Doug McMillon, the CEO and president of Wal-Mart Stores, joined us at our recent CEO Summit. Starting as a summer associate during college, McMillon rose through the ranks to become the president and CEO of Sam’s Club and then head of Walmart International before being named chief executive in February. With competition intensifying from e-commerce players, McMillon has been focusing on unifying the customer experience across 11,000 retail locations in 27 countries as well as its e-commerce websites in 11 countries. We spoke with him briefly about that vision.
How has Walmart’s approach to strategy changed?
Doug McMillon: Historically, we’ve had a bottom-up approach to strategic planning within the company, given the number of operating segments that we have, the number of brands and store formats that we have, the different income levels of our customers, and the dispersion across markets. It was more challenging to develop an overall global strategy that was relevant in terms of the customer proposition.
What’s clear is that the Internet shows us how connected we all are. So now, whether you are in the U.S. or China or in another part of the world, we have a lot in common. Data and technology matter everywhere. Our customers don’t distinguish between a Walmart store and Walmart.com. They only see one Walmart. So we need a strategy based around serving customers however they want to shop, and we’ve changed our planning approach to take an enterprise view.
What are the big challenges in creating new growth without losing focus on the core?
DM: How do you organize what is almost a $500 billion business that is increasingly a technology and data company? And how do you do it while keeping engaged to serve customers today? Because without a strong core, short term results suffer. Inside the company, we think about this: if we pull e-commerce and stores too far apart, we may confuse the customer. If we coordinate our efforts too much, the larger core may diminish the progress on new capabilities. That’s why striking the right balance is so important.
What are you doing to launch new digital growth initiatives?
DM: To move more quickly, we’ve formed @WalmartLabs, an accelerator focused on meeting the global needs of our customers wherever they are – browsing the website, shopping in a store, or using their mobile device. We’ve also hired more than 2,500 engineers, programmers and data scientists, and acquired 15 technology companies in the last three years. These include Luvocracy, an online community that shows recommendations from friends, and Stylr, a mobile shopping app.
Our British supermarket unit Asda is experimenting in London by creating “click-and-collect points” at tube stations so that customers can order groceries online, and then pick them up when they get off the train. The idea has potential in the U.S. to set up collection points for groceries in convenient places. Maybe someday we’ll be near a school in Dallas, where a mom or dad is picking up their kids. Ultimately, what pulls all these initiatives together is our focus on the customer. It’s all part of integrating digital and physical retail in new ways to help customers save time, save money, and have access to what they want and need.