Walmart is continuing to make a name for itself in the tech space. Just this month, the Bentonville, Ark.-based big box retailer announced two drone pilots and launched members-only Walmart+.
U.S. President and CEO John Furner, in a conversation this week during KeyBanc Capital Markets’ Future of Technology Series, elaborates on each of these initiatives and shares what else the giant company is doing to show it “thinks like a startup.” Quotations are from a Sentieo transcript.
The Last Mile
Furner said each initiative is aimed at helping the customer “do one of three things and do that really well.”
“We want to help the customer shop in the store, if that's what they choose to do. Second, we want to be there if the customer needs to pick up. And then third, if the customer wants something delivered, we can handle all three, and we'll be able to do that in a number of different ways. But we want to make this a really seamless choice for the customer.”
Furner said the Walmart+ offering—which, for $98 a year, provides subscribers unlimited delivery; a fuel discount at Walmart-owned gas station, Murphy gas stations and still-to-come Sam’s Club stations; and scan-and-go capabilities powered by Walmart Pay—is all about time.
“We always talked about quality and price, but you almost have to then subtract time taken away from customers as a detractor from the value equation. And so what this membership does, amongst other things that we're doing in the business, is to give people time back,” he said.
Furner said its Express Delivery service, which gives shoppers the option to pay a fee for faster fulfillment, backed by AI systems that gauge where it can be efficiently offered, went from idea to pilot in “just about three weeks,” and that a similar pace of iteration could arrive to other areas of the business.
“That was an idea that we knew that we needed to work on,” he said. “We've got another big group of changes in optimizing supply chain at the local level. Those are things that the team have now implemented it to come just six weeks from the idea until they could launch. So we've got to be out in days or weeks, not weeks or months.”
Sam's the 'Innovation Hub'
Furner said Sam’s Club, the retail warehouse clubs owned and operated by Walmart, has “become an innovation hub for the company” in the past few years. The retailer’s scan-and-go that is part of its Walmart+ service got its start at Sam’s stores.
“The innovations coming out of Sam's are fantastic and things like Scan & Go, there are a couple more that we're working on, we're able to just take from Sam's and put them at scale at Walmart because of the way that they're thinking through the tech,” he said. “A lot of innovation will continue to happen there but also at Walmart. Innovation happens all around us. I think what's interesting this last year is the pace of consumer change has gotten to a point where innovation and ideas can come from just about anywhere in the globe.”
Lessons From Living in Asia
Furner lived in Asia for a few years in a stint with Walmart China, and described witnessing first-hand how the pace of change differs from the U.S.
“[I] saw what happens when an entire generation of technology was skipped. That was a part of the world where desktops and laptops are never that prevalent, and that these big civilizations ... just went straight to mobile,” he said. “So when you start with a commercial mindset and a mobile mindset first, then we're able to put things at scale that feel like they would have been developed just very recently.”
Walmart channeled this notion with its Ask Sam application, which Furner said they “just put in front of the field.” The app allows associates to send and receive help from the sales floor via voice messages.
“Every day, associates all over the country are asking, clearly, tens of thousands of questions. The questions are everything from functional questions to merchandise questions to their schedule,” he said. “This input of questions gets us in a position where we can really analyze the things that are important to our associate base, then go react to those and build them better solutions to take the friction out of the workplace.”
Robotics and AI
When asked about embracing robotics, Furner was quick to note Walmart’s IRL (Intelligent Retail Lab), an in-store lab at a New York Neighborhood Market store that uses an array of sensors, cameras and processors to detect out-of-stocks, as an experiment that has been successful.
“That's an experiment that has now been integrated into the core business and is helping us determine where inventory is, the way that inventory is moving out of the building and help some things like inventory control so that you can be in-stock for customers,” Furner said. “It's an example how Walmart thinks like a startup, can think small like a start-up, create a company inside the company, let it run on a bit and then bring it in.
“What robotics and the supply chain are helping us do is deliver inventory that's palletized, ready to go, by aisle and so associates no longer have to unload trucks in the back that are full-loaded, sort it out, get it to the right department. It's just a streamlined process where what comes in is ready to go directly to the counter and it's set in order,” Furner continued.
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