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NEW YORK — Walmart is increasingly becoming a technology company, seeing its transformation into an omnichannel retailer as critical to its continued growth. But Walmart president and chief executive officer Doug McMillon insists that retailing is still a people business, and “our people will ultimately be the way that we win.”
McMillon spoke about people and technology with National Retail Federation president and CEO Matthew Shay at the “Retail’s Big Show” conference, held here earlier this month.
“The way the customers feel when they leave the store, or your website or app, determines how fast they’re going to come back,” he said. “And there’s a piece of humanity here that really matters. In our case it’s 2.3 million people around the world, most of them on the front line interacting with customers, and we want them to know how much we care about them and how much we value their work.”
McMillon’s appearance came just days after Walmart announced that it was boosting the starting pay of its U.S. store associates to $11 an hour, as part of an improved benefits package that also includes expand maternity and parental leave benefits, a one-time cash bonus for eligible associates that tops out at $1,000 for those who have been with the company for at least 20 years, and a new benefit to help employees with adoption expenses.
The pay hike and the other benefits were described as a response to the tax reform legislation passed by Congress, but McMillon said they also reflect Walmart’s commitment to investing in its people.
“So as we make investments in technology, and learn how to put artificial intelligence to work at Walmart, or how to automate certain functions, we want our people to go through that with us, and help contribute ideas and be part of that process,” he said.
McMillon argued that investing in the workforce — not only in terms of wages and benefits but also by providing training — is a smart strategy and part of the future for every retailer. He added that the tools Walmart associates are using in the stores are helping them work more efficiently while also making their jobs more enjoyable. He cited as an example an associate named Amanda in Oklahoma City who is using an app on a handheld device that helps her do section work in the dry grocery department — making sure the planogram is set up the right way, with the right number of facings and the proper signs and tags in the right places.
“She’s using an app to do that, and to implement other things that in the past would have either been paper based, or would have required her to run back and forth to the backroom,” he said. “And now she’s doing it in a more efficient and more enjoyable way, which I think is really important. And now all the time that is freed up by her use of a better tool and a better process is being used to interact with customers, or to think about what she wants to feature in her department.”
Embracing change has long been a part of Walmart’s corporate culture, and it was one of the priorities championed by founder Sam Walton. McMillon explained that the company aims to remain true to the principles established by Walton, while staying ahead of the ever-accelerating pace of change that is transforming the retail industry.
“What we’ve tried to do in recent times is to say the purpose is the purpose, the values are the values, but everything else is open to debate and may change,” he said.
That willingness to embrace change, both at Walmart and at other retailers, makes McMillon optimistic about the industry’s future. Asked about the threat of a “retail apocalypse,” McMillon responded that to expect that fate “is to underestimate the creativity and the ability to execute of the people in this room.”
He added that ultimately it will be the customer that decides whether the industry prospers in the years to come.
“People are making choices every day about where to shop,” McMillon said. “They’re very rational, and they make choices — sometimes they may be subconscious or intuitive — but they make choices about price, assortment and experience.
“So we need to move forward in a way that helps us increase value, that continues to offer the broad assortment they’re looking for, and that is also constantly improving the experience, whether it’s on app, through the spoken voice or someday through VR — regardless of the vehicle. If we’re better at all that, then we’re going to be here. And if we’re not, we won’t.”