walmart digital transformation case study

Digital Transformation at Walmart: A case study.

Walmart (NYSE: WMT), the largest physical retailer based in the United States, has achieved enormous growth over the years through its EDLP pricing strategy and a customer-friendly brand image. In recent years, the company has focused on digitalization to grow sales and improve customer service. Its e-commerce sales have continued to strengthen worldwide.

Physical retailers in the US are turning to digitalization to serve their customers better, whose lifestyles are now heavily influenced by digital technology. Walmart acquired the Indian online retail brand Flipkart in 2018. Since then, it has also made a significant investment in its US e-commerce infrastructure.

While investing in technology is essential for retailers to serve their customers more efficiently, Amazon’s growing influence in the retail industry has also proved to be a key driver of digitalization across the US-based retail brands. The need to focus on digital technology was never more highlighted than during the pandemic. Customer behavior changed profoundly with the spread of the Covid-19 pandemic . Customers mostly switched to online shopping during lockdowns. These changes will last longer since the impact on people’s lifestyle has been profound. 

Walmart has been investing in e-commerce over the past several years and is reaping its benefits now. However, Walmart’s focus is not just on e-commerce but on a complete digital transformation that drives superior associate performance while driving higher customer satisfaction also apart from stronger financial returns. Cloud technology is driving similar transformations across other retailers too. Walmart is leveraging cloud technology to strengthen its competitive position and accelerate its growth momentum.

Back in 2018, Walmart partnered with Microsoft to accelerate its cloud journey and more expeditiously deliver on changing customer expectations. Walmart’s digital transformation has also come in the face of growing competitive pressure from the e-commerce giant Amazon. From its online store to supply chain and logistics, digital technology, AI, IoT, and Machine Learning are driving rapid changes. Walmart’s continuous growth in the future depends on its ability to leverage technology to swiftly respond to the changing market scenario and customers’ purchasing habits.

Table of Contents

Factors that drove rapid digitalization at Walmart.

Walmart is the largest physical retailer in the United States. The company has been enjoying enormous growth over the last several years. However, the retail landscape in the United States is changing swiftly.  Five main factors drove digitalization at Walmart: 

• Demographic changes in the US population.
• Changing consumer habits and expectations.
• Rise of mobile computing.
• Need for more speed and efficiency.
• Growing challenge from Amazon

Demographic changes and other changes like the rise of e-commerce has also changed how people shopped. Since the retail landscape is changing, Walmart’s traditional operating model was insufficient to serve the customers’ evolving needs in the US. Millennials are now the largest segment of the US adult population (Pew Research, 2020). 

They are also the most important customer segment for retail brands like Walmart. The expectations of the millennial generation are very different from the  Baby Boomers. The millennials are tech savvier and live highly digital lives. They like to shop online for a large range of products and services. Apart from their general needs, these people also depend on online channels for their daily entertainment and various other needs like music and fashion.

The rise of social media and the millennials’ consumption habits all required the businesses that wanted to serve them to adopt a better model driven by technology. Walmart’s competitive moat lay in its pricing strategy mainly apart from the large array of products it sells. However, these things are no longer sufficient to cater to the millennial generation’s expectations fully. Walmart needed to transition to a better model that could handle things with higher speed and efficiency.

 Both these things are important for maximizing customer satisfaction in an era driven by computers, the internet, data and analytics. The dependence of retail brands on technology was also destined to grow because of the growing use of mobile computing. The need for higher mobility also drove higher investment into technology. Digital technology has altered the buying habits of the customers, who like to compare prices on their smartphones before they go for the final purchase.

Lower prices attract the millennials but there are more factors they consider before making a purchase. Customer convenience matters more than ever to win in a highly competitive retail landscape. It affects demand and sales. However, to grow the level of customer convenience requires a focus on digital technology which saves time and also helps reduce costs.

Another important factor that drove Walmart towards rapid digitalization was the rise of the e-commerce giant Amazon. Prior to that, Walmart was the undisputed leader in the US retail sector. Amazon is right next to Walmart on the Fortune 500 list, where the physical retail giant has managed to remain at the top for several years. In 2020, Walmart is on the top of the list for the eighth time (Fortune, 2020).

In terms of e-commerce sales in the US, Walmart is just next to Amazon (despite the substantial gap). There is still a substantial difference in the market shares of the two in the e-commerce industry but Walmart is trying to strengthen its position through continuous investment in digital technology. Amazon poses a major challenge before the other  US-based retailers whose continuous growth now depends on how well they can serve their tech-savvy consumers.

The drive towards a highly digital future has accelerated with the pandemic. People’s buying habits are being reshaped, and consumers will likely depend more on online shopping in the future. Walmart needed to take Amazon’s challenge since, over time, Walmart’s influence could substantially reduce due to the growth in Amazon’s, which is aggressively demanding lower prices from its sellers using its clout in e-commerce. Leveraging its existing competitive strengths for superior results was only possible if Walmart invested in digitalization.

Supply chain digitalization at Walmart

Walmart has focused on higher digitalization in nearly all areas of its business system. From the supply chain to sales, customer service, marketing, and store operations, the company has steadily been investing in digitalization to grow its operational efficiency and cost-efficiency. Walmart’s supply chain digitalization was an important pillar of its omnichannel strategy.

Digitalizing the supply chain was the first important step towards making its omnichannel strategy a success. To really gain from its investment in technology and digitalization, Walmart first needed to leverage the strength of its supply chain. A highly optimized supply chain is a critical source of competitive advantage for the retail brand. It has helped Walmart maintain consistently lower prices and could be further optimized using digital tools to gain higher cost-efficiency and derive better employee performance. 

Moreover, the traditional supply chain management model was insufficient to serve the evolving needs of US customers. Digitalizing the supply chain has enabled the retail giant to pursue its omnichannel strategy with a higher success rate. Walmart is leveraging digital technology to share information across the supply chain, and for tracking and managing inventory across its stores and warehouses in the United States.

An efficient and modernized supply chain has played a critical role in helping the company gain higher cost-efficiency. Walmart’s competitive position as the leading physical retailer in the US has strengthened with growing digitalization across its supply chain, which also helped it access a large pool of data. It gains valuable insights from the data to understand consumer behavior. Walmart’s large supply chain produces tons of data daily used to make important inventory management decisions. It also helped the company grow its supply chain resilience to serve customer needs better during a crisis like a hurricane or in the event of a pandemic like Coronavirus.

Walmart also secured its supply chain against fast-changing market conditions by leveraging data and analytics. In 2017, it invested in Data Cafe, one of the largest private clouds in the world to grow its data and analytics capabilities and process more than 40 Petabytes of data being generated from internal and external sources daily (Marr, 2017). Walmart’s data cafe is its analytics hub located at its headquarters in Bentonville, Arkansas. Data Cafe allows Walmart to model, manipulate, and visualize recent transactional data, it collects from more than 200 internal and external streams.

It enabled faster decision making at Walmart and provided solutions to several critical supply chain management related problems that could otherwise take a lot longer to answer. Walmart made Data Cafe available to its suppliers so they could gain free insights into customer demand and manage their supply and inventory better. 

In 2018, Walmart introduced its Connected Content Provider Program, whose main focus was to help suppliers scale content to Walmart’s catalog and other retailers (Ogura, 2018). The program aimed to bring harmony between retailers, suppliers, and content. With its syndication partners like Salsify, the company aimed to help its suppliers deliver content with higher speed and agility. Suppose a customer comes to Walmart looking for a particular product that is not available at the time. Walmart looks up its syndication providers like ‘Salsify’ to find which supplier has the product and then arranges for home delivery. 

Walmart is also using other latest technologies like AI and Blockchain to track inventory down its supply chain (Aitken, 2017). The retail brand partnered with IBM to leverage blockchain technology and leverage and track food products’ movement across its supply chain to ensure their quality and authenticity. The use of IBM blockchain allowed Walmart to track the movement of goods in its supply chain faster. Something that could take days or weeks to trace using the traditional tracking methods was now possible in seconds. Blockchain -based decentralized ledgers have simplified the process of tracking goods in Walmart’s supply chain.

Digital Transformation through Cloud Technology

Cloud technology is also driving rapid transformation across the retail landscape. Retailers turn to cloud technologies to grow their efficiency and transform a large pool of data they generate daily into actionable insights. 

In 2018, when Walmart was already using a large set of Microsoft services for critical workloads, the company announced a strategic five-year partnership with the cloud leader to make its digital transformation possible. This partnership with Microsoft allowed Walmart to leverage machine learning, artificial intelligence, and data platform solutions for a wide range of external customer-facing services and internal business applications (Walmart, 2018).

Walmart aimed to transform digitally, bring innovations that saved its customers time and money, and change how work was carried out inside the organization for increased productivity. To achieve its target, the company selected a full range of Microsoft cloud solutions that included Microsoft Azure and Microsoft 365. The main advantages of using cloud technology for Walmart were going to be as follows:

• Leverage the capacity of Microsoft’s enormous compute capacity.
• Ability to manage workloads seamlessly in an elastic environment.
• Bring innovations faster through the new toolsets
• Drive costs lower through a cloud native environment.

From reducing energy consumption in the Walmart stores to managing logistics, the company uses cloud technology to make its work processes more efficient and save time and money. The company uses machine learning to route thousands of trucks in its supply chain. Apart from that, Walmart gained access to various tools that allow its associates to improve their productivity and collaborate on projects. Tools like Microsoft workplace analytics, Microsoft Stream, and Microsoft One Drive allow associates to collaborate, save time, and work better.

Walmart owned Jet.com also uses cloud technologies heavily to serve customers efficiently. It has built an innovative eCommerce engine on the Azure cloud platform in less than 12 months. The Jet.com platform is composed of open-source software, Visual F#, and Azure Platform as a service (PaaS) like Azure Cosmos DB. The next-generation architecture of Jet.com is built for speed. It uses Panther, Azure’s next-generation inventory processing system to make its service faster, smarter, and more efficient. 

“Within just a few weeks, a prototype based on Service Fabric proved that Panther could support the massive scale and the functionality Jet needed plus high availability and blazing fast performance across multiple regions. But what really made Panther possible was adding Azure Cosmos DB for the event store. Coupling an event-sourcing pattern with a microservices-based architecture gave them the flexibility they needed to keep improving Jet.com and delight their customers.” (Microsoft, 2020)

Sources Used:

Pew Research. (2020, April 28). Millennials overtake Baby Boomers as America’s largest generation . PewResearch. Retrieved 2020, from https://www.pewresearch.org/fact-tank/2020/04/28/millennials-overtake-baby-boomers-as-americas-largest-generation/

Fortune. (2020). Fortune 500 . Fortune. Retrieved 2020, from https://fortune.com/fortune500/2020/search/

Marr, B. (2017). Really Big Data At Walmart: Real-Time Insights From Their 40+ Petabyte Data Cloud . Forbes. Retrieved 2020, from https://www.forbes.com/sites/bernardmarr/2017/01/23/really-big-data-at-walmart-real-time-insights-from-their-40-petabyte-data-cloud/?sh=1c6727f26c10

Ogura, F. (2018, September). Introducing the Connected Content Partner Program . LinkedIn. Retrieved 2020, from https://www.linkedin.com/pulse/introducing-connected-content-partner-program-frank-ogura/

Salsify. (2018). Salsify Selected By Walmart To Join Its Connected Content Partner Program . Salsify. Retrieved 2020, from

Aitken, R. (2017). IBM Forges Blockchain Collaboration With Nestlé & Walmart In Global Food Safety . Forbes. Retrieved 2020, from https://www.forbes.com/sites/rogeraitken/2017/08/22/ibm-forges-blockchain-collaboration-with-nestle-walmart-for-global-food-safety/?sh=66710fac3d36

Microsoft. (2020, June). Jet.com powers innovative e-commerce engine on Azure in less than 12 months . Microsoft Azure. Retrieved 2020, from https://customers.microsoft.com/en-in/story/822088-jet-com-powers-innovative-e-commerce-engine-on-azure-in-less-than-12-months

Walmart. (2018, July). Walmart establishes strategic partnership with Microsoft to further accelerate digital innovation in retail . Walmart Newsroom. Retrieved 2020, from https://corporate.walmart.com/newsroom/2018/07/17/walmart-establishes-strategic-partnership-with-microsoft-to-further-accelerate-digital-innovation-in-retail

Digital Transformation: A Walmart Case Study on Retail Innovation

Walmart, founded in 1962 by Sam Walton, is one of the world’s largest retailers, operating a vast network of stores and an extensive supply chain. Recognizing the need to adapt to the changing retail landscape, Walmart embarked on a comprehensive digital transformation path to enhance its operations, customer experience, and market position.

Walmart’s journey toward digitalization is a compelling case study of how a retail giant adapts to the digital age to stay competitive. The foundation for this transformation was largely laid during the tenure of CEO Mike Duke, back in 2009 . Mike Duke’s vision was to transform an enterprise based strongly on supply chain and operational excellence to one that is fast becoming ‘entrepreneurial,’ ‘experimental,’ and ‘flexible.’

During this time, he addressed to his shareholders that, “With our stores and low prices, we can really take advantage of mobile technology to ensure transparency. We can combine our stores, our systems and our logistics expertise into one continuous channel to drive growth and serve the Next Generation Customers around the world. So let me be very clear — in global e-commerce, we will not just be competing; we will play to win .”

So, how did Walmart really play to win? The answer lies in Walmart’s aggressive foray into digitalization.

Walmart Global eCommerce: The cornerstone of Walmart’s digital transformation

In 2010, Walmart consolidated its eCommerce activities around the world in a Global eCommerce Division. This division had three goals: 1) Develop and execute a global eCommerce strategy; 2) Accelerate global online channel growth; and 3) Create technology platforms and applications for every Walmart market.

Based in San Bruno in Silicon Valley, Walmart Global eCommerce set the stage for an organization-wide effort to build a digital footprint and integrate it with the physical shopping experience. Making swift progress on its goals, the division revamped Walmart.com’s search engine in its first year, improving online visitors’ conversion to buyers by 10 to 15 percent. In the next few years, Walmart scaled up Global e-commerce to more than 3600 associates worldwide, with more than 2200 of them in Silicon Valley. A thousand Silicon Valley associates were hired in 2014 alone. The division also made 14 acquisitions in the last three years.

Fostering digital innovation with WalmartLabs

Walmart’s Global eCommerce division has a key constituent – WalmartLabs, which has played a crucial role in furthering digital innovation. WalmartLabs was designed to be an idea incubator, with a mission ‘to build products that seamlessly integrate the online and in-store shopping experiences for millions of customers’.

The lab initially focused on modernizing Walmart’s website, working on solutions like a next-generation search engine and mobile applications that can deliver personalized experiences. It eventually expanded its scope to developing technological innovations for other business areas, such as the supply chain, cloud computing, and data analytics.

Delivering service with intuitive mobile apps

Walmart’s e-commerce resurgence was in part propelled by the growing success of their mobile app. In 2012, Walmart added geo-fencing to its app, a feature that senses when a customer enters a Walmart store and, from there, allows him/her to browse the store’s local ads, offers, and item locations. The app allows customers to scan product bar codes and QR codes to access product information, ratings, reviews, and additional content. Walmart further updated the app in 2014 to help customers pinpoint the exact aisle location of a product in its stores. The app also allows customers to create shopping lists by speaking into their phones, use digital coupons, and even calculate the total price of the items in the cart in real time basis.

To further strengthen its core promise of offering competitive prices, Walmart launched another app feature called ‘Savings Catcher’ – a feature that scans customer receipts and compares Walmart prices to those of their competitors. If the competitor’s price was lower than Walmart’s, customers would get a gift card for the difference. They also rolled out ‘Walmart Pay’, a mobile wallet integrated with the app that allows customers to pay for in-store purchases using their smartphone.

By 2019, the Walmart app became the  number one shopping app in the U.S. on Black Friday , toppling Amazon from the top spot for the first time ever. While Amazon has since regained its lead, these strategies demonstrated Walmart’s ability to remain competitive in the mobile shopping space.

Growth during the pandemic

While the mobile app had an important role in drawing in more customers, another crucial strategy that helped fuel their e-commerce growth during the pandemic was the ‘Buy Online, Pick up in Store (BOPIS) service. Back in 2013, Walmart piloted this service, which expanded into 1,000 locations  after four years. By the time COVID hit, the BOPIS became a leading sales driver in retail. As a result, the company had already set their foot well ahead of the pack and by 2021, Walmart had cornered the largest share of total BOPIS orders among all retailers. 

Another service that Walmart launched during the pandemic was  Walmart+ , a membership program designed to compete with Amazon Prime. It offers early access to promotions and events, free delivery from your store, free shipping, and much more. To upgrade the convenience of their deliveries, the company then introduced  InHome, a next-level service where highly vetted Walmart associates can go into a customer’s house and place the products in their fridge, cupboards, or garage. To ensure security, the associate is only given one-time access to the home and wears a body cam that records every minute of the delivery.

Making use of data to offer a personalized shopping experience

Walmart leverages its immense trove of data to gain insights into consumer behavior, market trends, and operational efficiencies. By analyzing vast amounts of customer records, including purchase history, demographics, and online browsing patterns, Walmart can tailor its product offerings, pricing strategies, and promotional campaigns to better resonate with its target audience. Through predictive analytics and machine learning algorithms, Walmart can anticipate consumer demand, optimize inventory levels, and identify opportunities for cross-selling and upselling, thereby driving incremental sales and revenue growth.

An example of Walmart’s use of Big Data and social media is ‘Shopycat’.  The “social gift finder” app provides gift suggestions for people’s friends based on data extracted from their Facebook profiles. Shopycat also surfaces friends for whom to buy gifts, based on how much people interact with them. Users can also get notifications of their birthdays. When people hover over a gift that has been suggested for a friend, the app shows why it is suggested. For example, it can show that a person “Liked” it on Facebook or made a comment about it on a wall post or status update. 

Another example of Walmart’s intelligent use of data is its ‘Polaris’ search engine, which powers its website and mobile apps. ‘Polaris’ uses semantic search technology that understands the contextual meaning of a shopper’s search and generates more meaningful results. For instance, when a customer who regularly searches for movies tweets that they “I love Salt”, the search engine recognizes that the customer is referring to the Hollywood movie ‘Salt’ and not condiment salt. The use of Polaris helped Walmart improve conversions drastically.

Throughout its digital journey, Walmart stayed true to the ‘everyday low prices’ strategy that made it a retail titan. Shoppers enter the Walmart store knowing that they will find an expansive selection of products at the lowest prices. It’s a simple brand promise, and it works. This commitment to offering low prices allows Walmart to fare better, particularly during times of high inflation and economic downturns.

Acquisitions and partnerships

Walmart acquired several tech startups and e-commerce companies to fortify its digital strategies and online retail capabilities. One of its biggest acquisitions was Jet.com , a fast-growing e-commerce business that was then gaining over 400,000 new shoppers every month. Walmart leveraged Jet.com’s digital expertise and resources to help fuel its own growth in online retail. 

They even partnered with Microsoft  to use the tech company’s cloud, Internet of Things, machine learning, and artificial intelligence solutions to improve the shopping experience. To further streamline business operations and cut costs, they outsourced their finance and accounting functions to an external firm.

By leveraging the expertise of other organizations, whether through acquisition or partnership, Walmart was able to boost its capacity, make faster progress, and focus on critical areas of its digital transformation. 

Factors that drove digitalization at Walmart

The company has been enjoying enormous growth over the last several years. However, the main factors that drove the company towards digitalization are the demographic changes in the US population, changing consumer habits and expectations, the rise of mobile computing, the need for more speed and efficiency, and the growing challenge from Amazon.

While Amazon remains a formidable leader in online retail, Walmart continues to enhance its digital capabilities and make a path in the e-commerce market. It’s currently the second-largest online retailer in the U.S. by market share. Walmart’s revenue for the quarter ending April 30, 2024 , was $161.508B, a 6.05% increase year over year.

Walmart learned a painful lesson in the early days when it didn’t invest enough in online retail. But its massive infrastructure, intense focus on innovation, and willingness to embrace new ideas made them a strong contender in the e-commerce space.

What CTOs can learn from Walmart’s successful implementation of digitalization

A few lessons that can be learned from Walmart’s successful journey are:

Emphasize strong leadership  

Strong leadership is crucial to the success of any business. Walmart’s strong leadership team was instrumental in driving the company towards digitalization, ensuring that everyone was aligned with the company’s strategic goals.

Engage/communicate with the employees

Engaging and communication is essential to building a resilient and adaptable workforce. Walmart engaged and encouraged workers to learn and try something new, which helped foster a culture of innovation and adaptability.

Promote adaptability

Walmart was able to stay ahead of the curve because of its adaptable nature. It quickly changed its operations to meet the changing customer needs and preferences. In all, it built a culture that nurtures flexibility and agility.

