Walmart: How to win at digital and physical commerce

Walmart (NYSE: WMT) is the world's largest retailer but in order to maintain that leadership position, it must continue to innovate across all channels and accelerate the development of new technology.  

"The industry moves this fast, because it's closest to the customer, and the customer's expectations move this fast," said Neil Ashe, president and CEO of global e-commerce at Walmart. Ashe sat down for a Q&A session with Randall Rothenberg, president and CEO of the Interactive Advertising Bureau (IAB) and Bob Liodice, president and CEO of the Association of National Advertisers at the IAB's Annual Leadership Meeting in February.

Ashe spoke extensively about how Walmart is managing the marriage of physical commerce and e-commerce in a rapidly changing industry. As one of the world's fastest growing e-commerce organizations, Walmart's focus is on building a commerce technology company with a firm commitment to change and inventing new solutions.

One of Walmart's biggest hurdles is overcoming what was once its greatest strength. "We are really really good at what we do. We became the largest retailer because we brought democracy of access to products back to the customer so they can save money and live better," said Ashe. The rules have changed, however, and as a result, Walmart had to change too.

"We have to bring together marketing and merchandising and operations and technology in ways that they never were before," he said. "This happens very quickly and it happens at the point of the customer, not where we choose, but where they choose. The reality is that the customer is going to interact with our organization wherever they choose and we have to deliver consistency of experience across all of those enterprises."

In response, Walmart created the "One Customer. One Walmart" strategy built around the omnichannel experience. The strategy is to focus on creating an internal organizational structure that creates an outwardly facing cohesive customer experience. "We are bringing together marketing, merchandising and technology in ways they have never been before to create one Walmart across the spectrum."

The conversation ultimately turned to Big Data and how Walmart is incorporating it into their efforts. Ashe commented on the ubiquitous use of the term and the fatigue that surrounds it.

"We set about to take "big data" the noun and take it to "big data" the verb and make it actionable. We decided to define this rather simply: we want to help our customers find one more item, we want to help our merchants sell one more item—and we want to help our operators do this by building one less facility. That's how data then becomes truly actionable."
 
With Walmart's focus on building an Internet technology company, it discovered that it had more data than anyone else, but not the ability to use it. Now that the focus has shifted to how to make big data actionable, it's manifesting itself in a variety of ways, according to Ashe. "It manifests itself in the merchandise we show the customers. For our merchants, it manifests itself in how they evaluate the products we carry. It manifests itself for operators—from scheduling to inventory allocations. Now we're partnering with our suppliers on how we can use that data to their benefit as well."

According to Ashe, Walmart is also talking to their suppliers about how to use big data to make the demand chain more efficient.

"All of this boils down to how we can deliver a better shopping experience for customers. How can we drive more retail sales, how can we help our customers be more efficient, how can we bring this data together in a way that allows us to optimize the demand chain in the same way as the supply chain?"

"At Walmart, we see a significantly broader view of the customer connection as we are moving much more to an outcomes based world," said Ashe. "The customer only cares about getting what they want, when and how they want it. In our organization, we now see a more holistic connection to that entire process."

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