NEW YORK — "The purpose is the purpose, the values are the values. Everything else is open to debate and may change."
That was the heady advice from Walmart CEO Doug McMillon at the Nation Retail Federation's Big Show on Sunday. The world's largest retailer has recently changed much in terms of internal policies and external acquisitions, but McMillon stressed the core values underlying the company's promise have remained the same.
One big change at Walmart has been its focus on store-level employees. Last week, the company announced a new, higher starting minimum wage of $11 per hour, expanded benefits and a $1,000 cash bonus for qualifying employees. With the creation of training academies, Walmart isn't just improving employee programs, it's talking about it publicly — another shift for the retailer.
"At some point, Walmart became big and societal expectations changed, and we missed the memo."
Doug McMillon
CEO, Walmart
"At some point, Walmart became big and societal expectations changed, and we missed the memo," McMillon said. "In the early years, when people would write good things about Walmart, Sam [Walton] would say, 'Ignore it and don't let it go to your head.' When they started to say bad things, we ignored that, too."
Walmart has been working hard to address these issues — both the consumer perception and the policies needed to fix things. This shift has produced initiatives to reduce Walmart's greenhouse gas emissions and carbon footprint. Some divisions are already 90% to their goal of achieving 0% waste.
Changes are being made to not just employee benefits and training initiatives, but also by embracing technology to support the company's transformation. One of the biggest changes, of course, was the $3.3 billion acquisition of Jet.com. The deal brought Marc Lore to Walmart as well as a renewed focus on technology investment to support innovation.
"Marc is a merchant first, not a technologist. That really clicked for us. We really felt we had kindred spirit there," said McMillon. "We also loved smart cart and what they did there."
Jet's smart cart technology allows shoppers to reduce the cost of goods by selecting from a variety of shipping options — and a longer shipping window will reduce the price on an item. "You do that," he said, "and the retailer ends up with a bigger basket."
Technology is helping Walmart move toward this goal, and quickly. One of the biggest tasks for Store No. 8, Walmart's startup incubator, is to accelerate development and adoption of new technologies, Lori Flees, senior vice president of next-gen retail and principal for Store No. 8, told conference attendees on Monday.
The goals of Store No. 8 are to find new talent or technology, set it up within the larger organization to speed it to market and make sure there's dedicated budget to make that happen. It's a unique proposition for a company the size of Walmart and it speaks to the company's willingness to embrace change. While Walmart must remain focused on the now — or at least the next fiscal quarter — Store No. 8 is looking three-to-five years out, Flees said.
"We need to be disrupting ourselves and our business — to lean into these disruptions earlier rather than later."
Lori Flees
Senior Vice President of Next-Gen Retail and Principal for Store No. 8, Walmart
"We need to be disrupting ourselves and our business — to lean into these disruptions earlier rather than later," she said. "To have the vision and invest in pieces and keep them separate, so they're not distracted by the core business."
Walmart is "becoming a different type of technology company — we've been one for a long time, but we've become a different type of one," said McMillon. "One that supports change."
McMillon may be the last Walmart CEO to have known and worked with its founder Sam Walton. He spoke of the company's core principals and need to serve the customer, above all else.
"It's job number one," he said. "We need to not get comfortable. We have a lot of work to do. You can't slow down change."