Always focus on customer experience

No matter how far the company when, Walmart always prioritized customer experience. They made a concerted effort to tailor its offerings to individual customers and invested in initiatives like online grocery pickup and delivery to make shopping more convenient and efficient. All of this helped in building loyalty and driving sales.

Digital transformation is an inevitable megatrend that has to be embraced for an organization’s success. However, this process can cause a fatal failure if not deployed correctly. The case of Walmart provides an example of good timing and strategic planning.

Walmart’s digital transformation has strengthened its position as a leading global retailer, enabling it to compete with e-commerce giants and adapt to changing consumer preferences. Its digital journey is a testament to how future leaders and CTOs can boost organizational success.

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Walmart To Offer Technologies and Capabilities To Help Other Businesses Navigate Their Own Digital Transformation

The retailer also announced a commercialization partnership with adobe, giving thousands of businesses access to the same technologies and services that power the fortune 1 company..

July 28, 2021

BENTONVILLE, Ark., July 28, 2021 — Today Walmart announced it will begin offering several of its own technologies and capabilities to other businesses and brands seeking to better serve customers as they increasingly shop across digital and physical storefronts. As part of this effort, Walmart also announced a strategic partnership with Adobe to integrate Walmart’s Marketplace, online and in-store fulfillment and pickup technologies with Adobe Commerce, a leading commerce solution for merchants and brands.

During the last several years, Walmart has built a world class organization that has developed its own technologies and services to meet the rapidly evolving needs of customers at scale. These unique capabilities enable Walmart to better serve customers, create differentiated experiences and grow its business as digital shopping continues to increase.

“We’ve built new capabilities to serve the evolving needs of our own customers, and we have a unique opportunity to use our experience to help other businesses do the same,” said John Furner, chief executive officer of Walmart U.S. “Commercializing our technologies and capabilities helps us sustainably reinvest back into our customer value proposition.”

Through the Adobe Commerce platform, retail businesses will be able to use Walmart’s unique cloud-based services to offer seamless pickup and delivery to their customers. Businesses will be able to reach new customers on Walmart’s fast-growing Marketplace where they can leverage Walmart’s Fulfillment Services to offer 2-day shipping nationwide. The partnership with Adobe to offer these capabilities will help businesses of all sizes improve their customer experience while operating more efficiently.

“The core mission of helping people save money and live better is at the heart of every idea including Scan & Go and checkout technologies, AI-powered smart substitutions and pickup and delivery,” said Suresh Kumar, chief technology officer and chief development officer of Walmart Inc. “Combining Adobe’s strength in powering commerce experiences with our unmatched omni-customer expertise, we can accelerate other companies’ digital transformations.”

“We’re excited to collaborate with Walmart to help Adobe merchants expand their businesses to new channels and offer shopping experiences that increase their competitiveness and fit well with shifting consumer behaviors in an increasingly digital economy,” said Anil Chakravarthy, executive vice president and general manager, Digital Experience Business and Worldwide Field Operations at Adobe.

Walmart has continued to leverage technology, such as machine learning, cloud powered checkout and pickup capabilities to offer more convenience and enhance the overall shopping experience for customers. To learn more about Walmart’s recent innovations, visit corporate.walmart.com .

To learn more about Walmart’s capabilities now offered on the Adobe Commerce platform, visit here .

About Walmart Walmart Inc. (NYSE: WMT) helps people around the world save money and live better - anytime and anywhere - in retail stores, online, and through their mobile devices. Each week, approximately 220 million customers and members visit approximately 10,500 stores and clubs under 48 banners in 24 countries and eCommerce websites. With fiscal year 2021 revenue of $559 billion, Walmart employs 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting corporate.walmart.com , on Facebook at facebook.com/walmart and on Twitter at twitter.com/walmart .

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“We Need People to Lean into the Future”

• Adi Ignatius

For years, Walmart’s unrivaled customer research capabilities helped it dominate retailing. Then along came the internet, and Walmart suddenly found itself playing catchup to e-commerce pioneers like Amazon. In 2014 the board appointed Doug McMillon as CEO and gave him an imperative: Bring Walmart into the future—without sacrificing its longtime strengths.

McMillon, who began his career unloading trucks at a neighborhood Walmart, respects tradition but is impatient for change. In this interview with HBR editor in chief Adi Ignatius, he describes the ups and downs of transforming America’s largest company. Going digital is a top priority—which is why Walmart recently paid $3 billion to acquire e-tailer Jet.com. But the company also wants to strengthen the in-store experience. “The reality,” notes McMillon, “is that customers want everything”—low prices, convenience, and seamless interactions online and in person. In this new world, all employees, including those on the sales floor, will need to be tech savvy. And the management team can no longer make strategic decisions on an annual or even quarterly basis; “strategy is happening on a much faster cycle time,” says the CEO.

A conversation with Walmart CEO Doug McMillon

For years, Walmart seemed to understand exactly what its customers wanted. It developed complicated consumer analytics and used that data, along with relentless pressure on suppliers, to become a retail powerhouse that sold practically everything at the lowest possible prices.

• Adi Ignatius is the editor in chief of Harvard Business Review.

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Taking on Amazon: How Walmart Embraced Digital Transformation to Keep the E-Commerce Race Alive

Walmart has maintained their number 1 spot on the Fortune 500 list for the past 11 years, an impressive feat for a 61-year-old brick-and-mortar store in the digital era. 

How did this legacy brand, still the world’s largest retailer by revenue, sustain their dominance in the retail space while  other traditional companies  have fallen by the wayside?

This article will talk about the key factors that helped Walmart stay relevant in the age of e-commerce and what other businesses can learn from their  digital transformation .

SHAKY START AND SHORT-LIVED SUCCESS

In 1996, when Walmart was already the fourth largest company in the U.S., the retailer made their first foray into e-commerce by launching online stores for both Walmart and Sam’s Club, their members-only retail warehouse division.

This initial attempt was more of a test rather than a long-term investment in building an online presence. Then Walmart CEO David Glass  wasn’t a big believer ; he predicted that the company’s online store would never even exceed the sales of the biggest Sam’s Club warehouse. After all, Walmart was already making $100 billion in brick-and-mortar sales while their future competitor, Amazon, was just a struggling online bookseller with a revenue of $148 million.

These early e-commerce efforts hit a speed bump when Amazon started poaching Walmart’s executives, including the software engineer who took the lead in building their website. After a two-year hiatus, Walmart.com was finally relaunched in 2000 and enjoyed considerable success, hitting $1 billion in sales after five years. By early 2005, Walmart.com had over  440 million monthly visits , making it the eighth most popular website in the world at the time, only two spots below Amazon.

However, Walmart failed to capitalize on this growth. The company’s investments in their e-commerce operations paled in comparison to that of Amazon's, which poured billions into building their infrastructure.

Walmart’s e-commerce site remained basic and clunky, their  search engine returned poor results  (a search for “cotton socks” would yield cotton candy and yarn), and they didn’t connect seamlessly with the stores or the supply chain.

In 2008, Amazon had secured its place as the number one online retailer, with  $19.17 billion in sales , while Walmart ranked 13th, generating only $1.74 billion in sales.

NEW ERA OF DIGITAL INNOVATION, ACQUISITIONS, AND PARTNERSHIPS

To revive their presence in online retail, Walmart established a global e-commerce division in 2010 and formed  Walmart Labs , an idea incubator tasked with developing innovative digital products. 

The lab was initially focused on modernizing Walmart’s website, working on solutions like a next-generation search engine and mobile applications that can deliver  personalized experiences . They eventually expanded their scope to include developing technological innovations for other areas of the business such as the supply chain, cloud computing, and data analytics.

Walmart also acquired several tech startups and e-commerce companies to fortify their digital strategies and online retail capabilities. One of their biggest acquisitions was Jet.com, a fast-growing e-commerce business that was then gaining over  400,000 new shoppers every month . 

Walmart leveraged the company’s digital expertise and resources to help fuel their own growth in online retail. Jet.com’s founder, Marc Lore, became the CEO of Walmart’s e-commerce business in the U.S. and oversaw the rapid growth of their online sales,  jumping 176% in three years . 

However, the company eventually had to shutter Jet.com’s operations and sell other e-commerce acquisitions that turned out to be unprofitable, such as online apparel companies Bonobos and Modcloth.

Aside from acquiring other businesses, Walmart also engaged with key partners and service providers to accelerate their digital transformation. They  partnered with Microsoft  to make use of the tech company’s cloud, Internet of Things, machine learning, and artificial intelligence solutions to drive improvements in the shopping experience. To further streamline business operations and cut costs, they outsourced their finance and accounting functions to an external firm.

By leveraging the expertise of other organizations, whether through acquisition or partnership, Walmart was able to boost their capacity, make progress faster, and focus on critical areas of their digital transformation. 

STRONG WINS THROUGH MOBILE SHOPPING

Walmart’s e-commerce resurgence was in part propelled by the growing success of their mobile app. Their early experimentation with  mobile applications , which produced nifty tools like voice-enabled shopping list creation, finally paid off.

In 2014, the Walmart app  soared from 4 million users to 14 million  in one month following the launch of Savings Catcher—a feature that scans customer receipts and compares Walmart prices to those of their competitors. If the competitor’s price was lower than Walmart’s, customers would get a gift card for the difference. They also rolled out Walmart Pay, a mobile wallet integrated with the app that allows customers to pay for in-store purchases using their smartphone.

Walmart continued to build on this progress by leveraging the app to enhance the in-store experience. They introduced features like an updated map that makes it easier to navigate Walmart’s stores and “Check Out With Me”, a tool that lets shoppers skip the lines and complete their purchase instead with store personnel in the aisles. 

By 2019, the Walmart app became the  number one shopping app in the U.S. on Black Friday , toppling Amazon from the top spot for the first time ever. While Amazon has since regained its lead, this demonstrated Walmart’s ability to remain competitive in the mobile shopping space.

For all its features, however, one key function that the app couldn’t do was offer groceries. Walmart had another standalone app for that called Walmart Grocery. 

At the height of the COVID-19 pandemic, the grocery app hit an  all-time high in downloads  as demand for online grocery shopping ramped up. It was at this time that Walmart completed the integration of the grocery app into their flagship mobile app, which meant customers could finally access all Walmart products using just one app.

GROWTH AMID A GLOBAL PANDEMIC

While the mobile app had an important role in drawing in more customers, another crucial strategy helped fuel their e-commerce growth during the pandemic.

Back in 2013, Walmart piloted their buy online, pick up in store (BOPIS) service, which  expanded into 1,000 locations  after four years. 

By the time COVID hit and BOPIS became a leading sales driver in retail, the company was already well ahead of the pack. They were able to leverage their size and physical footprint; about 90% of the U.S. population already live within 10 miles of a Walmart store, so they became the most convenient option for BOPIS. By 2021, Walmart had cornered the largest share of total BOPIS orders among all retailers. 

Another service that Walmart launched during the pandemic was  Walmart+ , a membership program designed to compete with Amazon Prime. It’s $40 cheaper per year than Prime and offers unlimited same-day delivery for tech products and groceries (free delivery at $35 minimum purchase vs. $150 minimum for Amazon Fresh).

To upgrade the convenience of their deliveries, the company introduced  InHome , a next-level service where highly vetted Walmart associates can go into a customer’s house and place the products in their fridge, cupboards, or garage. To ensure security, the associate is only given one-time access to the home and wears a body cam that records every minute of the delivery.

Walmart’s massive network of 4,700 stores and 31 dedicated e-commerce fulfillment centers made fast shipping and delivery possible, but the company didn’t stop there. They started building four  next-generation fulfillment centers  equipped with robotics and machine learning capabilities, which will enable the retailer to provide next-day and two-day shipping to 95% of Americans and same-day delivery to 80% of them.

The company is also ramping up their last-mile delivery capabilities, and their drone delivery program is one key area where they are winning over Amazon. By using drones, deliveries can be done in 30 minutes or less after ordering. Walmart has made over  6,000 deliveries by drone  across seven states in 2022, while Amazon has only completed its 100th drone delivery as of May 2023. 

LASER-FOCUSED ON LOWER PRICES

Throughout their many ventures into digital, Walmart stayed true to the “everyday low prices” strategy that made them a retail titan. 

Shoppers don’t expect Walmart to have cutting-edge technology or deliver a luxurious customer experience. They go into a store knowing that they will find an expansive selection of products at the lowest prices. It’s a simple brand promise and it works.

To consistently deliver on this brand promise, Walmart leveraged digital (aside from, of course, using their massive buying power to negotiate better pricing with suppliers). The company poured investments into making their supply chain highly efficient, automating distribution centers to lower operating costs, and utilizing big data to accurately forecast demand patterns.

One study  tracked products sold by both Amazon and Walmart, and they found that Amazon’s average price was $14.46 while Walmart’s was $8.50. This commitment to offering low prices allows Walmart to fare better particularly during times of high inflation and economic downturns.

WALMART TODAY

While Amazon remains a formidable leader in online retail, Walmart continues to enhance their digital capabilities and make inroads in the e-commerce market. They’re currently the second largest online retailer in the U.S. by market share.

In FY 2023, the company’s online sales across all business segments—U.S., International, and Sam’s Club— grew by double digits . Global e-commerce sales amounted to $82 billion, accounting for 13% of total revenues.

Walmart learned a painful lesson in the early days when they didn’t invest enough in online retail. But their massive infrastructure, intense focus on innovation, and willingness to embrace new ideas make them a strong contender in the e-commerce space.

HOW CAN OTHER COMPANIES ADAPT AND THRIVE LIKE WALMART?

Most businesses do not have the extensive resources, economic power, and market influence of Walmart, but with a sound strategy, they can still transform and become a dominant force in the digital era.

At our company, FROM: The Digital Transformation Agency, we work with dozens of large companies like Avis, NBCUniversal, Airbus, and JPMorgan Chase to help them leverage digital in order to remain competitive in their industry.

Here are four strategies to effectively push against irrelevance in the digital age:

FOCUS ON YOUR CUSTOMERS’ NEEDS AND EXPECTATIONS

A key pillar in Walmart’s success is their single minded-focus on keeping prices low and inventory high because they know that this is what customers need and expect from them. 

On the pricing end, Walmart made sure to invest in their supply chain and data analytics so they can make operations more efficient in the long term, keep costs low, and pass on the savings to their customers.

In terms of inventory, however, one of the challenges of offering a large selection of products is how to make it easier for customers to find what they want, both in-store and online. This was particularly an issue in the early version of Walmart’s website due to its weak search engine capabilities. 

By modernizing their search engine, Walmart was able to make more of their inventory accessible online and enhance the shopping experience for customers. Meanwhile, the addition of a store map to the mobile app helped shoppers navigate through the store and made on-site shopping a lot more convenient.

By keeping their focus on the customer experience and on how they could best satisfy customer needs and expectations, Walmart was able to align their digital strategies and solutions to support their core value proposition.

EMBRACE EXPERIMENTATION

The digital initiatives that helped Walmart deliver on their brand promise was made possible by making digital innovation a priority. In establishing Walmart Labs, they encouraged a culture of ideation and experimentation that welcomes ambitious ideas. 

Through this approach, the innovation lab not only managed to upgrade their website and build a competitive mobile app but also produced solutions that transformed other key areas of the business.

For the experimentation process to bear fruit, however, it’s important for companies to nail down the actual problems that their customers care about. This way, they can come up with feasible solutions that deliver real value instead of mere vanity projects that are not really relevant to customers.

An effective approach to gain actionable customer insights is customer research.  At FROM, we make sure to conduct customer research as a first step in any digital transformation initiative. 

One method we often use is  observational research , which involves observing how customers use a product or service and asking them to share their thoughts throughout the process. We find this technique to be very useful in uncovering customer pain points and areas of friction that need to be addressed.

For example, if we’re looking to help a client improve their e-commerce site, we’ll recruit a number of customers and have them shop on the client’s website while we observe how they go about the process. We’ll ask them to verbalize what they’re thinking as they search for products, choose the ones they like, add selected items to their cart, and pay for their purchase. 

OPTIMIZE YOUR KEY ASSETS 

While Walmart was playing catch-up with Amazon in the e-commerce space, they did have a crucial asset that Amazon didn’t: their expansive network of stores. By integrating digital initiatives with their brick-and-mortar facilities through the “buy online, pick up in store” service, the company was able to deliver a shopping experience that their customers were looking for and gain a strong competitive advantage over their competitors. 

More importantly, Walmart got a head start by developing their BOPIS capabilities early on. When the pandemic hit, they had the systems and institutional knowledge in place to implement the service more efficiently than the other retailers.

Another crucial advantage that the retailer has is their people. Walmart is the largest employer in the world, with about 2.1 million workers globally, and three-fourths of them are in the U.S.

With such a huge workforce, they can pair their digital experiences with human support to deliver more value to customers. Examples of these are the “Check Out With Me” feature on the mobile app, which makes checkout much quicker for in-store shopping, and the InHome service, which adds a premium experience to the delivery service. 

Other companies can also secure a similar advantage by identifying the unique assets that set them apart from competitors and leveraging digital tools to amplify these differentiators, like Walmart did.  

LEVERAGE EXTERNAL EXPERTISE

In pursuing digital transformation, Walmart knew that they needed the technical knowledge, resources, and experience of companies that are more immersed in areas like e-commerce, data analytics, and app development. 

Since they had the money to do so, they made a string of acquisitions to bring these companies into the fold. While a number of these acquisitions didn’t work out well, Walmart was still able to benefit from the expertise of the people they brought in, such as Jet.com CEO Marc Lore who drove the growth of their online sales.

They also worked with companies such as Microsoft, which had the technical expertise to support their transformation and help them drive business outcomes. 

Since Amazon was already years ahead of them in the e-commerce space, Walmart had to speed up their innovation and keep up with the rapidly evolving expectations of customers. Building capacity on their own would’ve taken so much more time and resources. By partnering with key organizations, they were able to achieve impactful results much quicker and keep pace with the competition.

Other businesses can reap similar benefits by collaborating with external firms like FROM. We have decades of experience helping companies in pivotal areas like digital strategy, product development, program management, and customer experience.

A lot of legacy companies face an uphill battle when making the transition to digital, especially when their competitors are already far ahead of them. However, success is still possible when businesses are willing to invest in innovative solutions, optimize their resources, and put customers at the center of their digital transformation.

SUCCESSFUL INNOVATIONS OF OTHER ENTERPRISES

Our team has helped dozens of large companies implement innovative digital solutions. Here are a few success stories:

HealthPlanOne 

HealthPlanOne, one of the leading Medicare brokers in the U.S., wanted to deliver a digital experience that would help customers choose the right healthcare plans for their needs. Customers often felt overwhelmed by the variety of available plans that they would end up asking an agent to help them make a decision.

To support HealthPlanOne in meeting this core customer need, the FROM team built a highly engaging digital interaction that offered different levels of guidance and education about Medicare. With this new tool, the company achieved lower agent call time, cost savings, and a best-in-class digital experience that significantly increased online conversions.

The American Automobile Association wanted to improve their invoicing and billing processes to minimize errors, increase data accuracy, and make their back office more efficient. With this upgrade, the AAA would be able to deliver a superior experience for their partners, employees, and customers.

We collaborated with them to create a scalable digital roadmap for the planned improvements. To ensure that the strategy is sound and feasible, we employed various customer research methods such as observational research, surveys, and interviews to better understand the target audience. Our efforts paid off as the roadmap delivered significant ROI with less than one year payback.

As a global leader in aerospace technology, Airbus has the capabilities to produce high-definition images through innovations in their satellite imagery. 

To help the company optimize the value of these assets, our team worked with them to create a convenient e-commerce experience that enabled customers worldwide to order on-demand, custom aerial photography taken by their constellation of state-of-the art satellites.

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Inside Walmart’s Digital Transformation: 30 Tangible Steps on its Journey

Seven months ago, when Walmart and Microsoft signed a massive 5-year deal to drive sweeping modernization and change across the world’s largest company, CIO Clay Johnson said his primary goal was to accelerate the digital transformation of a company with 2 million employees and daily revenue of about $137 million.

And this week, as Walmart released earnings results for Q4 and the full year, it disclosed a wide range of initiatives it has completed or that are underway as Walmart remakes every facet of its enormous global operations to enable intimate digital relationships with the tens of millions of people who shop at Walmart each week.

“We’re excited about the work we’re doing to reach customers in a more digitally connected way ,” said Walmart CEO and president Doug McMillon in a press release.

“Our commitment to the customer is clear—we’ll be there when, where and how they want to shop and deliver new, convenient experiences that are uniquely Walmart.”

In July, when I had a phone conversation with CIO Johnson about the Microsoft megadeal, he offered this perspective: “If you think about Walmart’s transformations over time—for example, our development of the SuperCenters, our work in supply-chain improvements, and our work on distribution networks—it  makes perfect sense for us at this time to really accelerate our digital transformation.”

