One week after Walmart U.S e-Commerce CEO Marc Lore was baptized in his first Wal-Mart shareholders’ meeting, he sat down with the analyst community at the Baird 2017 Global Consumer, Technology & Services conference in New York.
Lore said during the event held Wednesday (June 7) that he’s excited about the technology and how it can be used in conjunction with a warehouse network already in place all while completing what he considers is the missing piece.
“I think a lot of the heavy lifting is going on creating really specialized shopping experiences by micro category. We’ve got all the details just perfected. And so we are going out and hiring category specialists focused on very narrow categories and just trying to crush it,” Lore said.
He said the retailer recently hired Olympic gold medalist swimmer Nathan Adrian as a category specialist for competitive swim. Lore said Wal-Mart is hiring experts, some in narrow fields to ensure product assortment is right, the product is best merchandised and priced right.
Lore reiterated the there are really two main websites, Jet and Walmart. Both serve the masses, but have different audiences in that Jet shoppers tend to be more urban, younger and higher income than those shopping Walmart.com. Lore said Jet and Walmart.com are sharing backend services so they can leverage logistics, but the sites serve different customers. He said the specialty sites give all shoppers what they want in terms of experience and product. The win for Jet and Walmart with the recent acquisitions is the category expertise gleaned from the specialty players.
“That’s really the purpose of it,” Lore said.
He was also asked about the retail giant’s stance on fresh foods, which is considered the next frontier for e-commerce.
“I think we are really well-positioned on fresh. I mean we have got over 700 stores now with same day pickup of fresh, where we will pick the product for you and bring out to the trunk of your car, where by the end of the year, we will be over 1,000 stores with fresh pickup,” Lore explained.
He said the pickup service has a net promoter score above 80, an indication customers like it. He said the hard part is finished with the picking operation in place. The next step of same-day delivery is being tested in 10 stores now and working well, according to Lore. He said Wal-Mart’s unique advantage is in its 4,000 points of distribution around the U.S. located within 10 miles of 90% of the population.
“We have got a good game plan from fresh,” Lore added.
When asked about his collaboration with Walmart U.S. CEO Greg Foran, Lore said Wal-Mart Stores CEO Doug McMillon and the board of directors made it clear to him that Foran was a key person partner with and build a relationship to make sure stores and e-commerce are working together.
“Even before I started at Walmart, we already built a good relationship and we have been really close and making a lot of decisions jointly together about the business. We have merged the marketing and technology groups together across stores and e-comm. There is only one marketing group and there is only one technology group. And they will report to me and Greg. So we have one common brand. We have one common platform, one common SKU database,” Lore said.
Analysts also asked Lore about which categories the retailer wanted to make popular with consumers. He said there is much focus on the assortments in consumables and fresh because that’s the foundation of the relationship with customers. He said it’s not just products that can be a hero to shoppers, it’s also the experience, like smart-cart technology that allows shoppers to pull costs of the system when they build bigger baskets. This technology is what attracted Wal-Mart to Jet. Since the acquisition of Jet, Lore has reduced Wal-Mart’s free shipping minimum to $35 and launched a discount for general merchandise bought online and picked up in stores, both of which he said is driving more sales.
In terms of category specialities that have higher margins such as apparel, shoes, accessories and jewelry, Lore said the retailer is looking at acquisitions, noting some deals – Moosejaw, ShoeBuy, ModCloth and Hayneedle – have already been made.
Lore was also asked about the prospects for acquiring capabilities and he said the retailer was primarily focused on organic growth. He said future acquisitions will likely be “in the small specialty players that can help accelerate entry into the long-tail on Walmart.” The “long-tail” is a reference to selling products that are not the most commonly sold online.
He said the retailer continues to experiment with ModCloth, which is a specialty clothing – “vertical” – brand that gives Wal-Mart and Jet access to products that can’t be found anywhere else. Lore said leveraging ModCloth with Wal-Mart and Jet creates “great margins.”