August 13, 2024 • 27 mins
This podcast episode dissects Walmart's enduring success, drawing on over 30 years of experience with the company. It begins by recommending Sam Walton's autobiography, Made in America, to understand Walmart's origins and principles. Walmart stands out for its agility, adapting to its massive scale with a consistent purpose: "to help people save money and live better."
Walmart's strategy today is a "people-led, tech-powered, omni-channel retailer." Each element of this strategy is explored, highlighting Walmart's investments and initiatives:
- Investing in People: Walmart's commitment to associates is clear with a 30% increase in hourly wages over five years and investments in education through the "Live Better U" program. The company also supports associate stock purchases, aligning their financial success with Walmart's.
- Harnessing Technology: Walmart embraces cutting-edge tech, such as the "Shop with Friends" virtual fitting room, and invests in automation, robotics, and AI to enhance supply chain efficiency.
- Omni-Channel Experience: Achieving omni-channel success involves integrating processes and technology across all sales channels. Walmart's "buy online, pick up in store" model proved essential during the pandemic, showcasing its forward-thinking approach.
- Reaping the Rewards: Walmart's strategy is reflected in its financial performance, with a 6% growth in net sales to $642 billion in fiscal year 2024, surpassing $100 billion in e-commerce sales. Operating income grew 32% year-over-year, and returns increased by 200 basis points.
- Beyond Core Retail: Walmart's vision extends into digital ventures like its retail media network, selling advertising across its digital and physical platforms. In 2024, advertising sales reached $3.4 billion, a 28% increase from the previous year, while membership income grew 20% year-over-year.
The episode concludes by emphasizing the importance of aligning investments with a company’s purpose and strategy. Walmart exemplifies this alignment by investing in people, technology, and omni-channel capabilities, contrasting with companies that lack a clear purpose or fail to invest accordingly.
This analysis offers insights for businesses of all sizes. Embracing a clear purpose, adapting strategies to market demands, and aligning investments with those strategies can drive success in today's dynamic marketplace.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr. Matt Waller (00:10):
Welcome to the Matt Waller podcast where we
look at success at theintersection of technology,
logistics, supply chain, retailand CPG, also known as the
retail value chain.
I want to clarify that thispodcast is distinct from my
responsibilities as a professorin the Sam M Walton College of
Business.
Nonetheless, it aligns with myaspiration to provide practical
(00:31):
insights to professionals andbusiness by showcasing companies
and people that can enhanceyour ability to manage, lead and
strategize and marketeffectively in the retail value
chain.
Today I'm going to do somethinga little unusual on this
podcast.
I'm not going to interviewanyone, it's just going to be me
and I'm going to be talkingabout Walmart.
(00:53):
And the reason I'm going to dothat is I've been following
Walmart for over 30 years.
Before I came for my interviewfor my first job here in
Northwest Arkansas back in 1994,my father-in-law gave me a book
called Made in America by SamWalton.
(01:14):
This book is an autobiographyof Sam Walton.
It's very interesting.
It actually starts prior to thebeginning of Walmart but
proceeds forward up until the90s early 90s.
Strongly recommend you read thebook.
It's a great book, easy read.
But if you want to understandWalmart and a lot of people ask
(01:40):
me about Walmart because one.
I've been here for over 30 years.
I've been following Walmart.
For over 30 years.
I've worked with Walmart onprojects.
Many of my former students areexecutives at Walmart.
I continue to be amazed at howthis company can change so
quickly, given that it's reallythe largest company in the world
(02:05):
.
Most companies of that sizecan't move that quickly.
But a lot of times, given myarea of supply chain management,
people ask me about Walmartfrom a supply chain management
perspective.
Recently, I've had a number ofpeople ask me is Walmart going
to be able to continue tosurvive and thrive over the next
few years, given all of thecompetition that's popping up?
(02:28):
You've got new competition,even through e-commerce, from
companies like Timu from China.
It's becoming increasinglydifficult to do business in many
, and so can Walmart continue togrow and thrive?
And so, again, I'm not the onlyexpert on this by any means,
(02:51):
and I think there's many othersthat have greater perspectives
than I do, but I'm going to giveyou my perspective on this.
One thing that we have to beamazed about with Walmart is how
quickly they can change, givenhow big they are and how much
they experiment with new ideas,and I believe from what I've
(03:15):
read, both empirical articles.
I've studied books, I've readcase studies of companies that
you have to have a clear purposeif you're going to be able to
make change quickly, if you'regoing to be able to thrive.
And that's something Walmarthas had.
They've basically had the samepurpose.
(03:36):
I think it's been stated orexplained different ways over
the years but save money, livebetter.
