Walmart execs say the retailer will ‘go hard’ on connecting e-commerce with stores

by Kim Souza ([email protected]) 1,142 views 

(from left) Marc Lore, CEO of Walmart U.S. eCommerce, Ashley Hubka, senior vice president of corporate strategy at Walmart, and Greg Foran, CEO of Walmart U.S. address the media May 31 during Walmart shareholder week.

Walmart executives talk often about “frictionless shopping.” Greg Foran, CEO of Walmart U.S., and Marc Lore, CEO of Walmart U.S. eCommerce, recently told the media the retailer will be more aggressive in connecting e-commerce to its more than 4,700 stores.

“Customers today are ambidextrous and they see just one Walmar,” Foran said. “You are going to see [Walmart] go hard after omnichannel shoppers because they spend twice as much as those who just shop in stores.”

Walmart records 150 million sales transactions a week in its U.S. stores and millions are also made online, but the sweet spot for the retailer is when shoppers utilize both – omnichannel – shopping formats. Foran said the supply chain has to be aligned for omnichannel to work efficiently. He said for the better part of two years investments have been made in additional fulfillment capacity and in technology deployed in stores.

“We think we have some good assets and now we have to execute,” Foran told the media during shareholders week.

Lore said stores are a big advantage to the e-commerce effort because it gives the company 4,700 potential pickup locations where inventory has been received in full truckloads — the most economical way to ship goods.

“Our stores have the freshest products and this cold chain capability is hard to replicate in the e-commerce realm,” Lore said. “Because we can ship to store we can offer pick-up discounts for general merchandise and pass the savings on to our customers.”

He said online grocery is doing well because it’s convenient for customers. The service has garnered Walmart a “net promoter score” in the mid 80s from customers who use the services regularly. NPS is a tool used to gauge loyalty of a retailer’s customer relationships.

While Walmart’s e-commerce sales grew 40% last year, it still represents a fraction of the retailer’s total sales. Last year physical store sales comprised 78.3% of the revenue generated by Walmart. Brick-and-mortar (largely supercenter) sales around the globe last year totaled $422.9 billion at Walmart. E-commerce sales across the globe totaled $20.2 billion last year ranking the retailer the 7th largest e-commerce platform. The recent purchase of a majority share in Flipkart should move Walmart into sixth place ahead of Rakuten which had $23.1 billion in sales last year, according to Retail Planet.

EXECUTIVE OUTLOOK
Foran said the market is radically changing at speeds he hasn’t seen in his 40 years in retail.

“You have to play and get on with it or get left behind and that’s why we are testing so many things,” he said. “The technology being added by Marc’s team is giving us a better chance to win. Execution will be the difference between the winners and losers.”

Lore said the Walmart.com redesign should help with technology-native shoppers. He said the site looks more like a modern shopping experience with buttons featuring the best-selling items in a customer’s local market.

Lore also said the company is getting its bearings around conversational commerce and machine learning tools because artificial intelligence (AI) is gaining ground among shoppers. He said customers care about price on basic items and they are unbelievable judges on value.

Foran the next five to seven years as retail converges between online and in-store is a real “sweet spot” for Walmart.

“We have to remain reasonably nimble and not lose sight of long-standing retail principles,” he said.

EASY RETURNS
Walmart recently launched an easy return policy that allows shoppers to return items to stores in one step when they activate the app service. Walmart demonstrated a product return for the media during the shareholder week tours.

Mark Matthews, vice president of Walmart services and digital acceleration, told Talk Business & Politics the easy return works for items bought in store or online. He said when using the app service the item is located in the customer’s electronic receipt and the return transaction is done on the backend making it easier for store employees who simply take the item from the shopper. There is no need to ring up a return on the register, nor have the shopper show their identification and sign the return slip. The return is credited back to the card on record and no cash changes hands.

Walmart has signage at the customer service desk for the easy returns, a separate line similar to the pharmacy for online refills. Often there is just one employee working in the customer service area and there could be a line of people trying to return items or cash checks. Matthews said shoppers who are using easy returns should go to the counter in that express lane and the worker will get to them next, much the way TSA does for passengers using TSA PreCheck at the airport.

He said shoppers may have to wait a few minutes, depending on how busy the store is, but once the cashier gets to the shopper, they merely check the code on the mobile device and take the item.

IMPROVED APP
Walmart has worked to improve the functionality of its mobile app. Foran said the mobile app is the glue between his business and Lore’s online division.

“The app is designed to be functional and instinctive so that it can help shopper experience and help our associates do their jobs,” he added.

The store assistant feature recently unveiled in the Walmart app allows a customer easy access to all the tools needed to make the shopping experience fast with features like Walmart Pay, item search and find, product reviews, and price checks. It even tallies up the basket total as the shopper adds products.

Walmart also added a list feature because 80% of its customers said they make a list before going to the store. The app seeks to help shoppers more easily build their shopping list. The new list feature has the ability to understand a general word like “milk” and know what kind of milk the shopper usually purchases. It will check the item stock at the local store of the products placed on the list using the app.

STRATEGIC PARTNERSHIPS
Walmart is also actively taking on new partners to help in e-commerce and omnichannel. One of the less talked about partnerships has been a deal with BuzzFeed’s Tasty Recipe app, which floods social media sites like Facebook and Pinterest with food videos on everything from healthy snacks to buttery comfort foods.

Tasty has attracted more than 65 billion video views and its the biggest franchise on Facebook, with more than 90 million followers.

Sumaiya Balbale, vice president of mobile and digital marketing from Walmart.com, said when consumers open the BuzzFeed Tasty app to view any of the their 2,000-plus recipe videos, they will find a direct link to Walmart.com and Jet.com for any of the items needed to make the entree, including kitchen tools, bakeware and appliances. The partnership was established in December and the retailer plans to add food ingredients which can be purchased by Walmart online grocery.

David Gray, of Planet Retail, recently said the Tasty app partnership is a strategic plan for Walmart to grab Millennial marketshare. He said this a new path for shoppers to find Walmart and Jet and easily purchase items they need to cook the dishes. He said as Walmart works to grow its U.S. online grocery and delivery business, more strategic partnerships will be needed for the final-mile leg.

Foran said Walmart continues to test and evaluate the home delivery model using external partners. He said Walmart recently stopped the delivery testing in New Jersey and started in Georgia. Foran said it’s more rapidly looking at using the crowd-sourcing model for final mile as their are hundreds of small companies in local areas to source.

“I would say we have gone from version 1.0 to 2.0 at this time but we are still testing,” Foran said.

Gray said Walmart is also looking for opportunities to use technology to enhance the in-store shopping experience in some categories like beauty. The retailer recently partnered with Modiface to test virtual reality kiosks in five of its stores last fall. Shoppers can see their look with certain shades of product before they buy a product.

Modiface is a virtual reality makeup mirror and utilizes touch-screen technology to interact with shoppers. There is also a “tester strip” nail polish station where shoppers can apply different colors to their names, without the usual mess or inconvenience.