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Back in May, C. Douglas McMillon, President and CEO of Walmart Stores, Inc. said he was excited about his company building a customer-centric culture.
Fast forward five months and McMillon outlined the company’s growth strategy, including plans to invest in new capabilities and to continue improving the customer experience at all Walmart stores.
During the company’s 21st Annual Meeting for the Investment Community on Wednesday, McMillon addressed how Walmart is well-positioned to meet the needs and preferences of an ever-evolving customer base and improving on four key customer dimensions–price, assortment, experience, and access.
“Customers make their shopping decisions based on four key dimensions–price assortment, experience, and access,” McMillon said during his opening remarks. “What we can offer them, and how we compete across those dimensions, is changing. Today, a customer has a desire for more items, more assortment, more choice than ever before. We have tens of millions of customers visiting us weekly online and through our mobile apps looking for information, product options and then buying merchandise from us in stores and online. We’re known for assortment and we will be in the future.”
McMillon said price always matters to Walmart customers.
“As a company, being a low-cost operator is in our DNA,” he explained. “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.”
McMillon said that winners in retail will be able to successfully combine in-store and online.
“Frankly, we think we’re already doing the harder part,” he said. “Locations matter because convenience matters. We have the stores, the associates, and the expertise in the physical world that others will need to build. To capture the upside of our strategic advantages, 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.”
Corporate strategy will guide Walmart’s capital discipline.
“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,” he said. “Specifically, we will moderate the growth of investments in stores, and we will increase our investments in ecommerce.”
McMillon said that Walmart’s supercenters in the U.S. should be delivering positive comps consistently.
“Our combination of pricing, in stock, service levels and merchant skills will generate improved performance in our supercenters,” he said. “Our Neighborhood Markets continue to be a bright spot in terms of comp sales.”
He said Sam’s Club is thinking creatively about the future of its business and has made some changes with membership rewards and credit offerings designed to strengthen its position and performance.
Regarding ecommerce, Walmart is continuing investment in its new technology platform, rolling it out to customers, continuing to build its next generation fulfillment network and expanding assortment.
McMillon noted three keys that will drive Walmart’s success in the future.
“First, we’re going to position ourselves to do a better job serving customers,” he explained. “We can create a next generation customer proposition through the combination of what we do with price, assortment, access and experience. We will save them money and time. Second, our priority is growth. Driving demand is the only sustainable way to deliver returns over time. Finally, we’ll manage capital in a disciplined, thoughtful manner.”
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