For the world’s largest retailer, Walmart, many of those changes are sticking around for the long haul, with more transformative investments coming, according to CEO and President John Furner, who recently spoke about the company’s current and future strategies at the National Retail Federation’s virtual live event, NRF Retail Converge.
As for what changes from the pandemic are likely to stick, Furner says “it’s probably too early to tell.” Spurred on by the pandemic, Walmart has accelerated its digital operations investments like many other retailers who scrambled to keep up with consumer demand for online purchases.
“It definitely was [too early] last year, but what had happened last year was we skipped about four years worth of change, evolution and growth in the e-commerce space,” he said. “There’s still some settling to do. The underlying trend of [the pandemic] is what the trend would have been, seeing a shift from in-store shopping” to other options including delivery and buy online pick-up in store (BOPIS).
However, how Walmart positions itself and thinks about the needs of the customer, from the in-store experience to the supply chain, has somewhat changed. While its core values will remain the same, the retailer is moving faster to meet rising consumer expectations, Furner said.
“We need to be anticipatory by putting ourselves in a position where we can keep what people need in stock,” Furner said. “[We] spend time thinking about where the customer is going, where the market is going. We've gotta be at least as fast or faster than our competitors. … It's about being competitive and moving faster and faster than the market.”
Furner’s comments come as the company recently reported a 37% increase in e-commerce sales during the first quarter of 2021, following huge increases in 2020 as well. Walmart’s customers are increasingly ordering products online, ensuring that the retailer will continue making investments in omnichannel and digital operations for some time to come.
Walmart is also looking to continue speeding up its digital capabilities, as are other competitors. Forced by the hand of the pandemic, consumers now expect fast delivery options, while retailers are still grappling with supply chain constraints from the pandemic. These challenges include port congestion, shortages and higher demand.
“We’ve got to be able to handle the complexity of the supply chain in the background,” Furner said. “I think you'll see the timeline from idea to delivery speed up.”
Additionally, Walmart is looking to make investments in U.S. manufacturing, and the retailer recently committed $35 billion over the next several years toward U.S. manufacturing. The investments will ensure the company can bring the inventory and deployment of goods closer to the consumer. Overall, making the supply chain more dynamic, with a focus on bringing more operations closer to home, will improve the current strains, Furner said.
One of the biggest challenges of the pandemic was balancing the short term and long term, Furner said. While the immediate challenges of the pandemic presented a need for an array of short-term solutions, Walmart also had to continue thinking about putting in time and resources for the future. That includes predicting how consumers will shop in the future.
“You are what you build, but [we also] think about, ‘How do you grow on top of our system of values and culture?’” Furner said. “[Our mission is] an everyday low price and that will never change, but we have to keep building and growing for what's coming in the future.”