Walmart’s Outlook on Current and Post-Pandemic Retail
How has Walmart coped with changes in demand during the pandemic?
Janey Whiteside, Walmart’s executive vice president and first chief customer officer, met with Deloitte’s chief global economist Ira Kalish at NRF 2021 to discuss meeting today’s shopper where they’re at and how 2021 is likely to unfold at retail stores across the nation.
“I think it’s fair to say we have never seen a year like we just saw and it seems, at least for the foreseeable future, we’re going to see,” Whiteside said.
All retailers had to manage a demand for goods during the onset of COVID-19 as the demand curves changed. However, the decades of work Walmart has done to build its supply chain served it well.
Walmart saw “five years’ worth of digital accelerations, in terms of pickup and delivery, in five weeks” she said. This was alongside both a broadening of segments and new segments, such as aged 65-plus online shoppers which really leaned into the new way of shopping. Walmart was able to quickly pivot to be able to offer services people needed, like express delivery in two hours.
Now, as we enter 2021, the pandemic continues to be hard on so many consumers.
Kalish mentioned a k-shaped recovery, meaning lower income households are more stressed, but upper income households are ok and doing things like home improvement and buying houses. However, Walmart’s core customer is not immune to the economic slowdown. In November, 40% of Walmart customers told the retailer they don’t expect any sort of speedy economic recovery.
“We know they are continuing to look for ways to save money on basic items,” Whiteside said.
The customer is switching to private label, smaller packs sizes, and cherry-picking deals. However, she noted that saving time, lifting that cognitive load, can also help customers.
“Ways that we can lift the load by making it easier to do the things you just have to do, and do them safely, is really important, whether that’s pickup or delivery or contactless ways of getting stuff.”
Kalish asked, with the increase of digital shopping, what must one do to become the go-to online platform, but keep the relevance of stores?
Walmart’s advantage is proximity to consumers; it’s able to service you no matter how you want to shop. This allows it to use its stores in new and different ways. If something wasn’t in stock in a distribution center, it was able to pull inventory from a store and redirect the order to get it fulfilled to the customer.
“Being able to manage our inventory no matter where it is, is really an advantage for us,” Whiteside said.
This is a boon for Walmart, since Whiteside said stores aren’t going anywhere. People are still craving the experience of a store. Walmart is thinking about, what’s the next irritation of the in-store experience? “How can we use our stores to become the go-to retailer around the stickiness of this new behavior around pickup and delivery?”
Boosting the personalized experience is one approach. Whiteside noted everyone is a data company these days. But when it comes to using data, she posed the question, “how do we marry all of the data we have to get to know the customer better and better?” What’s fascinating about Walmart’s data is the breadth of data it has. With the right permissions, for example, if Walmart knew a customer was gluten-free it could make personalized recommendations.
However, she cautioned, “no matter how great you are at mining and using data, it means nothing if you can’t do it in a way that consumers are comfortable with and that they trust you with.”
Do the right things with customers, with the data, for better solutions, recommendations and personalized services, she recomends.
Looking ahead to the future, Whiteside talked about in-home delivery, such as refrigerator delivery. She said when she talks to people about in-home service you get two reactions, either “I’d love that,” or “no way.”
It comes to trust. Do you trust the retailer to come into your home? “It’s really interesting how quickly you can build that trust,” she noted. Ten years ago you wouldn’t trust a stranger to pick your groceries or pick you up in a car. But we’ve seen the rise of Uber, and the rise of pickup and delivery. In-home delivery is the next irritation.
“If you can establish that level of trust, the upside of time, effort, cognitive load, focus…” coming home from work and the groceries are in the fridge, it’s so appealing…”once you try it once, and it works, we’re seeing people get hooked on the service.”
Auto replenishment is coming next, she said. Imagine never having to think about milk, because it’s always going to be in the fridge.
In the more immediate future, as we all return to “normal,” what does the new normal look like? Not everything about normal was so great. So how do retailers leverage physical and digital to create really great experiences? How do we give the customer more choice?
“Having the ability to learn with our customers, understand where they want to go, is really important,” she said. Walmart has exciting things in the hopper, but she said the retailer needs to listen and be sure that these are the things the customer wants.