As this issue of MMR was going to press, Walmart was widely reported to be in the midst of serious discussions with Lord & Taylor about bringing the department store operator’s merchandise offerings to walmart.com as part of a larger effort to counter the appeal of Amazon in the battle to win the hearts and minds of American consumers. The Wall Street Journal, quoting people familiar with the situation, said that Walmart intends to create a virtual online shopping mall that features premium products, along with mass market goods. More traditional retailers and such Walmart-owned e-commerce companies as Jet and Bonobos, could also be added to the site, according to the Journal.
Whatever ultimately results from the talks with Lord & Taylor, the potential deal is only the latest in the series of bold moves that has come to characterize Walmart since Doug McMillon became chief executive officer in 2014. Under his stewardship, the world’s largest retailer has thrown off the conservatism that almost invariably overtakes companies dominant in their field and set out to reinvent itself for the digital age.
McMillon and other key members of the management team provided a progress report on the ongoing metamorphosis of Walmart at the company’s analysts day earlier this month in Bentonville. “We have good momentum in the business, we’re executing our strategy and moving with speed to win with the customer, who is more connected than ever and embracing tools that will save them both time and money,” said McMillon. “We’re combining the accessibility of our stores with e-commerce to provide new and exciting ways to shop.”
The pivotal phrase in McMillon’s remarks is “moving with speed.” Walmart has acted decisively over the past three years to shore up and capitalize on its existing strengths, which are formidable, while simultaneously developing digital-based capabilities that enable it to meet the needs of customers whenever, wherever and however they choose. Significant developments have occurred at a dizzying pace. As McMillon pointed out in his presentation to analysts, since June 2015 the company has, among other things, added 8,000 department managers, raised the wages of associates, rolled out Walmart Pay nationwide, installed its first in-store Pickup Towers, offered free two-day shipping on walmart.com for orders of $35 or more, and introduced Mobile Express money and pharmacy services. In just the past few months, Walmart has formed a partnership with Google to deliver personalized voice shopping, opened its 1,100th online grocery location in the U.S., and raised the number of items available on its website to 67 million.
Arguably the most important development during that period was the acquisition of Jet in September 2016. Not known for throwing its money around, Walmart paid $3.3 billion for the e-commerce company, and the investment has already paid off by accelerating the development of the retailer’s digital assets and its understanding of consumers who want to do some or all of their shopping online. As a result, Walmart expects a 40% increase in e-commerce volume — which is projected at $11.5 billion this year — in fiscal 2019.
The intense level of activity will enable Walmart to keep pace with evolving consumer preferences. As McMillon well knows, retailers that succeed are those that provide real value — however the customer defines it. Based on the work now under way at Walmart, it is a sure bet that the company will remain in the forefront of that group.