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At Wal-Mart Stores Inc.'s 21st Annual Meeting for the Investment Community, President and CEO Doug McMillon spoke about the mega-retailer's growth strategy, which includes plans to invest in new capabilities and improve the shopping experience.
According to McMillon: “Customers make their shopping decisions based on four key dimensions – price assortment, experience and access. What we can offer them, and how we compete across those dimensions, is changing.”
Noting that today’s shoppers want "more items, more assortment, more choice than ever before," he affirmed, "We're known for assortment, and we will be in the future."
On the subjects of price and customer experience, McMillon said: "Price matters to our customers, and it always will. As a company, being a low-cost operator is in our DNA. This will never change. and we will be the price leader, across a broad assortment, everywhere we operate. Experience is about customer service. From our associates in stores to our engineers and data scientists, we'll invent new ways to surprise and delight customers."
To do that, McMillon observed, “we need to develop a more seamless relationship with our customers. We won't just be a store on the street. We'll support our customers' lives, with them in the driver's seat, to save them money and time. We'll give customers the choices they want and need by integrating digital and physical retail. As we have many times before, we'll exceed our customers' expectations, and as a result, we will win the new era of retail."
Capital Discipline Shift
Heralding "an enterprise-wide approach" to growing the company, McMillon noted: "The internet, mobile, data and technology present opportunities across the world and across our businesses to better serve the changing customer. We've taken a fresh look at where we want to play –- what businesses, markets, formats and services we need and how to win –- what our customer value proposition should be."
He added that this strategy would determine Walmart's actions concerning capital discipline, explaining, "We will change the mix of our capital spend through reductions in areas we have invested in historically to fund investments in new growth opportunities. Specifically, we will moderate the growth of investments in stores, and we will increase our investments in e-commerce."
McMillon also said that boosting the company's short-term performance is a priority across all segments and markets. "Our supercenters in the U.S. should be delivering positive comps consistently," he observed. "Our combination of pricing, in stock, service levels and merchant skills will generate improved performance in our supercenters. Our Neighborhood Markets continue to be a bright spot in terms of comp sales."
As examples of other performance-strengthening measures, he mentioned that Sam's Club has made some changes to its membership rewards and credit offerings, while Walmart is continuing to invest in its technology platform, rolling it out to customers, building its next-generation fulfillment network and expanding assortment.
McMillon then spotlighted three key points that will drive the business going forward: doing a better job of customer service "through the combination of what we do with price, assortment, access and experience"; spurring demand, which he said is "the only sustainable way to deliver returns over time"; and managing capital "in a disciplined, thoughtful manner."
Bentonville, Ark.-based Walmart operates 11,100 stores under 71 banners in 27 countries, and e-commerce websites in 11 countries employing about 2 million associates worldwide.