Walmart's New Normal is Back to Basics
President and chief executive officer of Walmart U.S. John Furner shared his thoughts on the current state of retail as the latest executive to take part in the National Retail Federation’s retail leadership series of webinars. Speaking with NRF president and ceo Matthew Shay, Furner discussed adapting at scale to changing shopper behaviors and how Walmart is preparing for the future. Read on for quotes from Furner revealing five takeaways from the conversation.
NEW NORMAL will take us back to the basics
"Grocery is still a product quality intense sector where you’ve got to be right on quality. You’ve got to be right on price. You’ve got to have the right personal shoppers and stores who can, of course, not only prepare and stock and rotate but select the best produce and the best meat. The customer evaluates you on their last experience so we have to be right, we have to be in stock, we have to fill the orders and we’ve got to fill them with quality. Earlier in the year we all experienced quite a few out-of-stocks and the customer lowered the bar, lowered their expectations based on availability but now that we’re getting past that we have to execute and we have to be ready for the customer when and where they’re ready to shop. Over time more and more of what we’ve all got to work through in the industry is being on time, ready for the customer, given a customer who has a lot of choices that are enabled by technology."
LOYALTY in retail is the absence of something better
"People are really loyal as long as you are doing the best you can and there’s not some better alternative out there. For some customers better might be convenience; it might be quality; it might be price; it might be a combination of those; it might be at home versus in the store, some prefer the store. The better option is what people tend to gravitate to so it’s our job to constantly be watching for some change in the environment that is going to offer the customer something better than what we currently do."
WALMART+ is intended to take the friction out of customers’ lives
"What we were trying to accomplish is to make sure customers could benefit from the scale that Walmart has to offer. We had to carefully think through how a membership program works in an EDLP environment. The ultimate answer was this membership helps enable convenience for customers around the country. Having unlimited delivery for store items is a really powerful idea especially when it’s coupled with the discounts at the fuel stations and the ability to use Scan & Go inside a Walmart store. So, a lot of time savings and convenience are built into this program just inherently by design."
DATA reveals rapidly changing macro and micro trends
"[Retail] is such a scaled operation, the transactional data and the customer data – the trends that we’ve run on for so many years – is changing rapidly, so we can’t look at what happened 12 months ago compared to 12 months before that. We’ve got to look at what’s been happening the last 12 weeks and how it might reshape the way we think about holiday shopping and shopping at home."
"We think there are 10 million people in the U.S. who are fishing this year that were not fishing last year … The question is, when [the COVID-19 pandemic is] over will they keep fishing? We don’t know. Our small exercise category took off very quickly and we appear to have many more people in the country ready and equipped to do yoga. Who knows if that will continue? Early in the spring, one of our fastest growing color of hair [dye] was the color pink. That’s not a trend we were prepared for but pink was accelerating, and in June and July it became the color blue."
HOLIDAY promotions extended to avoid drawing typical crowds
"We decided to break [the big event] into three events and that will give people more time to think through shopping options whether it’s online or pickup, and our events will be much more digital than they’ve ever been before and there will be a number of items that you’ll be able to buy online or buy in stores, that will be up to the customer to decide. So it really caused us to think about what would be right for the customer and regardless of whether we're in a pandemic or not the right answer is give the customer the choice."