve customers more quickly. That includes the launch of Express Delivery and the expansion of its pick-up and delivery services, which Furner said have been “extremely strong.” In addition, the retailer accelerated its hiring program: where it might have taken weeks after someone applied pre-pandemic, it can now be as fast as the same day in many cases.
And while the Walmart Plus membership program was in the works before the pandemic, it attracted a lot more interest than it might have otherwise as customers sought a quick, value-based solution to the new world.
In the last nine months, the pace of change has been enormous, and Furner, who spent three years in China for Walmart and was also head of Sam’s Club before being elevated to his current role a year ago, used his experience in Asia to answer the American consumers’ quick pivot from physical to digital — a trend that impacts not only distribution but inventory flow as well.
“We saw a lot of channel shifting in the first six months,” he said.
There were a lot of products that skyrocketed in popularity overnight as well and prompted the merchant team to work quickly to fill demand. That includes not only toilet paper and paper towels but fishing gear — 10 million more people in the U.S. took up fishing this year — as well as yoga mats, pink and blue hair dye and non-permanent tattoo pins.
Turning to the holiday season, Furner said Walmart’s decision to close its stores on Thanksgiving came after an internal query from associates. And while physical stores may be shuttered for the day, the retailer is leaning more heavily into its digital efforts, breaking its holiday efforts into three events that will be spread across the season. “Whether we’re in a pandemic or not, we want to give customers a choice,” he said. And this season, “we’ll make sure we’re here in any way they want to be served.”