It's been more than 50 years since the first Walmart (NYSE:WMT) store opened, but the company is not lingering over the past. Instead, the world's largest retailer is letting go of the past and imagining what could be. In Walmart's case, this means smaller stores and new technology.
Walmart CEO Doug McMillon hosted his first shareholder meeting since assuming the post last week in Fayetteville, Arkansas. The annual event is a star-studded celebration that does double duty as a way to fire-up the employee base and communicate future strategy.
In between performances from Pharrell, Robin Thicke, Harry Connick Jr. (also this year's host) and Florida Georgia Line, McMillon outlined a future that pairs a growing number of smaller formats with an accelerated digital strategy.
"We need to get better at what we're already doing right now," McMillon told attendees. "We need to bring together the world of e-commerce with the physical world of our stores."
Walmart's global e-commerce group posted sales of roughly $10 billion last year and is forecast to reach $13 billion in the fiscal year 2014, and it is this division that Walmart expects to see the most growth. Walmart also plans to ramp up the number of small stores, with 270-300 new units this year. Some will be the still experimental Walmart Express, but the majority (180-200) will be Neighborhood Markets, according to the company.
The strategy is being driven by changing shopper needs. While Walmart's customer has always been motivated by value and quality, convenience is increasingly a factor. Convenience means different things to different shoppers, and Walmart is devoted to delivering on that promise in a variety of ways including a wider range of digital delivery options.
The retailer is testing delivery to smaller stores of general merchandise items sourced from a nearby supercenter. The "site to store" program lets shoppers order items from an in-store kiosk, making it easier to pick up milk and a canoe for next weekend's camping trip. There's also a Walmart to Go test in Denver that lets shoppers order goods and collect items at designated locations not attached to a physical store.
"Retail has moved from being a push system, where we put merchandise in our stores and people come buy it, to where customers pull items and we bring it to them," McMillon told the media following the meeting. "Think of Walmart as a continuum of stores. We have a system that can accommodate this, we just have to make some changes over the next few years."
"Let go of the past and imagine what could be," he said.
Walmart gave the press a rare peek into just that during the days preceding the shareholder meeting, including a visit to the Walmart Innovation Center, a facility usually closed to everyone but employees and select vendors. Here, Walmart displayed new technologies including water-marked packaging that will speed the checkout process, conductive ink that will improve inventory management when used as shelf liners, and 3D printing, a technology Walmart executives are extremely bullish on, both in selling printers as a consumer product and as an opportunity to generate a new services program to create custom products.
But change won't happen overnight, McMillon said. In typical Walmart fashion, McMillon referenced Sam Walton saying that Walton made it his personal mission to make constant a vital part of Walmart's mission. To make sure the company could "turn on a dime."
"What would Sam say," asked McMillon. "I think he would say, 'go.' He might even say, 'hurry up.'"
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