So Walmart's purpose is veryclear.
Save money, live better.
So Walmart's purpose is veryclear.
Why do they exist?
To help people save money andlive better, both.
But it's not enough to havepurpose.
There's a lot more to it, andso today I'm going to cover
(03:59):
purpose, the values, how it'sbeing enacted today, some of the
things they're involved intoday, and all of this is public
information.
It's just from my lens that I'mexplaining it, but you'll see
very shortly that that purposereally is important and it's
(04:21):
still just as relevant today asit was then.
Everyone, especially now, if youthink about it, we are looking
for good value and with all theinflation we've had over the
past few years, it's hardbecause many times people are
spending their budget, say, ongroceries, and they don't have
(04:42):
as much money to spend ongeneral merchandise or other
things.
So Walmart has played a keyrole, in my opinion, over the
years in taming inflation tosome degree, but also in terms
of generating innovationthroughout the supply chain, and
(05:02):
I'll explain that as we gothrough it.
But if you think about it, whenyou think about the purpose of
a company, the purpose of acompany answers the question why
do we exist?
It is so important, whetheryou're an individual or a
company, to know what yourpurpose is.
(05:23):
And again, walmart's purpose isvery clear help people, save
money and live better.
But the purpose of any companyis shaped by its values, and so
the values of Walmart have beenvery clear throughout the years.
Walmart have been very clearthroughout the years.
So, as you'll see in this slidehere, these are the basic
(05:55):
values of Walmart Respecting theindividual, acting with
integrity, serving customers andmembers and striving for
excellence.
So a purpose is reallyimportant because it tells you
why you exist.
But the values of a company andthis isn't just Walmart, it's
any company shape how you carryout that purpose, which is very
(06:16):
important, and you'll see mostcompanies.
If you ask someone in thecompany what's the purpose of
your company, many times theywon't know what it is.
What are your values?
Again, they won't know what itis.
They might find it on thewebsite or somewhere else.
So I think that pivot or change.
(06:39):
But if you're going to do it,there's got to be a lot of
people that individually makedecisions on their own.
If you want to empower them andif you want to change quickly,
you've got to empower people.
(07:00):
But if people understand thepurpose and they understand the
values, that shapes how theyfulfill the purpose.
So again, your purpose tellsyou why you exist and I think
every company should have aclear purpose.
They should have clear values.
But over time, how the purposeis delivered or manifested
(07:29):
changes that can change.
In other words, how you fulfillthe purpose can change.
So today, you'll hear Walmartoften saying they're a
people-led, tech-powered,omni-channel retailer helping
people save money and livebetter.
So again, you hear this all thetime from leadership and other
(07:53):
places, but you also see it intheir investments that we're
going to get into here in aminute.
So again, the way they'refulfilling this now, if you pay
attention to what they say, isthey're a people-led fulfilling
this.
Now, if you pay attention towhat they say, is there a
people-led, tech-enabled ortech-powered, omni-channel
retailers?
Let's take this one at a timeI'm going to show you in a
(08:20):
minute.
People-led.
So I'm going to show you in aminute some things that they've
done, ways they've invested inassociates to be more people-led
, to improve the ability ofpeople to lead.
And, again, as I said, if youdon't know your purpose and
you're a big company, it's hardto pivot, it's hard to change.
If you are a big company andyou know your purpose, the
(08:40):
people in the company know thepurpose, they know the values
and they know how we'recurrently trying to implement
our purpose.
In this case, walmart's tryingto be people-led, tech-powered,
omni-channel retailer helpingpeople save money and live
better.
So they're making a number ofinvestments I'll get to in a
(09:04):
minute.
And to associates to help themdo a better job of leading,
because, again, you've got tohave people being able to make
decisions on their own and to dothat they've got to be equipped
properly and they've also gotto be incented properly.
We'll talk about that.
Tech powered you see Walmartright now making all kinds of
(09:28):
investments in technology, whichwe will get to in a moment.
So, those two things people led, tech empowered you're going to
see.
If you pay attention to wheretheir investments have gone, you
will see that they really aredoing that, and so that's
(09:50):
something else that I think inany company I'm using Walmart as
an example here, but you cantake any company look at their
purpose, look at their values,look at how they're currently
trying to fulfill their purposeand say are their investments
going towards those things theysay that they're doing to
(10:10):
implement their purpose today?
Are they really doing it?
It's very easy to find out,especially with publicly traded
companies, then.
So they're a people-led,tech-powered, omni-channel
retailer.
Omni-channel means that peoplecan shop however they want In
(10:35):
this case, in the case ofWalmart so I can go into the
store, buy product.