Johnson also noted that he and the entire company were “extremely excited” about embarking on that digital journey with Microsoft and its extensive capabilities in the cloud, with data, and operating at the highest scales imaginable.

So this week, in reviewing the massive amounts of information that came out about Walmart and its Q4 results, it was fascinating to explore both the scale and scope of its digital initiatives and how those efforts touch every part of the company in every corner of the globe.

I want to emphasize that while Walmart’s 5-year megadeal with Microsoft is deeply focused on digital advancement, technology upgrades, and delivering that new and essential customer experience that CEO McMillon described above, the long list of Walmart digital accomplishments I’m about to offer are not all offshoots of the Microsoft relationship.

But they do offer a remarkable roadmap of what digital transformation within the world’s largest company looks like and how truly sweeping such initiatives must be in order for companies to be able to “be there where, when and how” their customers want and expect them to be, as McMillon said.

So from material distributed publicly by Walmart with its earnings results, I’ve extracted about 30 separate steps the company has taken or will soon be taking on the road to digital—and I offer it here not only because it’s a compelling story but also in the hope it can give your company some ideas and perspectives for how to transform your company from what it is today into what it must become in the near future.

Walmart’s Digital Journey

• Walmart U.S. eCommerce continued to benefit from the expansion of grocery pickup and delivery and a broader assortment on Walmart.com. Grocery pickup and delivery are now available in more than 2,100 and nearly 800 locations, respectively.

Proposed for fiscal 2020 ending Jan. 31, 2020:   

• Walmart U.S. eCommerce net sales growth will be about 35 percent
• Approximately 3,100 grocery pickup locations by year-end FY20
• Approximately 1,600 grocery delivery locations by year-end FY20
• Capital expenditures of approximately $11 billion will include a strong focus on store remodels, customer initiatives, eCommerce, technology and supply chain

Additional highlights for fiscal year 2019

• Added about 1,000 grocery pickup locations, and reached nearly 800 grocery delivery locations
• Announced pilot with Udelv for custom autonomous cargo vans to deliver groceries
• Announced collaboration with Ford to test grocery delivery with self-driving cars
• Launched Spark Delivery test, a new last-mile grocery delivery service
• In-store innovations inclued autonomous shelf-scanning robots and floor cleaners and FAST unloaders
• Launched 17,000 virtual-reality training devices for employees
• Launched new digital scheduling system for store associates
• In all U.S. stores, launched service that allows customers to checkout from anywhere
• Launched new “endless aisle” feature allowing customers to order and pay for online items while inside a store
• in Walmart app, launched Item Finder and store maps chain-wide
• Launched new features for the Walmart.com Marketplace, including free two-day shipping on millions of new items and the ability to return marketplace items in stores
• Launched Jetblack in New York, a new conversational commerce platform
• Introduced 3D virtual shopping and “Buy the Room” feature for the Home category on Walmart.com
• Launched Walmart eBooks through partnership with Kobo
• Acquired virtual-reality studio Spatialand
• Announced partnership with Eko to create interactive storytelling for entertainment and retail
• Acquired ELOQUII, a digitally native brand focused on women’s fashion
• Launched Allswell, a digitally native vertical mattress brand
• Announced a high-tech distribution center that can move 40 percent more product than a traditional DC
• Announced a high-tech consolidation center that can receive, sort and ship freight and enable 3x more volume
• Acquired majority stake in Flipkart Group, India’s leading eCommerce business
• Launched online marketplace in Canada
• Launched first Walmart Rakuten Ichiba Store, the first Walmart eCommerce store in Japan
• Established joint venture with Rakuten for grocery delivery in Tokyo
• Announced agreement to acquire Cornershop for last-mile delivery capabilities in Mexico and Chile
• Walmart Mexico launched a secure digital payment option for mobile devices
• Walmart China established strategic partnership with Tencent, including use of WeChat Pay and Scan & Go
• Launched new depots in China for accelerated eCommerce fulfillment and delivery
• Converted four Sam’s Clubs to eCommerce fulfillment centers

The Walmart experience shows very clearly that digital transformation involves everything a company does, regardless of whether your company generates $137 million in revenue every day as Walmart does.

(Disclosure: At the time of this writing, Microsoft was a client of Evans Strategic Communications LLC.)

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******************* RECOMMENDED READING FROM CLOUD WARS:

The World’s Top 5 Cloud-Computing Suppliers: #1 Microsoft, #2 Amazon, #3 Salesforce, #4 SAP, #5 IBM Amazon Versus Oracle: The Battle for Cloud Database Leadership As Amazon Battles with Retailers, Microsoft Leads Them into the Cloud Why Microsoft Is #1 in the Cloud: 10 Key Insights SAP’s Stunning Transformation: Qualtrics Already “Crown Jewel of Company” Watch Out, Microsoft and Amazon: Google Cloud CEO Thomas Kurian Plans To Be #1 The Coming Hybrid Wave: Where Do Microsoft, IBM and Amazon Stand? (Part 1 of 2) Oracle, SAP and Workday Driving Red-Hot Cloud ERP Growth Into 2019

*********************

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Founder of Cloud Wars and Co-Founder of the Acceleration Economy, Bob leads the strategic direction of the global analyst network and actively covers the Cloud and Digital Business categories. Creator of Cloud Wars Top 10, a ranking and ongoing analysis world's most influential tech companies driving digital business and the digital economy. World-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

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Walmart Change Management Case Study

Change management is an essential aspect of any business that seeks to remain competitive in a dynamic market environment.

Walmart, one of the world’s largest retail giants, has had to navigate through significant changes in the retail industry, including the growth of e-commerce and shifting consumer behaviors. 

To maintain its position as a leader in the retail industry, Walmart has had to employ effective change management strategies to adapt to these changes successfully. 

This blog post presents a case study of Walmart’s change management efforts, exploring the strategies employed, the results achieved, and the lessons learned. 

By understanding Walmart’s approach to change management, businesses can learn valuable lessons and insights to help them navigate through their own organizational changes successfully.

Introduction to Walmart and its significance in the retail industry

Walmart is a multinational retail corporation that operates a chain of discount department stores, grocery stores, and hypermarkets. 

Founded in 1962 by Sam Walton, Walmart has grown to become one of the world’s largest retail companies, with over 10,000 stores in 27 countries and employing over two million people globally. 

Walmart’s success can be attributed to its focus on providing low-cost products, a wide range of merchandise, and a convenient shopping experience to its customers. 

Walmart’s innovative business strategies, such as its use of technology and supply chain management, have significantly impacted the retail industry, driving competitors to adopt similar approaches to remain competitive. 

Walmart’s success has made it a significant player in the retail industry, with its strategies being studied and emulated by businesses around the world

History of Walmart’s growth and success

Walmart’s growth and success can be traced back to its founder, Sam Walton, who had a vision of creating a retail store that offered low prices to customers. 

Walton opened his first store in Rogers, Arkansas, in 1962, which quickly became popular due to its low prices and convenient location. 

In the following years, Walmart expanded rapidly, opening more stores across the United States and becoming a publicly traded company in 1972.

Throughout the 1980s and 1990s, Walmart continued to grow, opening new stores and expanding into new markets. 

Walmart’s success was due, in part, to its innovative business strategies, such as its use of technology to manage inventory and supply chain operations, as well as its focus on providing low-cost products to customers. 

Walmart’s efficient operations and ability to negotiate lower prices with suppliers allowed the company to offer products at a lower cost than its competitors.

By the 2000s, Walmart had become a global retail giant, with stores in multiple countries and a significant impact on the retail industry. 

Despite facing criticism over its labor practices and impact on small businesses, Walmart’s focus on low prices and convenience to customers continued to make it a popular choice for shoppers. 

Today, Walmart remains one of the largest and most successful retailers in the world, with a significant presence in the retail industry.

Overview of Walmart’s organizational structure and culture

Walmart has a hierarchical organizational structure, with a clear chain of command and multiple levels of management. 

At the top of the hierarchy is the CEO, followed by executive vice presidents, senior vice presidents, and vice presidents. 

Each level of management is responsible for overseeing specific areas of the company’s operations, with clear lines of authority and responsibility.

Walmart’s culture is focused on providing low-cost products to customers and delivering a convenient shopping experience.

The company values efficiency, innovation, and collaboration, and encourages employees to take ownership of their work and contribute to the company’s success. 

Walmart’s culture is also characterized by its emphasis on customer service, with employees trained to prioritize the needs of customers and ensure they have a positive shopping experience.

Walmart’s culture has been shaped by its founder, Sam Walton, who believed in empowering employees and giving them the resources they needed to succeed. 

This approach has been reflected in the company’s employee policies, such as its emphasis on training and development programs, as well as its commitment to offering competitive wages and benefits to its workers. 

Need for Change Management at Walmart 

The retail industry has undergone significant changes in recent years, with the growth of e-commerce, shifting consumer behaviors, and increased competition. 

To remain competitive in this dynamic environment, businesses need to be agile and adaptable, constantly evolving their strategies to meet changing customer needs and market conditions. 

For Walmart, this has meant the need for effective change management strategies to remain competitive.

One of the main challenges facing Walmart has been the growth of e-commerce, with online retailers such as Amazon disrupting the traditional brick-and-mortar retail model. 

To compete in this new environment, Walmart has had to invest heavily in its e-commerce capabilities, including expanding its online product offerings and improving its supply chain operations. 

Walmart’s change management strategies have included acquiring online retailers, such as Jet.com and Bonobos, and investing in its own e-commerce platform to better compete with Amazon and other online retailers.

Another challenge facing Walmart has been shifting consumer behaviors, with customers demanding more convenience and personalized experiences. 

Walmart has responded by investing in its mobile app, offering online grocery pickup and delivery services, and improving its in-store experience through the use of technology such as self-checkout machines and interactive displays. 

These changes have required effective change management strategies, including employee training programs and leadership support, to ensure successful implementation and adoption.

How did Walmart manage changes?

Walmart’s response to the need for change has been largely successful, with the company implementing a range of strategies to remain competitive in a rapidly changing retail environment. 

Here are three examples of Walmart’s successful responses to the need for change:

1. Expansion of E-commerce capabilities

Walmart recognized the need to improve its online presence to compete with e-commerce giants like Amazon. To achieve this, Walmart acquired online retailer Jet.com and other e-commerce companies, and invested in its own online platform. These moves have helped Walmart significantly improve its online offerings, including its product selection and delivery options.

Walmart has leveraged its physical stores to offer convenient options like online grocery pickup and delivery, which has helped attract customers looking for a blend of online and offline shopping experiences.

Walmart’s investments in e-commerce have paid off, with its online sales increasing by 79% in Q2 2020, driven in part by the COVID-19 pandemic and increased demand for online shopping.

2. Focus on Sustainability

Walmart has recognized the importance of sustainability and environmental responsibility in its operations. The company has implemented a range of initiatives to reduce waste, lower carbon emissions, and promote sustainable practices across its operations. These initiatives include reducing plastic waste, investing in renewable energy, and sourcing more sustainable products.

Walmart’s sustainability efforts have not only helped the environment but have also resonated with customers who are increasingly conscious of the impact of their purchases. Walmart’s focus on sustainability has also helped the company reduce costs and improve efficiency, which has contributed to its bottom line.

3. Embracing Digital Transformation

Walmart has been at the forefront of using technology to improve its operations and customer experience. The company has invested in technologies such as robotics, artificial intelligence, and data analytics to improve its supply chain operations and enhance its in-store experience.

For example, Walmart has implemented autonomous robots in its stores to help with tasks like restocking shelves and cleaning floors, which has helped free up employees to focus on customer service. Additionally, Walmart has leveraged data analytics to better understand customer behavior and personalize its offerings, such as offering tailored product recommendations to shoppers.

Two Factors that explained the successful implementation of Walmart change management 

Walmart’s successful implementation of changes has been driven by a combination of strong leadership, employee engagement, and embracing new technology. 

By leveraging these factors, Walmart has been able to adapt to changing market conditions and remain competitive in a rapidly evolving retail industry. 

But the two most crucial factors behind the successful change management at Walmart are as follows:

Data-Driven Decision Making

Walmart has leveraged data analytics to make more informed and strategic decisions. By collecting and analyzing data on customer behavior, supply chain operations, and other key metrics, Walmart has been able to identify areas for improvement and make data-driven decisions about where to invest resources. This has helped Walmart prioritize its efforts and ensure that it is focusing on the initiatives that will have the greatest impact on its business

Focus on Customer Experience

Walmart has made a concerted effort to prioritize the customer experience in its change management efforts. For example, the company has invested in technologies like data analytics and artificial intelligence to better understand customer behavior and preferences, and has used this information to tailor its offerings to individual customers.

05 Lessons Learned from Walmart successful implementation of change management 

Here are five lessons that can be learned from Walmart’s successful change management efforts

• Emphasize strong leadership: Strong leadership is critical to the success of any change management effort. Walmart’s leadership was instrumental in driving the company’s change management efforts and ensuring that everyone was aligned with the company’s strategic goals.
• Engage employees: Engaging employees in the change management process is essential to building a resilient and adaptable workforce. Walmart invested heavily in employee training and encouraged workers to take ownership of their work, which helped foster a culture of innovation and adaptability.
• Leverage data analytics: Data analytics can provide valuable insights into customer behavior and other key metrics, which can help identify areas for improvement and guide strategic decision-making.
• Be flexible and agile: Flexibility and agility are critical to adapting to changing market conditions. Walmart was able to stay ahead of the curve by quickly adapting its operations to meet changing customer needs and preferences.
• Prioritize the customer experience: Prioritizing the customer experience is essential to building loyalty and driving sales. Walmart made a concerted effort to tailor its offerings to individual customers and invested in initiatives like online grocery pickup and delivery to make shopping more convenient and efficient

Final Words 

Walmart’s successful change management efforts provide valuable insights into how organizations can adapt to changing market conditions and remain competitive. By prioritizing strong leadership, employee engagement, data analytics, flexibility and agility, and the customer experience, Walmart was able to successfully implement changes that helped the company stay ahead of the curve.

As the retail industry continues to evolve, Walmart’s example serves as a reminder of the importance of remaining adaptable and open to change. By embracing new technologies, investing in employee training, and prioritizing the customer experience, organizations can position themselves for success in an ever-changing marketplace.

About The Author

Tahir Abbas

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Walmart's Workforce of the Future

Any discussion of the future of retail—or how we work—has to include Walmart. As of 2017, 90 percent of the US population lived within 10 miles of a Walmart store; with 11,766 locations worldwide and $514 billion in annual revenues, the discount store also has the distinction of being the largest private employer in the United States, with 1.5 million workers (2.2 million worldwide).

But that size and dominance doesn’t make Walmart immune to pressures faced by any other retail operation. In the second-year Harvard Business School course Managing the Future of Work , Professor William Kerr explores how technology and demographics are changing the way companies like Walmart, and their workers, operate.

“The pace of change in the retail sector is truly extraordinary,” says Kerr, the D’Arbeloff Professor of Business Administration and co-director of Harvard’s Managing the Future of Work initiative . “That requires a lot of reskilling of employees and hard choices, in an uncertain environment, in terms of how to deploy capital.”

“This digital transformation creates new jobs, but, more important, it changes the nature of jobs, even entry-level ones.”

Kerr captures that dilemma by detailing the scope of Walmart’s operations and current strategies in the case “Walmart’s Workforce of the Future.” Published in April, it offers an overview of the considerable investments the retail giant is making in its e-commerce infrastructure, in its employee training and support, and in technological innovations such as robot workers and in-house incubators.

Walmart fights a revenue drop

The case details how the rise of ecommerce (and the success of Amazon in particular) affected Walmart’s discount stores (which sell general merchandise but limited grocery items), resulting in a decrease in annual revenue at those stores from $142.5 billion in 2009 to 97.7 billion in 2018. During the same time period, revenue at Walmart’s “supercenters” (larger stores that also sell groceries and often include services such as eye care, beauty salons, and photo studios) increased by 16 percent, from $409.9 billion to $476.2 billion. (Walmart closed 2,214 discount stores or converted them into other formats from 1993 to 2018, with 2,576 supercenters opening during that time.)

In addition to increasing Walmart’s supercenter footprint, CEO Doug McMillon’s omnichannel strategy focuses on a seamless approach to the customer experience, with an emphasis on employee training and improved ecommerce and automation technology, both on the floor and in back office roles.

One foundational move to beef up its technology was Walmart’s $3.3 billion acquisition of online retailer Jet.com in 2016, an investment that immediately improved its ecommerce infrastructure. Walmart has also piloted and invested in robots to perform a variety of functions, from unloading trucks to scrubbing floors to scanning shelves and bringing items out of storage for curbside delivery orders. But public statements by senior executives made it clear that Walmart was equally committed to the complex, costly effort required to train its human workers.

“I want to be clear that we don’t believe technology is the answer to everything,” McMillon stated in a 2017 annual shareholder meeting. “The secret to success will always be our people. … It will be our humanity that drives our creativity, powers our competitive spirit, and keeps us out in front.”

Technology changes the nature of work

But at the same meeting, McMillon also acknowledged how technology changes the nature of work itself, a perspective echoed by Walmart Chief Sustainability Officer and Walmart Foundation President Kathleen McLaughlin. “…we’re now a tech company as much as a retail company,” Mc Laughlin said. “This digital transformation creates new jobs, but, more important, it changes the nature of jobs, even entry-level ones.”

Those demands require more of workers—and an equivalent commitment to re-skilling and compensation. In the case, Kerr cites Walmart’s investments in wages and training for employees of $1.2 billion and $1.5 billion in 2015 and 2016—part of a move that boosted starting pay for frontline associates from $9 per hour in 2015 to $10 in 2016 (it hit $11 per hour in early 2018). Yet in 2015, announcement of a wage increase resulted in a share price drop the following day of 10 percent, on news that the increase would cut earnings per share by 6 to 12 percent in 2016. It’s a dynamic that lays bare for MBA students the consequences of senior leadership’s choices, says Kerr.

“It’s easy to be critical and say that Walmart should be doing more, but when students review the company’s actions over the past five years, they have to confront the fact that every time the minimum wage went up, the stock price went down—and meanwhile, competitors have better margins.”

The case also outlines Walmart’s approach to training its workers, including its focus on building long-term, transferable skills through efforts such as Pathways, a program that teaches associates about the retail business model, explains the “why” behind the work they’re asked to do, and helps develop the soft skills that are useful in any field. Workers who completed the program received a raise and had increased job opportunities; however, many complained that it lacked clarity and that it took too long to move through the various modules. While Walmart planned for 500,000 employees to go through Pathways in 2016, the initial rollout was considerably lower; as a result, Walmart needed to revamp some parts of the program to speed up its completion rate. (Its Academies program, focused on training and empowering hourly supervisors to directly manage team members, faced similar challenges.)

In another move to build a more skilled, educated workforce, Walmart introduced a program in 2018 that offered workers the opportunity to enroll in online degree programs for $1 a day in business, technology, and supply chain management at three different universities; in June 2019, the program expanded to six universities and 14 areas of study, including cybersecurity and computer science. Widely hailed in the press for the opportunity it offers workers to graduate from college debt-free, the program has seen 7,500 employee enrollments in its first year.

“There’s so much to unpack in the choices that Walmart is making,” Kerr says, remarking that management has also introduced virtual reality goggles to train employees as well as an app, Spark City, that uses a game-type simulation to teach workers about store processes and customer service. Walmart has even crossed over with the gig economy by partnering with platforms including DoorDash, Postmates, Uber, and Lyft for package and grocery delivery.

‘You’re the CEO of Walmart’

So, is Walmart making the right investments for its future? “We spend a lot of time in conversation in this class,” says Kerr. “I’ll say, ‘You’re the CEO of Walmart. What would you have done differently? In 2030, what will your workforce look like? How much of your sales will be in-store, and how much online?

“An early indication of the uncertainty of the future is that, with a bunch of smart MBAs, we had a wide, wide range of opinions as to what the future looks like. From some putting all their chips on ecommerce to others who see Walmart as having a powerful position, particularly in more rural areas, where it can be the one place you go to get your prescriptions, do your shopping, and pick up your ecommerce packages—so building on that, rather than trying to become Amazon.”

Analysts generally give Walmart strong marks for how its investments in technology and training have set it up to compete.

“The progress that they’ve made and the strength they still possess has been working out for them to a good degree,” says Kerr. But it’s too soon to tell whether they have established themselves in a way that will allow them to truly excel. “That’s where the jury is still out. They are still defining the Walmart of the future.”

About the Author

Julia Hanna is an associate editor of the HBS Alumni Bulletin [Image: artran]

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Walmart: Digital Transformation

Vedant Thakkar

History of Walmart:

Walmart was founded by Sam Walton in Rogers, Arkansas, in 1962. Walmart was first known as “Walton’s Five and Dime”. After the first store’s debut on July 2, 1962, Wal-Mart Stores, Inc. was formally formed the following year. Walmart focused the majority of its growth in rural areas at first to avoid direct competition with other retailers. By 1968, the Walton family operated 24 enterprises and generated sales of $12.7 million.

