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BENTONVILLE, Ark. — Walmart will reestablish itself as a leader on price as it works to improve the shopping experience for its customers, declared Greg Foran, head of Walmart’s U.S. business.
Walmart will reestablish itself as a leader on price as it works to improve the shopping experience for its customers, declared Greg Foran, head of Walmart’s U.S. business.
"We have opportunities in price, and whilst we have pockets of leadership, in more competitive markets our gap is too small and, against some competitors, we are beaten," Foran said at the beginning of this month while providing investors and analysts with a "strategic update" on the repositioning plan Walmart unveiled in October. "What is more, we lost a little bit of our muscle for reacting quickly, and we have strayed from executing some of our EDLP [everyday-low price] principles consistently."
Walmart is developing new tools for competitive pricing, he said. "We are looking at how we source products in a very systematic, sensible way, including commodity pricing, especially as we see some of these materials falling worldwide. … We use the productivity loop to deliver lower prices to our customers."
As it works to push down prices, Walmart is negotiating the "very best price" from suppliers so it can pass along the savings to customers, Foran said.
Meanwhile, Walmart is also making significant investments in its e-commerce platform and in higher wages and increased training for employees, Foran said during the investors conference.
Foran became president and chief executive officer of Walmart’s U.S. business eight months ago. Since then, he has made at least 116 unannounced visits to Walmart stores for a firsthand look at the retailer’s "core operations," he said.
"Whether it is walking with the third-shift overnight managers in Wichita or stocking the shelves with our associates in Sioux Falls or talking about out-of-stocks with customers on the sidewalks of Nashville or listening to customer calls at our call centers, it’s been a busy few months," Foran told investors. "I see lots of opportunities to get the basics better," he added.
Prominent among them are improvements in assortment, store design, inventory quantity and product flow, employee training, and the integration of Walmart’s physical stores with its digital marketing capabilities.
Foran said he and his team intend to make progress on each of these opportunities in the weeks and months ahead.
"We want this year to be the year of improving our stores so by the time we hit the holiday season our stores are clean, tidy, well merchandised and run by engaged associates," he said.
Product assortment is "the lifeblood of the business," Foran added. "When we get the assortment right, we know that the customers respond."
To improve the assortment, Walmart has rolled out a number of initiatives, including a campaign to institute "an assortment discipline" and steps to improve the fresh food, private label and omnichannel operations.
"We know that we have lost some of our muscle in building a customer-relevant assortment," he said, "and we have been slow in using data to help achieve this. I am pleased to tell you that this project is now well under way and we will roll it out sensibly and carefully over the next 18 to 24 months.
"We are establishing customer decision trees based on data and how our customers shop, building sustainability and loyalty tools to assist with choice, and driving discipline around the design and building of modulars in-store."
As it improves its ability to deliver a customer-relevant assortment, Walmart is taking steps to make stores more accessible and convenient, Foran said. "Our customers want to save even more time today, and we have an incredible advantage to serve them, given our large store base and supply chain."
Foran says he sees a big opportunity for Walmart to improve its omnichannel operations. "The big prize for us in the future is the integration of digital and physical," Foran said. "If I were running a pure-play Internet company at the moment, one thing I would love to have is 4,500 — growing to 5,000 — distribution points [in the vicinity] of where 90% of Americans live and a supply chain that can get product there really quickly.
"We have some good ideas in that space, and we’ve got to make sure that we develop the tools and technology to get there."
Walmart will remained focused on growing sales and market share, he said. "I believe Walmart is the greatest retailer in the world, and I am truly honored that it’s in our DNA to be always looking for better ways to serve customers."
