At Walmart’s 47th Annual Shareholders’ Meeting on Friday, June 2, President and CEO Doug McMillon said Walmart has “started to invent the future of shopping again,” leveraging technology to “empower associates and improve the customer experience.”
The goal is to offer the “best prices and great merchandise, while saving customers time and creating a fast, easy and enjoyable shopping experience.
“We’re making every day easier for busy families and we’re using new ways of working to do it,” McMillon told more than 14,000 associates from across the U.S. and around the world who were gathered at the Bud Walton Arena at the University of Arkansas in Fayetteville. “We’re going to make shopping with us faster, easier and more enjoyable. We’ll do more than just save customers money and you, our associates, will make the difference. Looking ahead, we will compete with technology, but win with people. We will be people-led and tech-empowered.”
Serving customers in a changing retail environment
As part of meeting customer needs, Walmart just announced a pilot program that enables store associates to deliver store items to customers to improve “last mile” delivery. The trial, which is early in development, pays participating store associates to deliver customer packages on their existing commute home from work, substantially increasing the retailer’s reach into suburban and rural communities.
McMillon noted other tests that will “empower and benefit customers.” They include digital endless-aisle shopping in stores, automated pickup towers in stores for online orders, pickup stations in store parking lots, robotics and image analytics to scan aisles for item availability and shelf presentation and machine learning and more advanced algorithms in pricing systems.
The CEO also mentioned initiatives designed to drive company results by creating a better working experience for associates and shopping experience for customers. They include:
• Free two-day shipping on more than 2 million items, with no membership fee;
• A discount for customers picking up online orders in stores;
• Grocery pickup in many markets around the world and delivery from stores in some; and
• Jet Fresh delivery, which provides delivery of fresh groceries to the home in 1-2 days. It is now available to half of the U.S. population and growing.
Devoted to associate development
McMillon encouraged the company’s 2.3 million worldwide associates to “be lifelong learners.” While investments are being made in technology, he stressed that people remain central to Walmart’s business.
“The secret to our success will always be our people—it will be us,” he said.
While Walmart will always be a place where associates can learn to run a store or lead a distribution center, McMillon went on to say the company is creating jobs in new areas, including data scientists, machine-learning engineers and mobile app developers.
“More than ever, Walmart will be a ladder of opportunity,” he said.
McMillon also spoke about the company’s role in serving communities.
“Customers have always trusted us for our low prices, but they also want to know that the products they buy are good for their families, the planet and the people that made them,” he said.
In one initiative, the company sources $20 billion from women-owned businesses—a goal that was met last year. It also plans to source $250 billion in products that support American jobs over a 10-year period.
The retailer also plans to source more local and sustainable products and reduce greenhouse gas emissions in its supply chain by 1 gigaton by 2030. He thanked suppliers for partnering with the company in these efforts.
“Our world is increasingly transparent and we’re out to earn trust,” he said. “When people shine a light on Walmart and see our decisions—the jobs we create, the activities in our supply chain—we want them to like what they see.”
Chairman Penner: We’re moving in the right direction
Greg Penner, chairman of the board of Wal-Mart Stores Inc., opened the meeting by reminding those present that while business is conducted during the meeting, it’s more about fun. Sam Walton started the meetings as a way to “drum up interest in our company,” Penner said.
This year, entertainers including Blake Shelton, Gwen Stefani and Ne-Yo were part of the festivities.
“At Walmart, we have a lot to celebrate. There’s no question that our company is moving in the right direction,” he continued. “We’ve demonstrated this with 11 consecutive quarters of positive comp sales growth in the U.S. and strong performance at Sam’s, International and especially e-commerce. In fact, last quarter, we grew our e-commerce business by over 60 percent.”
Penner’s own mother sent an email to Penner’s wife to thank her for encouraging her to try shopping on walmart.com again. Apparently she preferred another website to shop online but was happy with her walmart.com experience this time around.
“Feedback like that is so encouraging, especially when it comes from someone who I know for a fact is a tough customer,” Penner said. “…I’m not sure what to make of my mom shopping with that other website before. But I do appreciate her honesty and enthusiasm. If Mom says it’s true, you know it is.”
He added, “Walmart is well-positioned for the tectonic changes happening in retail. We invested $2.7 billion to raise wages and improve our training programs. We purchased Jet.com, our largest e-commerce acquisition ever. We expanded our online marketplace by millions of items—to 50 million—in the past year alone. Those are big changes, and they’re paying off. We’ve also made lots of smaller changes—many of them in the stores—that have improved the customer experience. But it’s still not enough. We have to stay aggressive.”
Biggs: We must grow comps, spend wisely
CFO Brett Biggs told the audience: There are “two main things we need to do as a company to be successful: grow comp sales in our existing stores, your stores, and in e-commerce; and spend our money wisely. It’s about doing both every day.
Biggs quoted David Glass, who followed Sam Walton as company CEO (and was present at the meeting), as saying, “There are two ways to increase profit—cut expenses and increase sales. You must do both well to succeed.”
“So how are we doing?” Biggs asked.
He answered: “In growing sales, our company is unbelievable. Last year, sales were up over $13 billion in constant currency and total revenue was $486 billion—and you all played a role in that…At Walmart U.S. we’ve reported 11 straight quarters of positive comp sales and 10 straight quarters of positive comp traffic in our stores.
“As we’ve grown sales, we’ve made important investments in our people, in technology and other key areas of the business. And that was the right thing to do. But as we’ve grown over the years we haven’t been as disciplined as we should have been in managing expenses…I know we can grow sales and be better with how we spend our money. I know it because we are starting to see expenses growing slower than sales in parts of the business. And we plan to do better as we go forward.”
He praised store #4601 in Las Cruces, New Mexico. Its sales last year were up nearly 5 percent to more than $100 million, “and profit was up even more than sales. At the same time, inventory was down. Great results.”
Since the beginning of this year, the company’s stock price has gone from about $60 to nearly $80 as of June 1.
“Would anyone like to see that line continue to go up? Me too! So, how will we do ‘both’ (grow comps and spend wisely)?
“We will grow sales by being item merchants, knowing our numbers, being in stock, and delighting customers. And when it comes to expenses, we can make a difference by finding ways to do more with less, eliminate waste, save energy costs or be more careful with supplies…
“More than ever, today’s customers have choices. So, let’s be disciplined about how we spend the money they give us…Walmart is one of the strongest companies to ever exist on this planet. We have all the resources we could ask for, and it’s up to us to continue this success now and into the future. There aren’t many things in life that are more fun that winning. And, if we can do both, grow sales and spend money wisely we will win! So let’s go do it.”
Walmart operates 11,723 stores under 59 banners in 28 countries and e-commerce websites in 11 countries and employs about 2.3 million associates worldwide. Its fiscal year 2017 revenues were $485.9 billion.