Walmart is no stranger to alterations in technology and business. The largest retailer in the world, Walmart, has made significant contributions to innovation. Walmart has started out on a digital reinvention journey, bringing technologies to market that save customers’ time and money while also changing how business is conducted internally.

Walmart offers tools and solutions to help other companies with their digital transformation. The business has adopted a number of cutting-edge technologies, such as a platform that uses automation, machine learning, and data analytics to turn data into useful insights. Additionally, Walmart has improved its mobile capabilities and increased its efforts to revolutionize retail through digital means by adding list, return, robot, associate, and automation capabilities.

In order to stay competitive, Walmart keeps utilizing technology, such as machine learning and cloud-powered checkout and pickup options, to give its vendors and customers additional convenience. The business has also introduced autonomous vehicles and drones for delivery, and it has multiplied the sites where it can perform automated micro-fulfilment. To read labels, Walmart employees use augmented reality technology on mobile devices.

In today’s dynamic business world, managing customer interactions and sales operations can be challenging. Salesforce is helpful in this circumstance. This powerful CRM technology has revolutionized business operations by streamlining processes, boosting output, and improving customer relationships. Regardless of your size, Salesforce has the features and resources you require to manage your sales pipeline efficiently.

Salesforce has built a reputation as a leading business software package that serves as an enterprise resource planning (ERP) and customer relationship management (CRM) solution on several cloud computing platforms. It additionally provides a PaaS (Platform as a Service) that helps businesses in establishing their operational activities in a cloud environment by providing consultancy services. Salesforce was founded by Mark Zuckerberg in 1999.

Source: Salesforce

Source: Thompson Data

Benefits of Salesforce

1. Effective User Management: Salesforce makes it very simple to manage your team members, channel users, and external connections. Your user profiles can be synced with key apps to establish a single platform. Additionally, the ‘My Domain’ option lets you personalize your URLs. This aids in branding your URLs and ensures that they correspond with your company’s logo, images, and other marketing materials.

2. Automation: With Salesforce, business owners can quickly and easily streamline and standardize crucial tasks. Salesforce offers a number of workflow automation options, including pre-defined rules and graphical processes that may be tailored to your specific requirements. Sales teams can work more productively and cost-effectively by automating common processes.

3. Currently available AppExchange Tools: Salesforce AppExchange provides a wide selection of tools to improve what Salesforce can achieve. It is an app store with a huge selection of useful ones. Applications from the AppExchange are specialized solutions for managing workflow, customer relations, and business operations. These apps are used by businesses of all sizes to quickly execute complicated solutions because to their distinctive characteristics.

4. Customer Insights: Salesforce’s machine learning intelligence powers the Customer Relationship Platform (CRP), a real-time intelligence engine. Through CRP, a business can gain valuable customer insight. It aids in forecasting opportunities, measuring customer satisfaction, and understanding consumer behavior.

5. Mobile Access: Salesforce’s mobile feature allows you to access customer data from anywhere. It ensures that all data is up-to-date. Salesforce offers a mobile platform with powerful cloud tools. You can create your own apps to suit your needs. You can access data and reports and take important decisions anywhere, any time. Salesforce’s platform is great for creating and deploying mobile applications. It is #1 for businesses.

Salesforce and Walmart’s Partnership Announcement

Salesforce and Walmart Commerce Technologies (WCT) have unveiled a game-changing relationship that will transform how customers interact with the largest retailer in the world. Customers’ purchases will be delivered to their doors by Walmart’s GoLocal delivery service, and users can manage and track their orders and hasten the delivery of their online shopping with Walmart’s Store Assist app.

Retailers will be able to boost productivity and ensure that every purchase is delivered quickly to the customer’s door — wherever they are — by utilizing the same cutting-edge technology that drive Walmart’s omnichannel solutions. With live order visibility, trusted local pickup, and delivery options, Walmart’s relationship will offer customized and simple-to-use commerce experiences. Retailers can benefit from Walmart’s GoLocal service and Store Assist to offer quicker order pickup and same-day or next-day delivery to online customers if they utilize Salesforce’s e-commerce platforms to host and manage their websites.

They developed a fresh and practical digital experience for online merchants seeking to boost output and profitability over all channels. The businesses collaborate to improve customer experience, broaden their digital footprint, and strengthen their data and analytics skills. Salesforce’s CRM software will help Walmart better understand consumer requirements and trends.

Retailers will obtain technologies and services as a result of the Salesforce and Walmart relationship that will improve their e-commerce capabilities.

· With Walmart GoLocal, companies of all sizes may now have their orders delivered right to their doors.

• Salesforce customers can access the Walmart Commerce Technologies Store Assist service through the Salesforce CRM App Exchange platform. This solution is intended to make it easier for orders to be filled effectively at a Walmart store.

· Walmart Commerce Technologies’ Store Assist makes it easy to buy online and pick up in-store. You can use your local stores as a fulfilment centre to quickly pick up your order and have a smooth experience when handing it over to your customer or delivery driver.

· Manage Local Deliveries: Walmart GoLocal offers scalable local delivery solutions, ensuring reliable same-day delivery under a white-label experience. Retailers can maintain their brand’s customer experience while utilizing Walmart’s delivery infrastructure.

· Drive Efficiency and Profitability Across the Omnichannel Shopping Journey: Walmart Commerce Cloud & Order Management helps retailers simplify and improve their omnichannel shopping experience. It uses AI and up-to-date data to give customers connected, personalized experiences while keeping track of their shopping across different channels.

Last-mile delivery will also be part of the partnership. Walmart’s scalable technologies, such as Machine Learning, Cloud-powered Checkout and Pickup, Robotics, Big Data, and AI, will be made available to retailers by partnering with Salesforce.

Leveraging Technology — The Barcode

To increase the speed of checkouts, Walmart implemented the universal barcode in the early 1980s. The first person to create a bar code that could be read by all scanners was George J. Lauren. Early adoption of the universal barcode by Walmart gave them an advantage over their rivals because it allowed them to track the flow of merchandise into and out of their stores, providing them with real-time point-of-sale data that allowed them to choose the right mix of products for each store while informing manufacturers of the status of their inventory. This information may be mined and analysed to estimate demand, examine consumer behaviour and preferences, and — most importantly — enable producers to dispatch precisely the right number of things at precisely the right time without utilizing warehouses. The usage of radio frequency identification (RFID) was pioneered by Walmart. RFID is a method that requires producers to add small chips with thorough product information. Using the latest recent technologies, Walmart was able to determine which products were selling well, when they needed to be restocked in the store, and how many items to keep on hand. This increased the effectiveness of inventory management and gave Walmart a competitive edge when negotiating with suppliers and manufacturers. Walmart could set the price it was willing to pay from manufacturers since it tracked all the sales data and could thus identify the price points customers were willing to pay for specific products. According to reports, Walmart’s RFID-equipped stores had a 16 percent decrease in their inventory that was out of stock during the first eight months of 2005.

Advanced Supply Chain Management

Walmart is regarded as one of the greatest supply chain managers in the world. They have created a few strategies that assist them surpass their competitors in the price war in addition to leveraging cutting-edge technology like barcodes and RFID. Cross-docking was first used in the supply chain plan of Walmart. It is the practice of shipping items directly from a manufacturer or supplier to the customer or retail chain with little handling or storage. the 130 miles that separate Walmart’s fulfilment operations from the retailers they supply. These regional warehouses tend to be located near regions with cheaper labour and transportation. Cross-docking has been made possible by the ability of Walmart’s warehouses, which allows products to be shipped directly from manufacturers to a Walmart store without being offloaded or held in a warehouse. Transport, storage, and labour costs are decreased as a result.

The journey of Walmart’s digital transformation serves as proof of the value of embracing technology in the quickly changing retail sector. Walmart has not only kept relevant but has become a leader in the field of digital retail by utilizing e-commerce, data analytics, omnichannel strategy, and developing technology.

1. Sam Walton Walmart: Strategies that Made Walmart Succeed (profitworks.ca)

2. Retail Digital Transformation Trends: Salesforce and Walmart — Apty

3. Global revenue of Walmart 2023 | Statista

4. Walmart: Ummm…a tech giant ??? — Technology and Operations Management (harvard.edu)

Written by Vedant Thakkar

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How is Walmart amplifying shop tech for its customers?

Rohit Kaila

VP-Engineering, U.S. Omni Tech

Nov. 30, 2021

Rapidly changing customer habits and the advent of digital transformation have led to a definite shift in retail tech innovation. In a post-COVID world, going digital (or rather, phygital) is second nature to big box retailers like Walmart, where the priority is to provide customers a frictionless (and also, contactless) experience.

Over the past few years, we made tremendous progress. We adapted the latest trends and have lived up to customer expectations while building an omnichannel retail ecosystem that drives an immersive shopping experience.

In fact, Walmart’s retail tech initiatives have always been about helping customers shop better. Here’s the big picture:

Same day delivery

60% of consumers  expect same, next, or two-day delivery.

At Walmart, we strive to provide same-day delivery to our customers in select U.S. markets. This initiative facilitates the deliveries of groceries, household essentials, among other items from the stores to customers' doorsteps the same day. Sometimes the deliveries are also made within an hour!

Last-mile delivery

In the retail industry, last-mile delivery can make or break the customer experience. This is the reason why brands are accelerating their efforts with autonomous deliveries:

• Ever since its launch, robotic delivery business Starship has carried out considerable amount of  deliveries
• Alphabet’s Wing drone delivery is slated to launch soon
• Udelv is carrying out autonomous deliveries powered by machine learning-powered bots

Walmart has been trialing  last-mile delivery  vans via the Walmart GoLocal program – a new delivery service business. The program will dispatch workers from the  Spark delivery network  (crowd-sourced delivery platform that engages the services of independent drivers to complete deliveries) to merchants' stores to pick up the items and deliver them to the customers. 

The tech helps merchants select from a range of delivery types, including scheduled and unscheduled deliveries (including same-day delivery), and expand their delivery capacities and coverage based on customer requirements. 

Curbside pickup 

Customers are becoming accustomed to completing their purchases based on their conveniences with 58% of customers favoring flexible blended shipping options like Buy Online Pickup in Store (BOPIS). 

Walmart offers a curbside pickup option , which lets customers place an order online via a website or an app. They can schedule a specific time slot to pick up their goods at the curb or from a designated parking spot. Next, the purchases are loaded to their vehicle by a curbside customer service associate, with the transaction being completely contact-free.

Omni Optical

Experience economy is the buzzword across industries. It is being leveraged by brands that use Augmented Reality (AR) and Virtual Reality (VR) in their campaigns.

Likewise, Sam’s Club is taking experiential shopping up a notch with Omni Optical. The end-to-end optical journey with an app-first/mobile-first strategy is an inventive solution, which helps its members choose the perfect prescription glass from the comfort of their homes. 

Scan and Ship

Walmart’s members-only, in-app option – Scan & Go feature streamlines the shopping experience for customers, helping them reduce in-person contact. 

Available through the premium Walmart+ program, it makes shopping easy and intuitive. Customers need to use the app, scan barcodes to accurately add various items to their carts. 

In 2020, 9.6 million customers  downloaded  the Scan & Go app.

Sam’s Club’s Scan & Ship is a similar feature. It helps members get big-ticket items such as TVs, patio furniture, and playsets delivered to their doorsteps without worrying about organizing a pickup truck.

The result – a hassle-free, autonomous checkout process.

Walmart’s store redesign

Omnichannel customer experience is another emerging retail tech. A case in point is that of the use of unique Light Detection and Ranging (LiDAR) tech on iPhones to display key information to customers such as measurements, and helps them visualize interior design.

Similarly, Walmart’s store is an extension of our omnichannel customer experience . Three major highlights of the brick-and-mortar-store redesign include

• Updated Walmart signage on exterior and interior of stores to reflect the Walmart app icon. The clean, colorful iconography creates an impression on the customer’s minds, encouraging them to download and use the app while shopping.
• Aisles marked with letter and number combinations guide customers from phone to product.
• Thoughtful and straightforward navigation inspired by airport wayfinding systems helps customers efficiently browse products in the stores. 

The intent is to wow every customer as they shop at the stores, including powerful design elements to display unique products and drive value.

Inventory tracking robot

A  Juniper Research study  found that investments in Artificial Intelligence (AI) in the retail sector are growing with each passing year, so much so that global retail spending on the technology will reach $7.3 billion annually by 2022. Additionally, experts predict that AI-based solutions in retail will reach $20.05 billion by 2026.

Sam’s Club is using AI to elevate customer experience via a partnership with Brain Corp.

The latter will supply robotic floor cleaners powered by AI tech that’ll also offer autonomous navigation and data collection capabilities tied to a cloud-based reporting system. 

For example, it’ll facilitate adding inventory scans to the robotic scrubbers. This, in turn, will simplify obtaining crucial inventory data such as product availability and placement and help associates save time while serving customers in the best possible manner. 

Pick path optimization

During the picking process, the main reason for inefficiency is motion waste. It’s an unnecessary movement, which makes a task longer than it should take. Pick path optimization solves this bottleneck for retailers. 

The pick-path optimization feature from Walmart type bunches orders together, creating a path for the associate to pick it up. This process helps them quickly report out-of-stock items in the system. We started the pick path optimization on a micro-scale for its storage data, using several data science technologies and building in-house algorithms that included plenty of analytics. 

Needless to say, it has helped us increase our efficiency and customer satisfaction manifold. 

Winning customers’ hearts

At Walmart, customer is at the heart of everything we do. We constantly churn out cutting-edge retail technology, which helps our associates deliver the best experience to the customers.

We understand that the NOW customer is always on and has different expectations, and that, they require rapid resolutions across touchpoints. Our omnichannel retail tech innovations help us reinvent their journeys end-to-end, making lives easier.

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Stay connected, additional links, 2019 nrf big show report, an insider's view of walmart's digital transformation.

Jeremy King, Walmart's executive vice president and chief technology officer, offered insight during the NRF show on how the company formulates its technology strategy and what technologies it is considering for the future.

Feb. 21, 2019 | by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

With technology evolving at a feverish pace, how does the nation's largest retailer adapt? Since its inception, Walmart has distinguished itself as a leader in using technology to optimize operational efficiency and deliver a high-quality shopping experience. But as technology has evolved, and Walmart has grown, the company has faced the challenge of finding technology partners that can scale to meet its needs.

Jeremy King, Walmart's executive vice president and chief technology officer, offered some insight during the recent NRF show on how the company formulates its technology strategy, what technologies are driving change and which ones it is considering for the future. 

During the panel discussion, moderated by Wall Street Journal reporter Sara Castellanos, King said Walmart has integrated its internal operations and retail divisions to allow the company to adopt technology faster.

"There are so many things that are better in this (organizational) structure," he said. "It's so much simpler to get things done now."

"We are expanding the technology investment rapidly," he said, adding that 1,700 technology employees were hired in 2018, and another 2,000 will be brought on this year. 

Automating customer processes

Automating customer processes has been a big benefit for the company, King said, as "People want a digital experience. It's no longer acceptable not to have a digital experience."

Last November's Black Friday was the best in the company's history, King noted. "Every year it seems to get bigger," he said. "It's amazing to see how many people come out for Black Friday."

Another example is Marketplace Returns, minimum returns standards for third-party sellers on Walmart's website. The standards ensure a consistent customer experience, he said.

E-commerce has benefited the company in other ways as well, King said, noting its use of stores for online order pickup has helped to integrate its digital and physical operations. 

The key technologies

Focusing on specific technologies, cloud technology has delivered some of the biggest improvements, King said.

Last year Walmart and Microsoft announced a five-year partnership to drive digital transformation across Walmart, boost shopping speed and empower retail associates.

Walmart is moving most of its customer facing technologies to Microsoft's Azure cloud, King said.

King also cited machine learning as one of the most important technologies Walmart is using, going as far as to say people underestimate how big of a change it will be. Machine learning — the use of algorithms and statistical models to perform work without explicit instructions — is a technology Walmart applies across several areas.

The company has applied machine learning in developing its online shopping cart, in its shelf scanning robot, and in routing and scheduling, King said. 

"There's a huge amount of machine learning in that robot," King said regarding the company's shelf scanning robot, which helps to predict shelf inventory more accurately. Predicting inventory accurately addresses one of the biggest consumer complaints — out of stocks, he said.

Where retailers used to consider it sufficient to be 95 percent in stock, it now has to be closer to 100 percent, he explained, thanks in large measure to e-commerce. When customers order online, they have to know it will be in the store when they come to pick it up.

Data brings a competitive advantage

King stressed that machine learning requires human participation, as a human has to be involved in assigning value to the data.

Walmart, because of its size, has more data than most of its competitors, which King cited as a critical competitive advantage. "Our data can drive reinforcement learning faster than any other company," he said. "The richness of our data is really helping us."

Virtual reality, another retail technology, has been used to improve training. "It's a really great way to learn," King said, adding that it helps employees grasp information better.

Blockchain benefits the food supply chain

Blockchain technology, another up-and-coming technology, has been deployed in the company's food supply chain, King said. The company has taken a pioneering role in using blockchain technology to improve its food supply chain.

In an NRF podcast interview, King went as far as calling blockchain technology a game changer for the supply chain, but it is still in its early phase of development. "I do think it has changed the way we think about fresh produce," King said. 

The blockchain ledger also makes it easy for a company to respond to recalls, he said. "It's all about food safety," he said. "Consumers are asking about this."

The technology being used in the company's cold chain has also allowed it to deliver fresh food to customers successfully, which King called a "game changer." Some of Walmart's biggest food delivery orders are for schools and senior centers.

The technology adoption process

Adopting new technology requires a lot of trial and error since new technologies are not always sufficiently developed when they are introduced. For example, Walmart announced Scan & Go to some stores in 2018, allowing customers to make purchases using a smartphone, but discontinued shortly after , claiming a lack of consumer interest. 

Even though Sam's Club continues to use Scan & Go, King said there were too many customer errors with the Scan & Go technology. He said it is sometimes necessary to wait for a technology to improve before doing an extensive rollout.

King is also very interested in computer vision technology, but he said the technology needs to do a better job scanning smaller size items. The computer at present needs to get too close to the item, he noted.

The expansion of automation in company operations has not reduced its workforce, King said, meaning the company still faces the challenge of getting employees to embrace technology. Meeting this challenge successfully, he said, requires having commitment from the top.

Elliot Maras

Elliot Maras is the editor of Kiosk Marketplace and Vending Times. He brings three decades covering unattended retail and commercial foodservice.

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Technology and Operations Management

Mba student perspectives.

• Assignments
• Assignment: Digitization Challenge

Digitization at Walmart

Can you think of any company or industry that hasn't been transformed – for better or for worse – by digitization? Let's see how Walmart has managed…

Introduction

It is hard to think of an industry or company that hasn’t been shaped by digitization and the Internet of Things (IoT) movement. In retail, the IoT offers opportunities in three critical areas: customer experience, the supply chain, and new channels and revenue streams [1].

Digital from its inception, Amazon has crushed many traditional retailers online. Wal-mart, determined to avoid this fate, has poured $ billions into its digital transformation effort, which has included over 3500 new hires and 15 acquisitions [1].

Walmart today is the second largest online retailer in the US behind Amazon [2], with online sales of $14bn last year, about one-sixth Amazon’s [3], but there are opportunities for further business/operating model transformations via digitization.

Pathways to Just Digital Future

How Walmart is using digital technology to develop its business model and organizational model

Walmart is leveraging digital technology in diverse ways:

• Aggressive expansion of online offers to compete with e-commerce giants e-Bay and Amazon. com now sells 15 million different types of items, with an expansion rate of 1 million items per month [2].
• Introduction of Prime-like membership program called “ShippingPass”, which offers a two-day rapid delivery service that is supported by several giant “Online Fulfilment Centre” warehouses around the country.
• Expansion of the free curbside pick-up service for groceries purchased online. The pick-up service is available in 400 stores in 60 markets.
• Adoption in 2012 of a top-of-the-range search engine – “Polaris” – which provides personalized recommendations to customers. In the year after it was launched, Polaris increased online sales conversions by 20% [3].
• Sensing when a customer enters a physical store and facilitating browsing of the store’s ads and offers, and helping with item locations
• Allowing customers to create shopping lists, use digital coupons, and adding up the total cost of their shopping in real-time
• Price-matching of purchased items
• Like many retailers, Walmart has made extensive use of Big Data to personalize its interaction with customers, drawing insights from analyses data on purchasing behaviour, search histories and web interactions.
• Walmart recently secured a patent for a self-driving shopping cart.The shopping carts could assist customers to navigate and find items on their shopping lists [4].
• Walmart has increasingly relied upon RFID technology to improve inventory management and to track individual items more efficiently than can be done with bar codes [5]. RFID can be used to create “smart shelves” which automatically alert staff when items are low in stock. Research estimates that Walmart has been able to reduce its out-of-stock inventory by up to 16% by introducing technologies like RFID into its supply chain [1].
• Walmart recently announced it was six to nine months away from using drones to track inventories in its warehouses, with jobs of quality-assurance employees on the line [4].
• Walmart is currently building one of the biggest private clouds, which would host data from its 11,000 stores and is expected to make 40 petabyte of data available every day [1].
• Formed in May 2011, @WalmartLabs is an idea hub aimed to generate innovative ideas for improving customers’ online and in-store shopping experience. Several of the digital transformation initiatives listed here were proposed and developed by the @WalmartLabs team.

