The Supply Side: Walmart, Carrefour lead with digital-first transformation

According to Northwest Arkansas retail analyst Scott Benedict, brick-and-mortar legacy retailers and many of the brands they sell continue to need help to become true omnichannel with a digital-first mindset and blend the formerly siloed businesses of in-store and online sales and merchandising.

Benedict, an affiliate partner at Chicago-based consulting firm McMillanDoolittle, said there still needs to be more education among sales professionals and other workers regarding omnichannel and the interconnectivity between the two modes of commerce.

“Overspecialization of your leaders on one side of your organization can hinder the company’s long-term success in today’s changing world,” Benedict said. “It is necessary to understand all the aspects of omnichannel. It has to start at the top, and Walmart and Carrefour are leading the mass retail world in this ongoing transformation.”

Walmart decided to consolidate its online and in-store buyer teams following the departure of Marc Lore in 2021. Lore ran the e-commerce business with a digitally native mindset, given that he formerly worked at Amazon and founded Jet.com, an e-commerce business. During most of Lore’s four-year tenure at Walmart, his counterpart was Greg Foran, who served as CEO of Walmart U.S. from 2014 through 2019. Both were lauded as strong leaders for Walmart, but their mindsets were worlds apart.

Foran was a veteran operator credited with cleaning up the stores, improving on-shelf availability and store execution to drive more sales and improve net income. Lore worked to improve delivery times for online orders and acquire digitally native specialty retailers to expand the inventory for online shoppers rapidly. Online merchant teams were based in San Bruno, Calif., and in-store merchants and sales teams were based in Bentonville. There was a distinct difference in the businesses and the expertise of merchant teams and leadership.

John Furner replaced Foran in 2019 as CEO of Walmart U.S. and saw the need for more cohesion between the businesses. When Lore left in 2021, Furner took over leadership of both businesses and, over the next two years, merged the merchant, merchandising and marketing teams. For example, a buyer for baby diapers is now over the entire category for sales in stores and those conducted on Walmart.com.

At the same time, Walmart sold off the specialty online businesses acquired during Lore’s tenure and chose to expand its e-commerce offerings through a growing marketplace attracting brands like DELL, Eddie Bauer, Toms and pre-owned sellers like thredUp with more than 100,000 active sellers, according to Marketplace Pulse.

“Stores, online and marketplace are all important, and they complement each other. And they are all there on behalf of the customer. What’s important to us is that our customers can get what they want from us however they want,” Furner said at the recent Marketplace Summit held in Las Vegas.

As Walmart pulled back on new store additions, future growth will need to come from expanding e-commerce sales and other services such as fulfillment for third-party marketplace sellers, advertising, market data insights and third-party delivery for smaller retailers with its GoLocal platform.

Walmart CEO Doug McMillon describes the business as a people-led, tech-enabled omni retailer that serves customers how, when and where they are. He said business is changing, and aside from retail sales, it will earn revenue from online, marketplace, and other services in future years to create a more balanced model and revenue-generating ecosystem.

“Today, our customers can open the Walmart app on their phone and see our biggest store, and it could get bigger as we build out the marketplace,” said Latriece Watkins, chief merchandising officer for Walmart U.S.

Likewise, French-based retailer Carrefour is undergoing a similar transformation with its multinational businesses that it began in 2018.

“We are transforming Carrefour, a traditional retailer with e-commerce capabilities, into a digital retail company, which places digital and data at the heart of all its operations and its value creation model,”  Carrefour Chairman and CEO Alexandre Bompard said. “This profound change, which we intend to carry out by 2026, will unleash the full potential of omnichannel, which is today the DNA of Carrefour and a unique asset in the industry.”

Carrefour and Walmart added more technology toward more efficient fulfillment of online orders, expanding delivery platforms and remodeling stores to have connectivity online with displays and IQ codes that can be scanned for online orders of items seen in stores.

“The connectivity between stores and online is important. Consumers can pick out the large-screen TV they want to buy in a store but then order it online via the retailer app for delivery. The same goes for beds, refrigerators and large patio sets. Not everybody has a truck or wants to lift and move the items themselves,” Benedict said.

In June, Walmart said the stores that it had remodeled to connect more online merchandise displayed in stores had seen a lift in overall sales, and it expanded the number of remodels this year and next.

Walmart and Carrefour added service options to their mobile apps where shoppers can book appointments for car service, request a prescription refill, order a custom cake from the bakery, or use the scan-and-go function to skip the checkout line in stores.

“We understand one of the best ways to reach customers is via their phones, which is also the nearest store for most consumers,” according to Tom Ward, chief e-commerce officer at Walmart U.S.

Benedict applauds the efforts in the past two years for Carrefour and Walmart, but there is more work to be done. One area where Benedict sees a deficit is in the cross-training for the employees coming from separate business operations into one omnichannel initiative. He said that for businesses to truly become omni-focused, everyone has to understand what it means. It’s not a bolt-on initiative.

He said those coming from digitally native businesses have a slight advantage over those coming from brick-and-mortar because they have long understood how vital searchability online is to being found in a sea of products. Also, they know the importance of detailed product pages, reviews and ratings and multiple delivery options, which consumers expect.

Brick-and-mortar retail has been about getting items to stores on time to get to allotted shelf space and selling at a price agreed upon and replenished as necessary. Advertising primarily consisted of rollback price adjustments to get unique displays in high-traffic areas, he added.

Benedict said two different worlds converged as one, but training has lagged, especially brands that were slower to sell online. He said many brands selling in Walmart have yet to marry their online and in-store sales and marketing teams, putting them behind the curve in growing their business with Walmart and other omnichannel retailers.

Benedict said that with a digitally savvy leadership team, brands and retailers alike find that traditional business processes, including pricing, assortment strategy, logistics and supply flows, require a new approach to support their transformation into a digital-first, consumer-focused organization.

“This omni-transformation will contribute to improving the customer experience, with greater personalization and operational efficiency at headquarters as well as in stores. It will also have positive effects on the firm’s net promoter scores (customer approval), revenue and operating income,” Benedict said.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Firebend.