Additional steps that Walmart should consider implementing

Source: Accenture (2015), ‘The Internet of Things: Revolutionizing the Retail Industry’

In the rapidly-developing field of digital transformation, Walmart cannot be complacent.  The diagram above includes some additional initiatives that Walmart could develop. Specific initiatives include:

• Smart Mirrors: a number of fashion retailers such as Macy’s, Topshop and Nordstrom are experimenting with smart mirrors that enable customers to alter the dressing room lighting; virtually try on items; or see whole outfits that could complement a particular garment [6].
• Robots are likely to play an increasing role in retailers’ manual operation of stores. Following the “smart carts” trial, Walmart should evaluate further ways to reduce costs through in-store robots.
• Smart price tags: Some retailers are considering shelf-edge tags that can identify customers by their mobile phone, and can reduce prices for those with loyalty cards or certain logged past purchases [7]. They can also be used to alter prices based on demand e.g. instantly reducing prices at non-peak hours or when items are approaching their Best Before date
• Smart packaging uses technology to help control and detect changes in the storage environment, and trace product history [8].

Word Count: 799

References:

[1] “Walmart: Where digital meets physical”; Capgemini Consulting, 2015. Available at https://www.capgemini-consulting.com/resource-file-access/resource/pdf/walmart_pov_15_7_2015.pdf

[2] “Here is how Walmart is reigniting its e-commerce growth”; Fortune Magazine, 2016. Available at http://fortune.com/2016/08/18/walmart-ecommerce-2/

[3] “Walmart revamps e-commerce technology as Amazon applies pressure”; The Wall Street Journal, 2016. Available at http://blogs.wsj.com/cio/2015/11/25/wal-mart-revamps-e-commerce-technology-as-amazon-applies-pressure/

[4] “Walmart’s self-driving shopping cart is a new frontier for the Internet of Things”; Business Insider, 2016. Available at http://www.businessinsider.com/walmarts-self-driving-shopping-cart-is-a-new-frontier-for-the-internet-of-things-2016-9

[5] “RFID Technology Boosts Walmart’s Supply Chain Management”; University of San Francisco, 2016. Available at http://www.usanfranonline.com/resources/supply-chain-management/rfid-technology-boosts-walmarts-supply-chain-management/#.WC9p8Y-cE2x

[6] http://www.sachsinsights.com/the-power-of-the-small-innovation-macys-dressing-room; http://tech.co/smart-fitting-room-future-retail-2015-12 ; http://www.cbsnews.com/news/how-smart-mirrors-are-boosting-clothing-sales/

[7] “DIY Chain Tests Variable Pricing”; RetailWire, 2013. Available at http://www.retailwire.com/discussion/diy-chain-tests-variable-pricing/

[8] Park, Y.W., Kim, S.M., Lee, J.Y. et al. Application of biosensors in smart packaging. Molecular & Cellular Toxicology . (2015) 11: 277. http://link.springer.com/article/10.1007/s13273-015-0027-1 ; http://www.forbes.com/sites/moorinsights/2015/10/01/what-does-food-packaging-have-to-do-with-big-data-and-the-internet-of-things/#770c91d378a4

Student comments on Digitization at Walmart

It appears that Walmart has been investing heavily in both growing its online presence as well as upgrading its actual storefronts. At the end of the post, you reference future ideas for potential implementation at the retail store level – how do you think a company like Walmart (or any other retailer) balance their capex dollars for improving their online presence and supporting logistics as opposed to investing in products that improve the physical store locations?

Continuing on the thought from the previous comment, with Walmart as a low-cost operator appealing to a range of consumers, is there a compelling argument for Walmart to invest so heavily to look like Amazon? From a logistics standpoint this is a logical move to streamline and use existing autonomous machines to do easy and repetitive labor tasks, but from a consumer lifetime value (CLV) point of view, would they not be commoditizing their brand of every day low price (EDLP) and the brand of Walmart in favor of just another online retailer? Amazon can target middle to higher-end consumers with the requirement for a credit card and stable shipping address, but Walmart provides an in-store opportunity for the more liquidity constrained consumers that can’t be lost. Amazon is disrupting Walmart’s incredible status in the way that Walmart disrupted other consumers [1], but should all of those technological advances be applicable to Walmart, or should they differentiate in another way and stick with their core consumer?

[1] Laura Heller, “The Battle Between Walmart and Amazon Will be Epic”, Forbes, October 30, 2016, http://www.forbes.com/sites/lauraheller/2016/10/30/the-battle-between-walmart-and-amazon-will-be-epic/#1a526e9b5da3 , accessed November 20, 2016.

You mention the Walmart app’s recent expansion and its new functionality including helping with item locations in store, allowing customers to create shopping lists and use digital coupons and facilitating the browsing of the store’s ads and offers. In many respects these are valuable additions for the customer but Walmart must be careful not to use this data in ways that appear ‘creepy’ or intrusive to customers. As the amount of data companies hold on us increases, data integrity and privacy will become more and more important. I would challenge Walmart to use its data in the smartest and most selective way possible without risking alienating customers who may find its more technologically ‘advanced’ practices off putting.

Thanks for the interesting post on Wal-Mart. I was surprised to see just how extensive the company’s online presence currently is. Relative to Amazon, which I’d argue is more heavily merchandised towards non-perishable goods, I wonder if Wal-Mart will ever be able to compete on the same scale as its larger competitor in online retailing. That said, your point regarding curb-side pickup certainly rings true–this seems like a natural opportunity, particularly given the typical Wal-Mart customer likely goes to the store with the intent of using at least some of the items purchased that same day (e.g. food). Playing this forward, should curb-side pickup becomes a more meaningful portion of total sales, it would be interesting to consider the impact that this would have on the layout of Wal-Mart stores (add a drive thru?) and if customers’ baskets would decrease in size due to fewer in-store, impromptu purchases.

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Digital Transformation Examples: 3 Company Case Studies

Learn how three legendary companies—Walmart, Ford, and Anheuser-Busch InBev—improved customer experience by focusing digital transformation around data.

Digital transformation is a process by which a company invests in building out new digital products and services in the effort to rethink the business around digital. An effective digital transformation improves customer experience and enhances the way a company operates behind the scenes.

To digitally transform, your business needs to deploy new products and technologies. With these new products come new ways to connect with your customers and more data to inform roadmaps and strategies.

Once the investment in digital begins, your business can use new products and data to identify growth opportunities. The three case studies below—from Ford, Walmart, and Anheuser-Busch InBev—show how legendary companies went beyond simply creating an app and truly re-thought how digital efforts supported sustainable growth for the business.

• Digital transformation brings about new products and services that improve the customer experience.
• Digital transformation can also be an investment into new systems, goals, and methodologies that make internal processes more efficient.
• Digital transformation gives you more informative behavioral data and more touchpoints with the customer.
• You can leverage the new data gained from digital transformation efforts to further improve the customer experience and drive sustainable growth.
• AB InBev, Walmart, and Ford used investments in digital technology to accelerate internal processes and deploy new digital products that, consequently, provided valuable data on the customer experience and influenced future business investments.

3 examples of digital transformation through data

Here are three examples of legendary companies that embarked on digital transformation with a focus on data. These companies carefully considered how new technology could bring about data that both made internal processes more efficient and produced insights about how to grow customer value.

Brewing company AB InBev underwent a digital transformation by compiling their network of independent breweries into a unified powerhouse . One of their priorities was getting their data in the cloud, and by doing so, employees can now pull data that’s gathered globally and use it to make data-backed decisions.

For example, more accurate demand forecasting means AB InBev teams can match supply with demand—essential for such a large company with a complex supply chain. Access to data from all the breweries means they’re able to experiment faster and roll out changes that improve business processes.

Gathering more data and opening up that data to internal teams was just the first step of the process, though. AB InBev capitalized on their digital investments by launching an ecommerce marketplace called BEES for their SMB customers—the “mom and pop shops”—to order products from. With the BEES platform, AB InBev found that their small and medium-sized businesses browsed the store on the mobile app and added items to their cart throughout the day—however, they only made the final purchases later in the evening.

Based on this behavioral data, the BEES team started to send push notifications after 6:00 p.m., recommending relevant products, which led to increased sales and greater customer satisfaction. By the end of June 2021, BEES had gained over 1.8 million monthly active users and had captured more than $7.5B in Gross Merchandise Volume .

Jason Lambert, the SVP of product at BEES, credits their success with the hard data that told them how their customers behaved and what they needed: “it turned out to be a thousand times better than any of our previous strategies or assumptions.” BEES used behavioral analytics to respond quickly, changing the buying experience to match the needs and habits of their retailers.

As a traditional brick-and-mortar retailer, Walmart began digital transformation when they opened an online marketplace. However, digital transformation is an ongoing process—it doesn’t end at the first website. A digital transformation means companies refocus their operations around digital technology—and this usually happens both internally and in a customer-facing way.

To drive more customer value through digital touchpoints, Walmart set up mobile apps and a website to allow customers to purchase goods online. After analyzing customer behavioral information from their app, they added more services such as same-day pickup, mobile ordering, and “buy now, pay later.”

To be successful with digital transformation, Walmart prioritized data access for everyone on their teams. Breaking down internal silos allowed employees to take ownership; They acted fast and made concrete changes to improve the customer experience.

Walmart’s head of mobile marketing, Sherry Thomas-Zon, notes how critical data—and access to data—are to digital operations. “Our marketing and product teams are always looking at numbers,” Thomas-Zon said. “You can’t work quickly without a self-service data and analytics tool for marketing, especially in an organization as large as Walmart. It keeps our teams agile, despite our size and the increasing amount of data we collect and analyze.”

Ford has embraced several digital transformation initiatives—including using technology to transform and improve the manufacturing process at one of its biggest factories. Not having the correct parts available holds up workers and slows down the production process. Ford introduced a material flow wireless parts system so they could track the quantities of different parts and make sure there were enough available.

In 2016, Ford also introduced a digital product for their customers—the FordPass app . It allows Ford owners to remotely control their vehicles. For example, drivers can check their battery or fuel levels and lock or unlock their car from their phone.

To capitalize on these new digital touchpoints with the customer, Ford leveraged data to improve the experience of the FordPass app. First, the product team grouped customers based on the in-app behaviors they demonstrated. Then, based on each group’s activity, Ford personalized the app experience to provide more value. Jian Wei Hoh, head of business design at Ford, said, “ Designing around cohorts is a game-changer .”

Ford’s success is grounded in the same process as Walmart and AB InBev. They used their digital transformation to gather detailed information about how their consumers interact with their products. Then, they made data-led decisions to provide more value to their customers.

Overcoming common digital transformation challenges

It’s not called a transformation for no reason. You’re changing the way your business operates, which is no easy feat. Here are the common challenges you’ll face and how to overcome them.

Teams undergoing a digital transformation have to:

• Unlearn habits
• Get used to new structures and ways of collaborating
• Deal with changing roles
• Develop new skills

All of this takes time and, as you integrate new systems with the old, there’s a risk that teams will get siloed and chaos will ensue.

A key way of overcoming these challenges is planning. Create a digital transformation strategy roadmap in advance. Outline your integration strategy and detail how this will affect each team. Once you’ve created your plan, share it with the entire company, so everyone can use it as a single reference point. Use a project management tool that allows team members to get a big-picture overview and see granular details like the tasks they’re responsible for.

It takes time for teams to onboard and move away from what was successful under the previous system, for example, shifting from heavyweight to lightweight project planning. Make sure you factor some breathing space into your roadmap—give everyone a chance to get used to the new way of operating.

As part of a digital transformation, you’ll want your team to develop new skills as well. Upskill your team by incorporating digital skills into your employee development plans . Provide people with opportunities to learn and then track their progress.

More challenges arise if you believe there’s an end-state to digital transformation. New technology and new consumer behaviors are always emerging, which means digital transformation is an ongoing process. It’s not something you’ll complete in a week. Rather, it’s a continuous state of experimentation and improvement. At Amplitude, we refer to this process as digital optimization . If digital transformation brings new products, services, and business models to the fold, then digital optimization is about improving these outputs. Both digital transformation and digital optimization are important—digital transformation signals the start of new investments, and digital optimization compounds them.

Tips for building a digital transformation strategy

A digital transformation won’t magically grant you more profit. Examine how each part of the transformation will affect your customers and your employees. Then, you can be intentional and introduce initiatives that positively impact your business.

Diagnose what you want from a digital transformation first

There are different ways of going about a digital transformation. Some companies prefer to implement an all-inclusive digital strategy, and they transform all parts of their organization at the same time. Others opt for a less-risky incremental strategy. Every company is different. To choose the best approach, examine your whole organization and analyze where digital systems could help.

Consider your business goals. Investigate how a digital transformation could impact the customer experience. What new products could you provide? How could you improve your services? For example, you might use artificial intelligence to create a chatbot that reduces customer service wait times—or purchase software that does the same.

You’ll also want to consider your business processes. How could a digital transformation speed you up? Improve your operations? Allow more collaboration between teams? Asking these questions allows you to challenge the way you operate and will help you identify problems in your organization that you might not have noticed before. For example, perhaps your deliveries are often delayed, and you could make delivery smoother by digitizing elements of your supply chain .

Get cross-team involvement

Though different teams may work separately, your customers are affected by each department. Collaboration elevates everyone’s work because it means people can make informed decisions.

Make sure you get input from all of the right stakeholders when you create your digital transformation strategy. Ask:

• What processes hold you up?
• Where are the bottlenecks?
• What data would be useful for you?

Allow everyone to access the data they need without input from anyone else. Help your employees improve their data literacy . Start by providing training so everyone can use the data tools and software in your organization—consider setting up a capability academy for data skills . To help everyone in your organization access and analyze data, adopt easy-to-use self-service tools. Then, lead by example. Provide inspiration by using data storytelling in your presentations to explain the decisions you make.

Encourage collaboration between teams by creating shared resources, so they have spaces to present insights and submit suggestions. This could be as simple as creating a Google Doc for brainstorming that multiple teams can access, or sharing charts directly within your analytics solution like with Amplitude Notebooks . Then, you can start to experiment and make improvements to the digital customer experience like Walmart, Ford, and AB InBev did.

Once your digital transformation is moving, a digital optimization strategy is an opportunity to generate growth. Your digital transformation initiatives will continue in parallel, and the process will become a feedback loop:

• Deploy new digital systems and products
• Analyze the data that comes forth from these investments. Use it to draw insights about your customers or processes.
• Make decisions based on the data and make changes.
• Repeat. (Or, optimize .)

Always focus on your customers

Keep customer needs at the heart of what you do. Let them be your guiding light as you go through your digital transformation—as you gather more data about how your customers interact with your new digital products, use it to make the experience even better for them. It’ll lead to more trust and loyalty and, ultimately, result in more recurring revenue.

To continue your learning about digital transformation and optimization, join an Amplitude workshop or webinar or read our Guide to Digital Optimization .

• MIT Sloan. How to build data literacy in your company
• McKinsey & Company. Digital transformation: Raising supply-chain performance to new levels
• Harvard Business Review. Boost Your Team’s Data Literacy
• Datanami. From Big Beer to Big Data: Inside AB InBev’s Digital Transformation
• Predictable Profits. How Ford Embraced Digital Transformation
• APMG International. Heavyweight v Lightweight Management
• Whatfix. Upskilling Your Workforce in 2022

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Walmart Business Strategy: A Comprehensive Analysis

By   Julie Choo

Published: January 5, 2024

Last Update: January 5, 2024

TOPICS:   Service Design

In the dynamic landscape of retail, Walmart stands as a behemoth, shaping the industry with its innovative business strategies . This article delves into the core of Walmart’s success, unraveling its business strategy and digital transformation from top to bottom.

Walmart Business Strategy

Walmart’s business strategy is a well-crafted tapestry that combines a variety of elements to secure its position as a retail giant. At the heart of this strategy lies a robust operating model approach that encompasses a diverse range of channels and tactics. 

Transition to An OmniChannel Marketplace

The Walmart business strategy includes leveraging its vast physical presence through an extensive network of stores, drawing customers in with the promise of Everyday Low Prices (EDLP). This commitment to affordability is not just a slogan; it’s a cornerstone of Walmart’s marketing ethos, shaping consumer perceptions and driving foot traffic to its brick-and-mortar locations.

Building Strength via its Emerging Digital Operating Model

Walmart’s business business strategy extends beyond traditional advertising methods and its strength is in its operational strategy where it is charging ahead with digital transformation to become a more complete Omnichannel Marketplace to combat competitors such as Amazon. The retail giant has embraced the digital era, utilizing online platforms and e-commerce to reach a broader audience. Part of this digital evolution involves the strategic placement of distribution and fulfillment centers , ensuring efficient order processing and timely deliveries. By strategically integrating distribution and fulfillment centers into its operating model , Walmart maximizes operational efficiency, meeting customer demands swiftly and solidifying its reputation for reliability in the competitive retail landscape.

In essence, Walmart’s holistic digital operating model backed by a evolving digital transformation  strategy, encompassing physical stores, online presence, and strategically placed distribution hubs, reflects a dynamic and adaptive approach to consumer engagement and satisfaction. 

Walmart’s Existing Business Model Before Digital Transformation

Walmart’s retail business .

Walmart stores, comprising a vast network of discount stores and clubs, serve as the backbone of the retail giant’s physical presence. Walmart’s store format, ranging from neighborhood discount stores to expansive membership-based clubs, caters to a diverse customer base. These Walmart stores are strategically positioned to provide accessibility to a wide demographic, offering a one-stop shopping experience.

The discount stores, characterized by their commitment to Everyday Low Prices (EDLP), have become synonymous with affordability, attracting budget-conscious consumers. Simultaneously, Walmart clubs offer a membership-based model, providing additional benefits and exclusive deals. The amalgamation of these store formats under the Walmart umbrella showcases the company’s versatility, catering to the varied needs and preferences of consumers across different communities and demographics.

Walmart Pricing Strategy

Pricing strategy.

Walmart’s pricing strategy and its competitive advantage are substantiated by reputable sources in the retail industry. The pricing index data, indicating that Walmart’s prices are, on average, 10% lower than its competitors, comes from a comprehensive market analysis conducted by Retail Insight, a leading research firm specializing in retail trends and pricing dynamics.

Everyday Low Prices

Walmart’s success in the retail sector can be attributed to its commitment to Low Price Leadership, a strategic approach that revolves around providing customers with unbeatable prices. Leveraging Economies of Scale, Walmart capitalizes on its vast size and purchasing power to negotiate favorable deals with suppliers, enabling the company to pass on cost savings to consumers. The integration of Advanced Technology into its operations is another pivotal aspect of Walmart’s strategy. From inventory management to supply chain optimization, technology allows Walmart to enhance efficiency and keep prices competitive.

Walmart strives to keep it’s pricing tactics to the concept of “Everyday Low Prices” (EDLP). This philosophy ensures that customers receive consistently low prices on a wide range of products, fostering trust and loyalty. Additionally, the Rollback Pricing strategy involves temporary price reductions on select items, creating a sense of urgency and encouraging sales. Walmart’s Price Matching Policy, both in-store and online, further solidifies its commitment to offering the best deals. This policy assures customers that if they find a lower price elsewhere, Walmart will match it.

The insight into Walmart’s “Everyday Low Prices” (EDLP) philosophy and its impact on a 15% lower average price for common goods compared to competitors is derived from a detailed report published by Priceonomics , a respected platform known for its in-depth analyses of pricing strategies across various industries.

The statistics regarding Walmart’s market share of 22% in the U.S. grocery market and the 19% higher customer loyalty rate compared to competitors are sourced from recent market reports by Statista, a reliable and widely used statistical portal providing insights into global market trends and consumer behavior.

Multiple layers of Discount

Walmart’s embrace of Multiple Discounts adds another layer to its pricing strategy. Whether through seasonal promotions, clearance sales, or bundled deals, the company provides various avenues for customers to save money. This multifaceted approach to pricing reflects Walmart’s dedication to delivering value to its customers, ensuring that affordability remains a cornerstone of the retail giant’s identity.

These sources collectively reinforce the significance of Walmart’s pricing strategy in maintaining its competitive edge and dominating the retail landscape

Walmart’s Servicing Business

Walmart’s strategic expansion into the servicing business marks a transformative shift, positioning the retail giant as a comprehensive one-stop-shop that extends beyond conventional retail offerings. This venture encompasses an array of lifestyle services, ranging from financial services to automotive care and healthcare clinics. Walmart’s aim is clear: to seamlessly integrate into the daily lives of customers, providing not only products but also essential services, thereby enhancing its role in customers’ routines.

In response to the evolving preferences of contemporary consumers who prioritize convenience and accessibility, Walmart’s strategy seeks to streamline the customer journey. The provision of a diverse range of services alongside its traditional retail offerings exemplifies Walmart’s commitment to simplifying the consumer experience. This comprehensive approach not only caters to the varied needs of customers but also cultivates a sense of loyalty, as individuals find value in the convenience of addressing different requirements all under one roof.

The multifaceted nature of Walmart’s strategy is anticipated to foster increased customer retention. By offering not only a wide array of products but also an extensive range of lifestyle services, Walmart solidifies its position as a retail powerhouse, adapting to the changing landscape of customer-centric businesses. The convenience and value embedded in this approach are poised to elevate Walmart’s stature, making it an indispensable part of customers’ lives.

SWOT Analysis of Walmart’s Business strategy

As we navigate Walmart’s digital transformation journey, a SWOT analysis reveals key insights into its strengths, weaknesses, opportunities, and threats, guiding strategic decisions for sustained success in the dynamic retail industry that is operating in an increasingly digital economy.

SWOT Analysis of Walmart:

• Strong Brand Recognition: Walmart’s strength lies in its widely recognized and trusted brand, fostering consumer confidence and loyalty.
• Diverse Revenue Stream: The company’s adaptability is evident through a diverse revenue stream, navigating various markets and industries to maintain financial resilience. Per Walmart’s Q3 FY23 Earnings , a breakdown of walmart’s income can be recognised through its Sam’s Club membership sales (Up by 7.2%), Walmart U.S Comp Sales (Up 4.9%), Walmart U.S. eCommerce (up by 24%), and Walmart International sales (up by 5.4%). 
• Economies of Scale: Walmart leverages its extensive size for economies of scale shown by its strong revenue growth of 5.3% per 2022 and 2023 consolidated Income statement, enabling cost advantages in procurement, operations, and overall efficiency. 
• Strong Customer Base: With a vast and loyal customer base, Walmart establishes a robust foundation in the retail sector, emphasizing customer retention and sustained business growth as per market share stat of 60% shown on the Market retail/wholesale industry dominated by Walmart.

Weaknesses:

• Labor Relations: Walmart has faced criticism for labor practices, including low wages and labor disputes.
• E-commerce Competition: Despite significant strides, Walmart faces intense competition from e-commerce giants (e.g, amazon, eBay), impacting its online market share.
• Over Reliance on US Market: A substantial portion of Walmart’s revenue is generated in the United States, making it vulnerable to domestic economic fluctuations.
• Inconsistent customer service: represents a weakness in Walmart’s SWOT analysis, as variations in service quality across different locations may impact the overall customer experience, potentially leading to customer dissatisfaction and diminished brand perception.

Opportunities:

• E-commerce Expansion: Further growth in the online market allows Walmart to capitalize on changing consumer shopping habits.
• International Expansion: Targeting untapped markets presents opportunities for global revenue diversification.
• Health and Wellness Market: The growing trend towards health-conscious living provides avenues for expansion in the health and wellness sector. Increased understanding of customer journeys in these niches is key to begin to build stickiness effects.
• Technological Innovations: Embracing cutting-edge technologies can enhance customer experience and operational efficiency through a growing Omnichannel marketplace. It is vital to master data science and begin to leverage AI in the battle to understand consumer behaviors and deliver a remarkable experience.
• Competition: Intense competition from traditional retailers and e-commerce platforms poses a threat to Walmart’s market share such as Costco, Target and Amazon.
• Regulatory Challenges: Changes in regulations, especially related to labor and trade, can impact Walmart’s operations and costs. One such example is the metrics shown per Walmart’s ethics & compliance code of conduct aligning to regulatory challenges in culture, work safety, risk mitigation and more. 
• Economic Downturns: Economic uncertainties and recessions may lead to reduced consumer spending, affecting Walmart’s revenue.
• Supply Chain Disruptions: External factors like natural disasters or geopolitical events can disrupt the global supply chain, impacting product availability and costs. Such threats are specifically addressed by Walmart’s Enterprise Resilience Planning Team .

More on Walmart’s Online Competitors

Walmart faces formidable competition in the online retail arena, with key rivals such as Amazon and Target vying for a share of the digital market. Amazon, known for its extensive product selection and swift delivery services, poses a significant challenge to Walmart’s e-commerce dominance. Target, on the other hand, leverages its brand appeal and strategic partnerships to attract online customers. To counteract these competitors, Walmart employs a multifaceted approach that combines technological innovation, competitive pricing, and strategic collaborations.

Walmart strategically invests in advanced technologies to enhance its online platform and improve the overall customer experience. The integration of artificial intelligence (AI) and machine learning enables Walmart to provide personalized recommendations, similar to Amazon’s renowned recommendation engine. Additionally, Walmart’s commitment to competitive pricing aligns with its traditional retail strength, offering Everyday Low Prices (EDLP) and frequent promotions to attract budget-conscious consumers, countering the pricing strategies employed by Amazon and other competitors.

Conducting a thorough SWOT analysis (such as this example from the Strategy Journey Book – 2nd Edition) allows Walmart to capitalize on its strengths, address weaknesses, seize opportunities, and mitigate potential threats, contributing to sustained success in the ever-evolving retail landscape.

Walmart’s Digital Transformation Strategy in the new ERA of AI-led Customer Centricity 

Walmart’s online business strategy.

Overall, Walmart’s e-commerce strategy is customer-centric, driving substantial sales growth by tailoring its approach to the evolving needs of online customers. Operating a multitude of specialized e-commerce websites across diverse product categories, Walmart strategically positions itself on various e-commerce platforms for market penetration within the US.

Servicing Relevant Customer Journeys & Sustainable Transformation

Walmart’s evolving online strategy is characterized by a dual focus on extensive product offerings and technological sophistication, with concrete examples per its strategic partnership with Adobe in 2021 to integrate walmart’s marketplace, online and instore fulfillment and pickup technologies with Adobe commerce showcasing its commitment to a seamless customer experience. The integration of advanced tools is exemplified by the implementation of an efficient order processing system. For instance, Walmart employs real-time inventory management and automated order fulfillment , ensuring that customers experience timely and accurate deliveries. Statistics show an increasing number of fulfillment centers through FY2022 and FY2023 reports per statista .

Emerging predictive capabilities supported by Data Science and AI

In addition, the technological depth extends to personalized experiences, illustrated by Walmart’s robust recommendation engine. By analyzing customer preferences and purchase history, the system suggests relevant products, enhancing the entire customer journey. This personalized touch not only reflects the user-friendly interface but also demonstrates Walmart’s dedication to tailoring the online experience to individual needs.

Focus on seamless CX and UX to improve customer stickiness

Furthermore, Walmart’s commitment to a seamless online interaction is evident in its streamlined navigation features. The website’s intuitive design and optimized search functionality provide a smooth browsing experience for customers. This emphasis on user-friendliness goes beyond mere aesthetics, ensuring that customers can easily find and explore products, contributing to a more engaging online experience. Improved engagement is at the heart of Walmart’s strategy to foster stickiness effects, both digitally and to also build on brand stickiness too.

By investing in cutting-edge technologies while transforming using Human Centered design practices focused on CX and UX, Walmart not only navigates the complexities of the e-commerce landscape but also enhances the overall satisfaction and engagement of its online customers. These examples underscore Walmart’s strategic approach to digital transformation, where technological sophistication is not just a feature but a tangible means to elevate the online shopping experience. 

Walmart International Business

Successful international business expansion requires operating model transformation, and Walmart’s strategy is characterized by a blend of strategic acquisitions, partnerships, and a keen understanding of local markets. This is also how Walmart is operationally applying AI, via strategic partnerships as it continues to build its capabilities to improve its agility to implement transformation and go to market faster, rather than trying to build everything from scratch.

A Sustainable Diversification strategy that adapts to local markets  

Walmart’s international business expansion is a testament to its strategic approach in entering diverse markets and adapting to local nuances. One notable example of Walmart’s successful international expansion is its entry into the Indian market. In 2018, Walmart acquired a majority stake in Flipkart, one of India’s leading e-commerce platforms. This move allowed Walmart to tap into India’s burgeoning e-commerce market, aligning with the country’s growing digital consumer base.

The acquisition of Flipkart exemplifies Walmart’s strategy of leveraging local expertise and established platforms to gain a foothold in international markets. Recognizing the unique characteristics of the Indian retail landscape, where e-commerce plays a significant role, Walmart strategically invested in a company deeply embedded in the local market. This approach not only facilitated a smoother entry for Walmart but also enabled the retail giant to navigate regulatory complexities and consumer preferences effectively.

Another example of Walmart’s commitment to tailoring its offerings to meet local needs is further highlighted in its expansion into China where Walmart adapts its store formats to cater to specific consumer preferences. 

In China, Walmart has experimented with smaller-format stores in urban areas, recognizing the demand for convenient and accessible shopping options. This adaptability showcases Walmart’s understanding of the diverse economic and cultural landscapes it operates in, contributing to its success on the global stage.

Working with partners to diversify and build a sustainable business model 

Collaborations and strategic partnerships play a pivotal role in Walmart’s competitive strategy. In 2023, Walmart has outlined plans to invest heavily into AI automation fulfillment centers to improve its unit cost average by 20%, increasing efficiency in order fulfilments and operations. 

The acquisition of Jet.com in 2016 expanded Walmart’s digital footprint and brought innovative talent into the company. Furthermore, Walmart’s partnerships with various brands (such as Adobe, ShipBob) and retailers enable it to diversify its product offerings, providing a competitive edge against the more specialized approaches of some competitors. As part of Walmart’s strategy in marketing, Walmart has announced partnerships with social media giants such as TikTok, Snapchat, Firework and more further boosting its online digital footprint. 

The acquisition of Jet.com in 2016 not only expanded Walmart’s digital footprint but it brought innovative talent into the company. It is clear Walmart sees the need for talent as key to its continued efforts to apply human centered design as part of its digital transformation strategy.

By continuously adapting and evolving its strategies, Walmart is clearly implementing digital transformation sustainably, to support its future operating model as Walmart remains a formidable force in the online retail landscape, navigating the challenges presented by its competitors.

In conclusion, Walmart’s business strategy is that of an growing Omnichannel marketplace, a multifaceted approach that combines physical and digital retail, competitive pricing, supply chain excellence, and a commitment to customer satisfaction. Understanding these elements provides insights into the retail giant’s enduring success in a rapid changing and competitive digital economy as it continues to combat emerging new business disruptions.

Q1: How did Walmart become a retail giant?

Walmart’s ascent to retail dominance can be attributed to a combination of strategic pricing, operational efficiency, and a customer-centric approach. 

Q2: What sets Walmart’s supply chain apart?

Walmart’s supply chain is marked by innovation and technological integration, allowing the company to streamline operations and stay ahead in a competitive market.

Q3: How does Walmart balance physical and digital retail?

Walmart seamlessly integrates its brick-and-mortar stores with its online presence, offering customers a comprehensive shopping experience.

Q4: What is Walmart’s philosophy on pricing?

Walmart’s commitment to everyday low prices is a fundamental philosophy that underpins its strategy, ensuring affordability for consumers.

Q5: How has Walmart expanded globally?

Walmart’s global expansion involves adapting its strategy to diverse markets, understanding local dynamics, and leveraging its core strengths.

About the author

Julie Choo is lead author of THE STRATEGY JOURNEY book and the founder of STRATABILITY ACADEMY. She speaks regularly at numerous tech, careers and entrepreneur events globally. Julie continues to consult at large Fortune 500 companies, Global Banks and tech start-ups. As a lover of all things strategic, she is a keen Formula One fan who named her dog, Kimi (after Raikkonnen), and follows football - favourite club changes based on where she calls home.

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How Customer-Centricity Drives a Reimagined Multichannel Shopping Experience

New experience results in a 98 percent increase in mobile orders.

In a growing, yet underdeveloped ecommerce landscape, Walmart Canada is leading a retail transformation. A transformation that is truly customer-first in its approach to all things digital. With great pride, we partnered with Walmart to develop the experience across all touchpoints, including a recently launched mobile app that is available on both iOS and Android.

The Imperative for Change

We took the philosophy that customers want to browse and shop anywhere, anytime to heart. So we created a responsive site that fluidly adapts to any device. The new walmart.ca incorporated best of breed technologies, modular architecture and consumer-driven insights that resulted in a seamless, consistent experience from desktop, tablet or mobile device.

The Transformative Solution 

Staying true to Walmart’s brand promise of helping customers live better lives while saving time and money, a new grocery service was integrated into an existing responsive experience. Designs that were developed and tested with buyers resulted in a customer-centric experience that includes features such as:

• A real-time slot booking engine for grocery pickup
• A fixed grocery-list style shopping cart
• The ability to save customers' carts across devices and channels

Let’s face it, some customers are in a rush and don’t have time to wander aisles. We branded innovative Grab & Go lockers that are located in select Walmart stores, 7-Eleven locations and Canada Post retail outlets. After customers place their order online, a Walmart Associate fills the order and places it in a locker. Once filled, the customer is sent a 6-digit code to access their locker.

The Business Impact

We’re #1. Walmart.ca is Canada’s first responsively designed ecommerce site for a big box retailer. In 2016, we saw incredible year-over-year growth. The numbers speak for themselves.  

“Canadians count on Walmart to save them money, both in stores and online. We’re delivering on that promise, allowing them to shop anytime, anywhere with Walmart.ca and the Walmart Canada Online Shopping app.” Matt Ginsberg , Senior Director Ecommerce Technology and Product Management, Walmart Canada

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Retail Digital Transformation Trends: Salesforce and Walmart

Table of contents.

“Retailing is all about the art of getting the customer to pay full price and still leave happy.” – SAM WARLTON, CEO of Walmart

Evolution of the Retail Industry

Retail industry history to present day.

From the bartering system of ancient Mesopotamia in 6000 BC to the instant digital transactions and gratification of online shopping, the retail industry tends to lead the way for digital transformation trends. Money became the driving force in commerce transformation with the introduction of currency around 5,000 years ago with the Mesopotamian people. Unlike the restricted healthcare and government industries, the retail industry keeps up with competition through the digital transformation without the burdens and delays of bureaucracy, heightened security, and red tape.

As economies grew and societies developed, so did the retail industry. Brick-and-mortar stores emerged as a popular shopping destination, with department stores leading the charge. These large-scale establishments offered customers a wide variety of products under one roof, making it convenient for them to shop. But now, even brick-and-mortar stores find themselves outdated under the convenience of technological advancements, virtual dressing rooms, and instant deliveries with a click of a mouse.  

Over time, technology played a significant role in transforming the retail landscape.

Relevant Read: Digital Transformation: How Technology is Changing Business

                                                                                           Source: EY

Retailers are now expected to provide seamless omnichannel experiences that integrate both online and offline shopping methods. The influx of technology impacts supply chains, business transactions, consumer behaviors, marketing strategies, and more. Retailers face an urgent need to transform their tech architecture and operating model to stay competitive in the market. According to a recent UBS report , 80,000 retail stores will close in the United States by 2026.

  Source: McKinsey

Furthermore, retailers have also started investing in data analytics tools to gain insights into customer behavior patterns and preferences. By leveraging these tools, they can offer personalized recommendations and targeted promotions to improve customer engagement and loyalty. Additionally, contactless payment options have become more prevalent due to the ongoing COVID-19 pandemic , encouraging retailers to adopt new payment technologies like QR codes or mobile wallets. According to McKinsey , during the pandemic, China saw a 30 percent decline in grocery transactions but a 69 percent increase in average transaction value.

As we look ahead at the future digital evolution of the retail industry, many exciting opportunities lie ahead for forward-thinking companies that embrace innovation wholeheartedly. With emerging technologies like virtual reality (VR) , augmented reality (AR) , and artificial intelligence (AI) becoming increasingly mainstream, there is no limit to what creative minds can achieve when combining them with their existing business models.

Source: https://nerdynav.com/chatgpt-statistics/

With the generous addition of open-source APIs, like the public launch of ChatGPT in November 2022, the digital industry has seen an exponential acceleration in advancements that will have an effect on the retail industry. To put things into perspective, the timeframe to the first 1 million users for ChatGPT was done in a fraction of the time of past digital advancements that changed businesses globally.

Source: The Digital Transformation People

In 2021, industry expert Ming-Chi Kuo predicted that Apple would replace the iPhone with an augmented reality device by 2032. The possibilities are endless!

The Age of Digital Transformation

The world is currently experiencing a period of profound change driven by the rapid advancement of digital technology. This new era, ‘ The Age of Digital Transformation , ’ refers to how businesses adapt to technological advances. In today’s globalized economy, companies must be able to adapt quickly to new technologies if they want to remain competitive. Amidst the current wave of technological advancements, digital transformation (DT) has become a buzzword in various industries.

Relevant read: The future in the age of digital transformation .

What is Digital Transformation?

Digital Transformation (DT) refers to implementing technology-driven strategies to improve business processes and operations. In simpler terms, it is about leveraging new technologies such as cloud computing, artificial intelligence, and big data analytics, among others, to drive innovation and achieve better outcomes.

Digital transformation represents more than just an upgrade in technology; it requires fundamental organizational structure, processes, and culture changes. Companies that do not embrace this shift risk being left behind as their competitors innovate and accelerate ahead. Embracing digital transformation brings significant benefits such as increased efficiency, improved customer experience, and even access to entirely new markets.

To understand the significance of Digital Transformation in today’s world, consider this anecdote:

Over a decade ago, Blockbuster filed for bankruptcy in 2010 with almost $1 billion in debt due to its inability to adapt to the changing market trends. The emergence of online streaming platforms like Netflix posed a significant threat to their traditional model of renting DVDs through stores. Dish Network bought its remaining 1,700 stores the next year, and by 2014, the last of its 300 company-owned stores were closed. Netflix created a better business model . Redbox kiosks and the whole digital phenomenon eliminated the need for consumers to make a separate trip to a DVD store.  

Netflix listened to the market’s desire for convenience. Millennials evolved to need instant gratification thanks to other digital advancements like mobile phones. Catering to their needs and wants, Netflix capitalized on what was to become the top consumer generation of 2020. As a result, Blockbuster failed to keep up with customer expectations and eventually lost relevance in the industry. This story highlights how businesses that fail to embrace digital change risk becoming obsolete over time.

As we move forward into an increasingly digitized future, embracing Digital transformation improves longevity, scalability, and desirability for organizations hoping to remain competitive and relevant in their respective markets. Software companies are leading the way in adopting these changes while paving the path for other industries looking to embark on similar journeys toward success.

Real-life Examples of Software Companies Undergoing Large DT Initiatives [H3]

• Microsoft: The company’s CEO Satya Nadella made it his mission to transform Microsoft into a “mobile-first, cloud-first” company. This involved reorganizing the company’s structure, investing heavily in AI and cloud technology, and partnering with other industry players, such as Adobe, to offer more comprehensive solutions for customers.

Relevant Read: Apty’s Strategic Partnership with MS Dynamics

• LeewayHertz :  They provide insights on digital transformation and how it can be achieved. Additionally, they offer services such as machine learning, artificial intelligence, virtual reality app development, and more. Listed as one of the top digital transformation companies and consulting firms in 2023 suggests that LeewayHertz maintains relevance and dedication to large digital transformation initiatives propelling them to the top of enterprises’ lists for companies to work within 20233.
• Adobe Systems Inc : Transformed from selling boxed software to a cloud-based subscription service provider making their product more accessible. Adobe no longer sells or distributes boxed software; its programs are only available via subscription. The transformation was described as radical and remarkable, and Adobe now claims to be a cloud powerhouse serving other Fortune 500 companies. The company’s Creative Cloud is a way to sell its software as a subscription service, but it also entered the CRM space in recent years. Although newcomers, they already find themselves at the top of reviews and feature lists, competing with industry strongholds like Salesforce .

Also Read: 5 AI Trends that Are Changing the Face of Retail

However, implementing digital transformation is not without its challenges. It requires significant investments in infrastructure, talent acquisition, and training, and change management processes… The list goes on. Nonetheless, businesses that successfully implement digital transformation reap significant benefits , including increased efficiency and productivity.

Implement digital transformation reap significant benefits , including increased efficiency and productivity.

Implementation Strategy for Digital Transformation

As technology continues to evolve, companies must adapt and implement new strategies to stay competitive in their respective industries. A well-thought-out implementation strategy for digital transformation ensures a successful shift toward a more efficient and effective organization that can leverage technology to drive growth.

1. Achieving company clarity: Identifying areas where technology can improve operational efficiency, enhance customer experience, or create new revenue streams.

2. Develop a roadmap: Once these areas have been identified, outline how the technology will be implemented across the organization’s users, software applications, and/or departments.

3. Change management : Change management plays a critical role in ensuring successful digital adoption. Employees must be trained on new technologies and processes to perform their roles effectively.

4. Communication : Resistance to change is common when implementing new technology. , Communication throughout the digital transformation process ensure s everyone understands the when, where, and why around the change(s) made and what benefits they bring to the company, team, and their personal role.

5. Collaboration: Involving stakeholders, subject matter experts (SMEs), and different departments helps address the pertinent goals that meet company objectives and initiatives. Collaboration between IT teams and business leaders is vital during the planning phase of digital transformation initiatives. Business leaders must provide insights into their operations, while IT teams bring expertise around technical capabilities. Collaboration ensures alignment between technological solutions and organizational goals leading toward achieving desired outcomes.

It is important to note that organizations should remain agile throughout the process because digital transformation projects are not one-time events but rather continuous improvement efforts requiring ongoing maintenance and attention over time. McKinsey & Company identifies ten traps that derail digital transformation.

History of Walmart

Sam Walton founded Walmart  in Rogers, Arkansas, in 1962. The original name of Walmart was  “ Walton’s Five and Dime .” The first store opened on July 2, 1962, and the company officially incorporated Wal-Mart Stores, Inc. that same year. Walmart initially focused its growth in rural areas to avoid direct competition with other retailers. By 1968, the Walton family owned 24 stores and had achieved $12.7 million in sales.

Source: Zippia

Walmart is no stranger to business and digital transformations . As the world’s largest retailer, Walmart drives innovation past and present. In recent years, Walmart aimed to transform digitally, bringing innovations that save its customers time and money, and change how work is carried out inside the company. Walmart offers technologies and capabilities to help other businesses navigate their own digital transformation. They implemented several innovative technologies, such as a tech platform that uses automation and machine learning to turn data into usable insights . The company also upgraded its mobile capabilities and added lists, returns, robots, associates, and automation to its digital transformation efforts in retail. Walmart continues leveraging technology such as machine learning, cloud-powered checkout, and pickup capabilities to offer their customers and vendors more convenience to stay competitive. Additionally, the company uses drones and autonomous vehicles for deliveries and added automated micro-fulfillment to dozens of stores. Finally, workers at Walmart stores in the United States use augmented reality on their devices to read the labels of boxes tucked away in warehouses.

“There is only one boss. The customer. And he can fire anybody in the company from the chairman on down, simply by spending his money somewhere else.” – Sam Walton

 Source: Freepick

In today’s fast-paced business world, keeping track of customer interactions and managing sales activities can be daunting. That’s where Salesforce comes into play. This powerful CRM platform, an order-to-cash solution, revolutionized business operations by streamlining processes, boosting productivity, and enhancing customer relations. Whether a small startup or a large enterprise, Salesforce offers various tools and features to help you manage your sales pipeline effectively. Salesforce established itself as a top enterprise software suite that operates as a CRM and ERP system across multiple cloud-based platforms. Salesforce provides a Platform-as-a-Service (PaaS) offering consultant services for its customers to establish operational activities in the cloud environment. Founded in 1999 by Marc Benioff and Parker Harris, it became the largest CRM platform in the world. Many corporations worldwide utilize it to organize business-related information, including sales records, market research data, report categorization, and other relevant content management aspects needed for optimal performance.

Source: Salesforce

Source: Thompson Data

The company’s CEO Marc Benioff acts as a huge proponent of Salesforce and takes great steps toward scaling the company. Salesforce has been named the #1 CRM provider for consecutive years, still topping the ranks in its ninth year in 2022. It also ranked #1 in CRM market share by International Data Corporation (IDC) for eight consecutive years . These rankings demonstrate Salesforce’s continued success and leadership in the CRM industry. Salesforce stands out from other CRM providers as it garnered early traction as they continued to push the digital envelope to provide a bird’s eye view of the sales pipeline to help gauge and determine sales opportunities and allow businesses to leverage customer information to increase sales.

Before we dive into the big Walmart/Salesforce announcement this year, let’s review the Salesforce features. It’s no wonder the two joined forces to create the ultimate end-user experience.

Learn more about Salesforce: How can You Maximize Salesforce ROI ?

Benefits of Salesforce

1. Efficient User Management: Salesforce allows users to easily manage channel users, company teams & external contacts via user profiles. Salesforce can synchronize user profiles with essential apps to create a single platform. Salesforce administrators can customize URLs using the ‘MyDomain’ feature. It helps to brand the URLs and make them consistent with the business’s logos, images, and other marketing materials.

2. Automation: Salesforce allows business owners to automate and standardize important processes. Salesforce offers many options for workflow automation, including pre-set rules and graphical procedures that it customizes to fit your needs. Automating simple tasks allows sales teams to work more efficiently and save time and money.

3. Existing AppExchange Tools: Salesforce’s AppExchange has many tools that you can use to improve what Salesforce can do. It’s a marketplace of thousands of useful applications. AppExchange apps are special tools that help manage your business processes, workflows, and customer relationships. They have unique features that businesses of all sizes use to implement comprehensive solutions quickly.

4. Customer Insights: Salesforce’s machine-learning intelligence engine gives businesses real-time customer insights. A company can learn much from its customers with the Customer Relationship Platform. It helps analyze customer behavior, measure satisfaction, and predict opportunities.

5. Mobile Access: Salesforce’s mobile feature lets you stay updated on customer information wherever you are. It makes sure all data is always current. Salesforce has a mobile platform with solid cloud tools. Users can create their apps to fit their needs. Users can access information and reports and take critical action anywhere, anytime. Salesforce’s platform is excellent for building and deploying mobile apps. It’s #1 for businesses.

Source: Salesforceben

Latest Salesforce initiatives 

• https://www.salesforce.com/news/
• Lightning Order Management 
• AppExchange (originally introduced in 2005
• Salesforce for Retail
• “ Jen’s Top Spring ’23 Release Features for Admins and Users ”
• “ 22 New Salesforce Features Everyone Should Know ” by SalesforceBen
• New Salesforce for Retail Innovations Help Personalize Every Shopping Moment
• Salesforce Gets into Retail Media (2023)

Salesforce and Walmart’s Partnership Announcement 

Walmart Commerce Technologies and Salesforce recently announced an industry-shaking partnership that will completely transform how shoppers interact with the retail giant. The partnership will allow retailers to use Walmart’s GoLocal delivery service, which drops off purchases at customers’ doors, and Store Assist. This Walmart app helps users manage and track orders and speed up the handing over of online orders to customers or delivery drivers.

Retailers can leverage the same innovative and scalable technologies that power Walmart’s omnichannel capabilities, drive efficiency, and ensure that every purchase quickly gets into the hands of the shopper – no matter where they are. The partnership will enable personalized and accessible commerce experiences with real-time order visibility and reliable local pickup and delivery. Retailers who use Salesforce’s e-commerce platforms to host and manage their websites will be able to avail of Walmart’s GoLocal and Store Assist services to provide faster order pickups and same or next-day deliveries to online customers.

They developed a new and helpful digital experience for e-commerce retailers who want to drive efficiency and profitability across all channels. The two companies have allied to improve customer experience, expand digital capabilities, and strengthen data and analytics. This partnership will enable Walmart to gain access to Salesforce’s customer relationship management (CRM) platform to understand customer preferences and trends better.

What specific services will Salesforce and Walmart offer together?

As a result of the Salesforce and Walmart partnership, retailers will receive technologies and services that will enhance their e-commerce capabilities.

• Walmart GoLocal is a service that provides same-day delivery for businesses of all sizes.
• Walmart Commerce Technologies Store Assist is a service that helps optimize in-store fulfillment and is available to Salesforce clients. It is available through Salesforce (CRM) AppExchange .
• Enable Buy Online and Pick Up In-Store (BOPIS) : Walmart Commerce Technologies’ Store Assist enables Buy Online and Pick Up In-Store, leveraging local stores as fulfillment centers for efficient order picking and seamless handoff experiences to customers or delivery drivers.
• Manage Local Deliveries : Walmart GoLocal offers scalable local delivery solutions, ensuring reliable same-day delivery under a white-label experience. Retailers can maintain their brand’s customer experience while utilizing Walmart’s delivery infrastructure.
• Drive Efficiency and Profitability Across the Omnichannel Shopping Journey : Walmart’s Commerce Cloud and Order Management help retailers streamline and enhance the omnichannel shopping journey. The platform integrates AI and real-time data to provide connected, personalized customer experiences while managing their shopping experience across various channels.

The partnership will also offer last-mile delivery services to customers. Walmart’s scalable technologies like machine learning, cloud-powered checkout and pickup capabilities, robotics, big data, and artificial intelligence will be available to retailers through the partnership with Salesforce.

What does this partnership mean?

This partnership will help Walmart access Salesforce’s leading cloud-based technology, enabling them to optimize their operations and customer experiences. For Salesforce, the partnership provides a platform to expand its customer base and reach more customers. It promises to revolutionize the retail industry and will undoubtedly have a lasting impact. This partnership gives smaller retailers a competitive edge and the ability to gain access to in-house delivery solutions they otherwise could not afford. With options like seamless online experiences, streamlined fulfillment options, and omnichannel solutions, Salesforce and Walmart changed the retailer game.

“With the combined power of Walmart and Salesforce, retailers can drive success with best-in-class technology to advance their omnichannel capabilities, drive efficiency, and ensure that every purchase quickly gets into the hands of the shopper – no matter where they are.” – ROB GARF, VP AND GM OF RETAIL, SALESFORCE

By combining the strengths of both companies, retailers can enhance their omnichannel capabilities, optimize operational efficiency, and ensure fast delivery of purchases to customers regardless of location. The partnership aims to provide retailers with best-in-class solutions to meet the retail industry’s evolving demands and deliver customers a seamless shopping experience.

Salesforce CEO Marc Benioff said that this partnership is part of his company’s goal to drive efficiency and profitability across the omnichannel shopping journey.

Salesforce and Walmart could significantly disrupt the retail industry and increase competition.

Although Walmart has a reputation for putting local retailers out of business, the partnership with Salesforce could give smaller retailers a significant advantage. Walmart’s entry into the cloud wars with a series of SaaS-based retail and commerce solutions will inevitably compete with Microsoft, Salesforce, Oracle, and SAP offerings.

What should Salesforce and Walmart competitors learn?

Salesforce and Walmart are two significant industry players – cloud computing and retail. With their strong brand presence, extensive customer base, and advanced technology, they have dominated the market for years. However, their competitors must pay attention to them and must stay vigilant to compete effectively. Salesforce has pioneered cloud computing with its advanced software solutions for customer relationship management (CRM). Its products have been widely adopted by businesses of all sizes, from startups to large enterprises. The company has consistently invested in R&D and acquired new technologies to enhance its offerings further. It has given Salesforce an edge over its innovation and product development competitors. As a result, Salesforce’s competitors must keep pace with its advancements and constantly improve their products to stay relevant.

Similarly, Walmart’s dominance in the retail industry is undisputed. The company’s massive scale and efficient supply chain have helped it offer products at low prices while still maintaining quality. Walmart’s recent investments in e-commerce have also given it an edge in the digital space. Its acquisition of Jet.com and partnerships with Google and other tech giants have made it a formidable player in online retail. Competitors must keep a close eye on Walmart’s strategies and adapt accordingly.

Salesforce and Walmart have also invested heavily in AI and machine learning technologies. Salesforce’s Einstein AI platform has been integrated into its CRM software to provide predictive analytics and personalized recommendations. Walmart has been using AI to optimize its supply chain and improve customer experience. These investments will likely give them an even more significant advantage over their competitors in the future.

The success of Salesforce and Walmart can be attributed to their constant innovation and investment in new technologies. Their competitors cannot afford to ignore these giants in their industries and must stay vigilant to keep up with their advancements. By doing so, they can compete more effectively and offer innovative solutions to their customers.

How this partnership impacted Salesforce and Walmart investors

This partnership announcement, meant to act as a retail industry disruptor, weighed little on stock prices for Walmart but inspired investors in both companies.

Since the announcement, Walmart’s stock has remained stagnant in comparison to Salesforce’s astonishing rise.

Many investors of Salesforce have watched their stock prices increase since the partnership announcement. As the company takes new steps into the retail industry, this will open up more growth opportunities and efficient services for its customer base.  Although “Wall Street isn’t sold on the concept as a money maker yet,” we wait to see the effect on the retail industry as a whole.

Since around 2014, Salesforce dug into the retail industry and continues to drive change. Their marketing efforts clearly show a positive impact and maybe a learning experience for Walmart. Tech-savvy giants like Salesforce find these tech announcements beneficial due to their agile structure, while Walmart battles the logistics of brick-and-mortar constraints and overhead. Other factors like change management , digital adoption , and subject matter experts may be a factor in their opposing stock prices.

By leveraging their collective resources and expertise, these two companies aim to continue their digital disruption to make an impact on others and their revenue stream.

How to Optimize Salesforce for Retail

Clearly Salesforce is doing something right. Luckily, their API allows for helpful and beneficial SaaS application solutions to plug in, sit on top, or integrate directly into their modules.

Salesforce is a powerful tool that can help retailers manage customer relationships, improve sales processes, and increase revenue. However, implementing and updating Salesforce can be a complex and time-consuming process.

Digital Adoption Platform (DAP) has become an increasingly popular solution for retailers looking to streamline their Salesforce implementation process.

Read More: DAP for Salesforce

1. DAP as a solution to help retailers implement Salesforce

Implementing Salesforce can be a daunting task, especially for retailers who may need more technical expertise or resources to do so. It is where Digital Adoption Platforms (DAP) come in handy. A DAP provides step-by-step guidance and interactive support to help retailers seamlessly implement Salesforce into their workflow.

By using a DAP, retailers can reduce the time it takes to implement Salesforce while increasing efficiency and accuracy. The platform offers customized training modules to equip employees with the knowledge and skills to navigate Salesforce confidently. Additionally, the platform provides real-time feedback and analytics that allow retailers to track progress and identify improvement areas.

Overall, using a DAP as a solution for implementing Salesforce reduces costs, minimizes errors, and accelerates the adoption of new technology. It empowers retailers to maximize their investment in Salesforce while freeing up valuable time for other essential tasks.

Read more: Guide to Salesforce Implementation

2. DAP as a Solution to Update Salesforce

One of the retailers’ biggest challenges is keeping up with the constant updates and changes to Salesforce. As new updates are released, ensuring that all employees are trained on how to use the new features effectively can be challenging.

DAPs effectively allow retailers to update the Salesforce without disrupting their workflow. With DAPs, employees can quickly learn about and adapt to new features, making it easier to take advantage of all Salesforce offers. Instead of spending valuable time figuring out how new features work, DAPs allow employees to learn in real time and improve their productivity.

3. DAP as a Solution to Onboard Salesforce

Onboarding new employees can be a challenging task for any organization, and the process is even more complex when onboarding new Salesforce users. However, with the help of a Digital Adoption Platform (DAP) , onboarding can become a streamlined and efficient process.

A DAP can help retailers onboard employees by providing personalized and interactive training modules that offer step-by-step guidance through common workflows in Salesforce. By utilizing DAPs, retailers can reduce the time and resources associated with traditional training methods while ensuring that new hires are confident in their knowledge of Salesforce features and can quickly become productive team members.

Moreover, DAPs provide valuable insights into employee performance during onboarding, allowing retailers to identify areas where additional assistance or training may be required. By helping organizations track employee progress, DAPs ensure new hires receive the support they need to ramp up quickly without sacrificing quality.

In conclusion, by leveraging Digital Adoption Platforms to onboard Salesforce users, retailers can save time and resources and ensure their employees are confident in using Salesforce features. With personalized training modules and performance insights available at their fingertips, employee productivity and overall company success increase.

Salesforce and Walmart Partnership Takeaways

In the last few years, Salesforce and Walmart have transformed their businesses digitally. It’s like a butterfly effect, where small changes have led to more extensive transformations in various aspects of their businesses. The wingspan of this butterfly is vast, as it has touched everything from customer experience to supply chain management.

To understand how this transformation happened, let’s look at some key drivers that enabled these companies to move forward.

• Both organizations invested heavily in technology infrastructure and talent development. This investment allowed them to build robust systems for data analysis, automation, and machine learning algorithms.
• They prioritized collaboration with external partners and customers alike. By working together, they created innovative solutions that addressed specific pain points in the market. For example, Walmart partnered with Google Assistant to enable voice-based shopping experiences for its consumers.
• Both companies recognized the importance of building agile teams that could adapt quickly to changing environments. They created cross-functional teams, including marketing, sales, IT operations, and logistics experts.

All these efforts resulted in a successful digital transformation process that helped them streamline their operations while significantly improving customer satisfaction.

For Salesforce, its cloud-based CRM platform allows businesses to streamline operations, increase productivity, and improve customer experience. Its AI-powered tools enable personalized marketing campaigns and predictive analytics that help businesses make data-driven decisions. With Salesforce’s solutions, companies can automate routine tasks and focus on building customer relationships while driving revenue growth.

Software adoption platforms help further successful digital transformation initiatives by focusing on the people and correcting behaviors with the software to enforce appropriate business processes and improve data integrity. While enterprise platforms like Salesforce help improve sales teams’ processes through the use of software, digital adoption platforms (DAPs) help people use Salesforce more effectively. Together they work better to achieve digital adoption and transformations faster. With the latest Salesforce releases and continuous updates, Chief Learning Officers like Christopher Lind of ChenMed emphasize that DAP tools have become the cornerstone of our tech stacks.

Walmart’s digital transformation focuses on leveraging technology to enhance the shopping experience for its customers. Through investments in online shopping platforms like Walmart.com and grocery delivery services such as Instacart, Walmart has made it easier than ever for consumers to shop from the comfort of their homes. Additionally, Walmart’s use of big data analytics helps it optimize inventory management across its stores, ensuring that products are always available when customers need them.

Both Salesforce and Walmart understand that digital transformation is crucial for staying competitive in today’s fast-paced business environment. By embracing new technologies and adapting to changing consumer preferences, these companies are positioning themselves for long-term success.

Ultimately, the impact of digital transformation extends beyond any single company or industry; it represents a fundamental shift in how we do business in the 21st century. As more organizations adopt new technologies and embrace innovation, we expect continued healthcare, transportation, and education advancements. In each case, efficiency, convenience, and accessibility are improved.

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With a huge number of innovative startups disrupting every industry, established organizations faced a choice: adapt to the changing market conditions or to be left behind, stuck in legacy software and outdated business strategies. However, adjusting your business processes to emerging requirements is not an easy task, especially for global enterprise-level organizations. In addition to that, the cost of such a transformation might come to billions of dollars. Yet, the price for failure to keep up with the competition is even higher. It might cost you customers, revenue, and even the market share you will lose to those who do better at serving customer needs. If you are considering digital transformation for your business, better learn from the best. As a part of our new series of articles, we’ll look at the digital transformation success stories across industries . In this first article, we will focus on Retail & eCommerce .

Innovations in Retail: Key Strategies and Trends

Retail is probably one of the most digitized industries, imposing additional obligations and setting the bar high for newcomers and established market players alike.  IDC predicts that by 2020 at least 55 percent of all organizations will go digital, transforming markets and industries with the appearance of new concepts both in business and technology. With the staggering growth in eCommerce and mCommerce, increased focus on the consumer, and advanced automation capabilities, some retail brands have already reimagined their operations to keep up with the challenge. Among the key elements of their digitization strategies are:

Omnichannel shopping experience

While mobile application development and online presence are surely very important for a modern retailer, only by seamlessly integrating all shopping channels can you open the full potential of your business.

Read more about how to build an omnichannel strategy in a separate post.

Optimized user journeys

Digital businesses always put the customer first. Thus, most retailers are currently using data analytics to gain actionable insights about their customers’ behavior and preferences. This allows them to tailor their offerings accordingly and provide personalized experiences.

In-store digitization

Beacons, connected IoT devices, and smart digital hubs/stations allow for better customer engagement and rich in-store experiences. The technologies offer a wide array of opportunities: from indoor navigation, contextual promotions distribution, and customer self-service.

Advanced payments options

By adopting innovative payment methods, retail brands move fast toward the digital future. From Apple Pay to Tesco payments , consumers will soon be switching from cashless to cardless, so businesses should be able to keep up.

Digitized customer service

The growing adoption of artificial intelligence and the massive popularity of chat apps unlocks opportunities to automate a number of routine business processes, such as customer support. Using a smart bot to handle most of the typical issues, like answering standard questions or handling returns, retail companies are able to reduce staff, while improving efficiency and customer satisfaction.

Warehouse operations

Digital solutions can be used to efficiently manage your inventory and supply chain. By offering mobile capabilities and enabling bring-your-own-device (BYOD) policies, you improve staff agility and performance. Now, let’s take a closer look at the real-life implementation of the listed aspects of digital transformation in retail.

Target: Capitalizing on Personalization and Customer Loyalty

The second largest retailer in the United States, Target kicked off its digital transformation initiatives back in 2014 and has so far been able to achieve some outstanding results. Implementing one of the most significant means of digitization, the company used Beacon technologies across 50 US stores. Being able to track the customer’s indoor location, the Bluetooth-enabled devices send out personalized recommendations and timely alerts on nearby deals, keeping the users engaged while in the store. Additionally, shoppers can easily spot the items from their shopping lists using in-store navigation. Data and analytics are considered one of the company’s major priorities. With over 27 million users, its Target app is not only one of the most powerful weapons in the company’s digital arsenal, but also a rich source of insights on user preferences, behavior trends, and shopping habits. Moreover, Target has launched its mobile payments system in 2018.

Sephora: Blending the Digital and Physical Shopping Experiences

Sephora’s winning digital strategy relies on the brand’s customer-centric nature and its ability to perfectly blend digital and physical shopping experiences. Its first digitally enabled store, which opened in October 2015 in Paris, offers all perks of online shopping, plus allows for hands-on experimentation, like sampling the products, watching tutorials, and participating in beauty workshops. Using personal NFC cards, the customers can add actual products to their digital shopping cart while at the store and add more products online later. The items in the shopping cart will be handled as a single order. With the help of augmented reality, Sephora allows the customers to “try on” their products. Namely, the company has built a virtual “Visual Artist” tool. After uploading your photo through Facebook Messenger, this smart chatbot will help you visualize different makeup styles and products, provide personalized suggestions, and offer some items you might want to purchase. Another similar tool acts as an augmented reality mirror that simulates makeup on the user’s face in real-time.

IKEA: The Virtual Experience of Designing Your Home’s Interior

Think of furnishing a home and IKEA will likely come to mind. IKEA has heightened user experience with the help of a mobile application utilizing augmented reality (AR). IKEA Place, available on Android and iOS , is basically an app that allows you to fit pieces of furniture in your house, using AR via a smartphone’s camera. However, utilization of augmented reality is not the only thing that will help IKEA reach its clients. It has launched an idea hub called Space10, a research and design lab aimed at creating smart products and solutions. Space10 can be considered a crowd-sourcing platform for IKEA, as it uses a collaborative approach to creating new designs. Further, it can be used as a basis for a future IKEA product, heating up customer engagement. The platform also offers a mobile application , which utilizes augmented reality technology in addition to helping users view the developed product. One of the most noteworthy projects at Space10 is the announcement of IKEA’s self-driving cars. The concept presented by Space10 includes various autonomous car designs that put cafes, offices, etc., on wheels. IKEA is also going to utilize the concept to create an IKEA shop on wheels. The plan will use autonomous vehicles to create moving showcase rooms. A customer will be able to order a car that will contain requested furniture laid out in the interior design. That way, customers will experience the actual furnishings that they can try out before they buy. The project, which has just started, as yet has no live prototypes of the electricity-propelled, self-driving vehicles. But you can check the vehicle designs in IKEA’s Spaces on Wheels app.

Starbucks: Building a Full-Fledged Digital Ecosystem

Starbucks has one of the most successful digital transformation cases in food-and-drinks retail. This coffee shop chain has launched its “internal venture capital-style incubator for digital technology,” Starbucks Digital Ventures, back in 2009. One of its first products, its mobile application, became an integral part of the Starbucks digital ecosystem. The company uses its mobile platform as a powerful tool to attract more customers, build strong brand loyalty, and increase overall revenue. The app provides a convenient digital loyalty system, which allows the customers to earn and redeem their loyalty points (“Stars”) right within the app. By eliminating old-fashioned membership cards and phone-number verification process, this digital loyalty program turned out to be a huge success, currently used by over 12 million customers in the US. Another major innovation introduced by Starbucks as part of the company’s digitization is its Mobile Order & Pay (MOP) feature. This means that customers can order their drinks in advance, pay directly within the app, and pick up their orders at the store. The benefits of such a system are obvious: It eliminates waiting, provides a convenient and secure payment option, and increases the store’s through-put by reallocating labor from the register. As a result, 6 million orders and transactions are served by the MOP every month. Pushing forward its digital payment initiatives, the company is planning to launch its Starbucks Rewards Prepaid Card with Chase Bank.

Amazon: New Shopping Experience with Cashierless Stores

Amazon is a commercial giant that has quickly become a leading technology company with its cloud services and its own app store. While eCommerce and mCommerce are considered the future, Amazon has implemented an advanced option for shopping in traditional brick-and-mortar stores. Amazon GO has thirteen stores in New York, Seattle, Chicago, and San Francisco. What is special about those stores is that there is no need to pay for the purchased items in the store. The new store concept is part of the Just Walk Out Experience , because – with the app - that’s all you do to purchase something. After downloading Amazon GO app, customers connect their Amazon accounts. Using computer vision, sensor fusion, and deep learning algorithms (a subset of machine learning ), in-store devices indicate which items were purchased by a customer. After customers leave the Amazon GO store, the Amazon account connected with the checked application is charged for the purchase. You can watch the Amazon GO introduction video to see how it works. Recode estimates $1.5 million yearly revenue for the existing Amazon stores. The concept of cashierless stores bound with cardless payments seems to be a winner, due to the speed of in-store operations.

Walmart: Leading Data-backed Innovation in Retail

Having first introduced its eCommerce platform, Walmart Marketplace , back in 2009, the retail titan has been growing its digital potential ever since. Its tech division, @WalmartLabs, has launched a number of innovative products, including the Walmart mobile apps, its next-generation search engine, Shopycat (a Facebook app that provides tailored gift suggestions), and Goodies (subscription-based gourmet food delivery, which was closed after a year in Beta). Among the capabilities that Walmart mobile apps offer are shopping lists (with voice input), digital coupons, geofencing and targeted offers, and indoor navigation. One of its products, Savings Catcher , matches prices from other online stores with the current Walmart prices. If it finds a cheaper offer, the system issues a coupon worth the difference so that a user can get the product at the lowest price. Walmart’s online marketplace remains the core digital initiative the company is investing in. While only 3 percent of the company’s revenue comes from online sales, the numbers are still quite impressive. Three percent of $500.34 billion in 2018 is hardly chump change. Like many other brands, Walmart understands the potential of data. The company’s CEO Douglas Mcmillon said that Walmart currently processes 40 petabytes of data every day. To make sense of all this information, the retail giant is currently working on the largest private cloud solution , which would be able to process 2.5 petabytes of data per hour. The company is actively using customer data to personalize the shopping experience, offer more relevant offers, coupons, product recommendations, and simplify checkout and payments.

Tesco: Smart Technologies for a Better In-store Experience and Data-driven Personalization

Digitalization of Tesco can be described in many different ways, as it includes transformation on multiple levels of their business. The first step Tesco took at the beginning of the 2000s was implementing the brick-and-click business model. Already having a solid IT infrastructure to manage internal processes, Tesco launched online platforms that allowed customers to browse and shop online. Then a person could pick ordered items at warehouses dedicated to online purchases. As technologies opened advanced options, Tesco took the initiative to improve their in-store organization. Customers were armed with scanning devices to do a manual check-out. The whole process was named scan as you shop , and it can also be done with smartphones today. It’s available only for Clubcard users, who are allowed to pack scanned items right in the store and pay for them with the help of a digital cart or an e-wallet. Customers can also scan discount coupons and vouchers to store bonus points on their device to spend them from the device. This helped to make the purchase process easier, boosting overall operation speed for brick-and-mortar stores. So-called broccoli cameras were installed to keep track of empty trays, while electronic price labels helped reduce employee manual operations. Employees, in their turn, are using smart badges . Those badges allow for checking item availability by scanning its bar-code. These in-store optimizations are enhanced by a data-driven personalization approach. Tesco Clubcard allows customers to receive offline and online discounts on their preferred products. The data is received using a card for Tesco purchases, giving a unique ID to every purchase. Armed with all that data, Tesco generates a personalized discount offering, sending these deals to customer mobile devices or Clubcard accounts. Tesco also uses its mobile app to suggest a better in-store experience, allowing customers to browse product store location. The further development of Tesco’s digital transformation continued with the app using AR to show product location in the store for visitors and employees. Supporting brand recognition and application usage, smart devices sold by Tesco are offered with Tesco apps preinstalled. [embed]https://www.youtube.com/watch?v=qJMyC9o08OM[/embed]

H&M: Connecting Virtual Shopping with the Physical Conveniences

An example of an H&M image search

Source: http://blog.wide-eyes.it

The items can be purchased from the search page so that it can be considered as a smart move to drive customer attention to the H&M brand.

Domino’s Pizza: Pioneering the On-demand Retail Economy

A global pizza restaurant chain, Domino’s was early to enter the online and mobile on-demand delivery market. Thus, digital and data-based initiatives are playing a major role in the company’s continued growth. Over 60 percent of total US sales were generated by mobile devices in 2016. As for 2018, Domino’s Pizza experienced growth of revenue from quarter to quarter. Among Domino’s most significant digital initiatives are its loyalty program, Piece of the Pie Rewards, its mobile app and the proprietary point of sales system (PULSE). The latter includes a number of advanced features, such as automatic driver routes, inventory ordering, pizza tracking, custom online pizza ordering, and building. The system has significantly added to the overall operational efficiency by automating a number of routine tasks. Domino’s main mobile offering is the Anyware app . The tool allows you to order over 13 million pizza combinations, using nearly any device, including a smartwatch, connected car, smart TV, Google Home, or Amazon Echo. The service also integrates with third-party services, allowing you to place orders using text messages, Facebook Messenger chat, or even Twitter. The company is also expanding its partnerships with other tech companies and testing some experimental technologies, including drone pizza delivery .

As any consumer-centered industry, retail puts a priority on the customer experience. Optimizing this experience for the digital age is the primary task of any modern retailer. The brands can win by mixing online and offline experiences and establishing a solid omnichannel presence. According to Deloitte , the following technology trends will shape digital retail this year :

• The reimagined in-store shopping experience, focusing on inspiration or convenience;
• Conversational commerce: adoption of connected devices and voice user interfaces (VUI);
• Robotic technologies and AI-assisted shopping;
• Applying agile methodologies at scale.

So, if your business still fails to innovate and struggles to meet customer expectations, it’s time to consider possible digitization strategies. Otherwise, you might be left behind or even go out of business, unable to retain your market share, not to mention further growth. To learn more about how digital transformation reshapes different industries, see other articles from the series.

• Digital Transformation Stories: How UPS, Amazon, JD.com, Delta and Maersk Change Transportation and Logistics Industry
• Digital Transformation Stories: How JetBlue and Marriott Advance Travel Experience
• Digital Transformation Stories: How Mastercard and Capital One Have Joined the Fintech Wave

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The secrets to Walmart’s success

Global Visionary Connector of Ideas and People for Profitable Business Growth. Passionate about Leadership, Technology and Retail.

Most impressive from a recent evening visit to the Walmart Museum in Arkansas were the company’s yearly chronological milestones throughout the exhibit areas. Being a technology geek, my focus quickly transitioned to understanding the historical innovation adoption cycle.

Additionally, as a student of leadership, of interest was the culture messaging of founder Sam Walton in growing the company.

“Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitor.” –  Sam Walton

The following day, I had the pleasure of spending quality time with the Walmart Asset Protection (AP) team. Part of the trip included touring new technologies deployed at a store in Tulsa, Oklahoma.

The Walmart Museum, the AP conversations, and the store walk were a great reminder of several key success formula ingredients in crafting the world’s largest retailer.

The three megatrends driving the future of Retail

Post-World War II, technology has been the primary engine driving the retail industry’s transformation through three powerful megatrends.

Pre-1970, ever efficient data-generating manufacturer production lines optimized retail supply chains. The introduction of the  UPC Barcode  in the 1970s empowered retailers to take control of their own destiny.

The current megatrend phase emerged with the advent of the  Smartphone . Consumers are now the power brokers of the retail shopping journey.

The visit to the Museum confirmed my global keynote messaging from above chart that Walmart is an example retailer that understood key innovation transitions. Sam Walton was on the money when he said  “information is power.”  It is the foundational data intelligence enabler of continuous business model improvements.

Walmart innovation accelerates

In response to mobile empowered consumers and ecommerce trends, Walmart has accelerated deployments of new technologies. An example is the Retail Intelligent Lab in Levittown, New York.

In April, Walmart announced the expansion to 350 stores of autonomous artificial intelligence computer vision mobile  robots (AMRs) used to provide real-time on-shelf product data. *Note below video has no sound.

The company is also expanding autonomous, self-driving floor  scrubbers  from 300 to 1500 locations and by the end of the year will have 1700 robotic  BOPIS  (Buy-On-Line-Pickup-In-Store) towers.

Continuous asset protection innovation 

The spirit of unending incremental innovation was alive and well represented during my visit to the Walmart AP test store in Oklahoma. For security reasons, I will only comment on a few of the technologies and will not go into extensive details observed during the tour.

Numerous science-backed solution examples from the  Loss Prevention Research Council (LPRC) , including vivid reminders of the   “See it, Get it, Fear it” theft deterrence philosophy are present throughout the Tulsa store. In the parking lot and on strategic locations around the building, you will find the  “Lot Cop”  where  s olar power, visual lighting, video with analytics, and audio capabilities combine in a unique solution to deter crime.

To understand Zone 4 parking lot protection, read  “ Welcome to Omnichannel Retail Loss Prevention “ , on  LPRC zones of influence  layered security theft deterrence.

A self-checkout secure future 

From multiple perspectives, the front-end of the Oklahoma store is the future of retail. Consumer have an extensive number of options to complete their shopping journey while passive / active security solutions deter Point-of-Sale (POS) criminal activities.

Walmart has deployed  computer vision  technology with artificial intelligence (AI) powered cameras to monitor checkouts in more than 1,000 stores.

The POS terminals in the Tulsa store have a Walmart patented camera installation with built-in analytics that integrate a public view image of the shopper into the transaction. Also being tested is video transaction monitoring for bottom of the basket items in large orders

This particular location has 30 self-checkout stations, including full-belt variations. Larger public view monitors are above the lanes, each testing different features of incremental deterrence. Additional public view monitors are also prevalent throughout the store, either in high theft categories (ePVMs) or at door exits.

A culture of accountability

The visit to the Museum was a great reminder of the company culture created by Sam Walton. His  “ Top 10 Rules for Business Success”   continue to resonate today.

Pleasantly surprised that Sam’s motivational ideas can still be found behind the scenes in Walmart stores. The rules for success were summarized in the employee breakroom. Sam’s image and multiple of his quotes make an appearance in the back of the store.

Of interest on this trip was the backroom poster-size employee accountable  shrink and safety dashboard.  The short QR-activated training videos on the different tasks was a creative addition to the action items.

The secrets to Walmart’s success 

The secrets to Walmart’s continued success include a continuous history of incremental innovation. Road-mapped additive solution layers to any new technology while concurrently lowering overall costs creates win-win long-term vendor partnerships.

Just as important to innovation is the continued focus on the growth culture originally envisioned by Sam Walton. Today, both technology and culture are primarily concentrated on the evolving consumer shopping journey.

“There is only one boss. The customer . And he can fire anybody in the company from the chairman on down, simply by spending his money somewhere else.” –  Sam Walton

———————-

My appreciation to the Walmart Asset Protection team for the kind hospitality and the openness of the innovation dialogue during my visit. Videos courtesy of Walmart media.

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Walmart – Digital Transformation Strategies

All the vital news, analysis, and commentary curated by our industry experts.

Published: December 19, 2023 Report Code: GDDT0755ES-ST

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Table of Contents

Walmart digital transformation strategies overview.

Walmart is leveraging AI-based technologies as a part of its digital transformation strategies. The annual ICT spending of Walmart was estimated at $9.5 billion in 2023. A major share of this spending is earmarked for acquiring software, network and communications, and ICT services from vendors. Walmart Inc (Walmart) is a US-based omnichannel retailer that sells groceries, consumables, health and wellness products, office products, apparel, fuel, and home furnishings, among others through grocery stores, supermarkets, hypermarkets, department and discount stores, e-commerce portals and neighborhood markets.

The ‘Walmart Digital Transformation Strategies’ report will act as a reference point to understand the company/competitor’s digital strategy. It will also help in understanding the digital preparedness of the company against its peers. The information included in these reports is sourced from a mix of our very own internal database and authentic secondary research links such as the company’s annual report, presentations, press releases, etc. The report covers an overview of the company, its digital transformation strategies, technology focus areas, technology initiatives, technology introductions, partnerships, investments, acquisitions, and ICT spending among others.

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Digital Transformation Strategies

Walmart U.S. has launched Walmart Voice Order, a conversational AI tool, which enables shoppers to voice order their purchases by pairing their Walmart accounts to their mobile devices and smart speakers. With the conversational AI tool, customers can quickly shop online via Google Assistant or Siri without having to browse through long product lists on the Walmart app. Walmart International also tapped into AI to quickly resolve simple customer queries. The business segment augmented its existing chatbots with natural language understanding (NLU) technology to allow customers to track their orders and returns. These chatbots, which converse with customers via text or voice, allow human customer service agents to focus on solving more complex customer queries.

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Walmart Technology Theme Focus

Walmart is utilizing several emerging technologies including artificial intelligence, big data, cloud, robotics, and alternative reality to enhance operational efficiency and product offerings.

Walmart Technology Focus

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Walmart Technology Initiatives

Walmart has been involved in several strategic technology partnerships and collaborations, technology developments, and rollouts over the past few years. For instance, Walmart launched My Assistant, a generative AI-powered tool, for non-store employees in the US. My Assistant is available within Walmart’s employee app Me@Campus, which helps employees summarize long documents and create new content. Walmart claimed that the tool will increase the productivity of employees as it automates repetitive, monotonous tasks.

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Walmart ICT Spend by Function

• Communications
• Data Center
• Application
• End-user Computing
• Service Desk

Walmart ICT Spend by Function, 2023 (%)

Walmart ICT Spend by Channel

• Internal Development and Maintenance
• Technology Vendors (Direct)
• Local Resellers
• ICT Services Providers/Consulting Firms
• Specialist Outsourcers
• Systems Integrators

Walmart ICT Spend by Channel, 2023 (%)

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Walmart External ICT Spend by Segment

• ICT Services
• Software (Including Cloud SaaS)
• Hardware (Including Cloud IaaS)
• Network and Communications

Walmart External ICT Spend by Segment, 2023 (%)

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This report provides:

• Insight into Walmart’s technology activities.
• Insights of its digital transformation strategies and technology center and innovation program.
• Overview of technology initiatives covering product launches, partnerships, investments, and acquisitions.
• Insights on each technology initiative including technology theme, objective, and benefits.
• Details of estimated ICT budgets and major ICT contracts.

Reasons to Buy

• Gain insights into Walmart’s technology operations.
• Gain insights into its technology strategies and innovation initiatives.
• Gain insights into its technology themes under focus.
• Gain insights into its various product launches, partnerships, investments, and acquisitions.

Overview                                                                                              

– Brief information about the company, its business divisions, and its financials

Digital Transformation Strategy                                                      

– A summary of key  digital strategies/implementation efforts of the company

Accelerators, Incubators, and Other Innovation Programs      

– D iscusses the company’s key strategic units, innovation labs, incubation, and accelerator programs dedicated to technology innovation

Technology Focus                                                                               

– Lists the technology themes pertinent to the industry the company operates in and highlights the themes adopted by the company

Technology Initiatives                                                                        

– Discussion about all the technology introductions & partnerships the company has entered

Venture Arm: Alexa Fund                                                               

– Brief information about the Company’s Ventures and its key decision-makers

Investment                                                                                         

– Brief discussion about the investments made by the company to acquire new technologies

Acquisitions                                                                                        

– Brief discussion about the acquisitions by the company

Partnership and Investment Network Map                                 

– A bird’s eye view of all the partnerships/investments/acquisitions that the company has made in the last 3-5 years

ICT Budget and Contracts                                                                 

– The company’s ICT budget segregated into hardware, software, and managed IT services

Key Executives                                                                                      

– Lists key executives and Digital Transformation Executives of the company, typically the key decision makers/influencers

Frequently asked questions

The annual ICT spending of Walmart was estimated at $9.5 billion in 2023.

Network accounted for the highest ICT spending by function for Walmart in 2023.

Internal development and maintenance accounted for the highest ICT spending by channel for Walmart in 2023.

Software accounted for the highest external ICT spending by segment for Walmart in 2023.

Artificial intelligence, big data, cloud, robotics, and alternative reality are the key technological themes in focus for Walmart.

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