I can buy online, then go tothe store and pick it up.
I can buy online, have itdelivered to my home, delivered
in my home, or even delivered insome markets by drone delivery,
(10:56):
which I have done for I've gota little video of that on my
LinkedIn page.
But that's just because youhave those channels that I was
just describing in-store, online, delivered to home, delivered
in a home, et cetera, et cetera.
That doesn't mean you're trulyomni-channel.
(11:17):
That just means you'remulti-channel.
Omni-channel means that theprocesses and technology that
bring those multiple channelstogether exist, because most, I
think brick-and-mortar retailersthat go to omni-channel first
(11:38):
have to pass through themulti-channel threshold, that is
, you can't just flip a switchand all of a sudden be
omni-channel.
It's very hard because you'vegot to change your
organizational structure, you'vegot to change your processes,
you have to change yourincentives, because customers
(12:00):
don't care what yourorganizational structure looks
like.
What that means is they want tobe able to shop however they
want, whenever they want to shop, regardless of how you're
structured internally.
You've got to have anintegrated organizational
structure as well as integratedbusiness processes and
(12:25):
technologies.
It's very challenging and Idon't know if any retailer at
this point is truly 100%omni-channel, but they're moving
that way.
Walmart really has moved thatway quicker than I thought they
could.
I remember when they firststarted experimenting with buy
online pick up at store Ithought it was way out there.
(12:48):
But yeah, during COVID, ofcourse that really ramped up and
all of their experimentation inbuy online pick up at store
really paid off in the pandemic,and the pandemic changed the
way people behaved in terms ofshopping behavior and other
(13:08):
things.
So you know you could say thatis luck, but I always say hard
work and smart will eventuallylead to what looks like luck,
because you want to have as manyoptions available as possible,
whether you're a person or acompany that can enable you,
(13:30):
when a certain situation comesalong, to take advantage of that
.
But the other thing is clearly,from things I've read and many
of you have read and know,walmart has changed their
organizational structure toadapt to this A lot of times.
Suppliers still have notchanged their organizational
structure to adapt to that andpart of that's because many
(13:52):
other retailers haven't done so.
Okay, this slide comes directlyfrom their annual report and you
will see that we have.
This is the fiscal 2024 annualreport.
Net sales grew by 6% from 2023,from $605 billion to $642
(14:24):
billion.
That is huge for a company ofthis size.
And look at the profit theoperating income went from $20
billion to $27 billion.
The income before consolidatednet income went from $11 billion
(14:50):
to $15 billion, so profit wasactually growing faster than
revenue.
But if you look at from 2022,the net sales went from 567
billion to 642 billion.
(15:12):
So for a company of this size,that is quite remarkable.
The other thing, if you lookthrough the annual report which,
by the way, you can get atcorporatewalmartcom or other
places you can go to YahooFinance has a lot of information
on that.
There's plenty of places to getthis information.
Their e-commerce sales exceeded$100 billion.
(16:17):
For me that's hard to keepgrowing with the size of Walmart
.
It's hard to make the changesyou need to make to be able to
grow and to be able to growprofitably.
But again, if you've got a realclear purpose, a real clear set
of values to help shape how youimplement that purpose, and
(16:38):
then you're current on howyou're trying to implement that
purpose from a strategyperspective, it can be done.
It's just it's not easy.
So earlier I mentioned that howthey're trying to implement
their purpose is they arepeople-led, tech-powered,
(17:08):
omni-channel retailer.
So the people-led part and partof what I was mentioning is
that they've actually madeinvestments to demonstrate that.
If you look at hourlyassociates for Walmart, their
wages have increased by over 30%over the past five years and
they are investing in all kindsof benefits, including
(17:29):
educational benefits, soassociates can study for
certificates and degrees and allkinds of things to help them be
more capable of leading.
And then the other thing is youprobably have seen or read that
(17:51):
they are investing over abillion dollars in training and
development for associates by2026.
They have something called LiveBetter you, which they have had
.
A large number of associatesget all kinds of certificates
(18:17):
educational certificates thatdemonstrated these associates
have added to their capabilities.
The only reason I'm bringingthis up is, again, you have
purpose.
It says why we exist, valuesthat shape how you actually
implement that within currentstrategies.
They're people-led,tech-powered.
So the question is are theyreally doing that?
(18:39):
Well, these are examples.
Tech-powered.
So the question is are theyreally doing that?
Well, these are quantitativeexamples of how they actually
are.
The other thing that I mentionedabout the people-led part of
being able to implementpeople-led means that people
know why they're doing whatthey're doing, but they also
need education.
They need new skills andcapabilities, but they also need
(19:02):
education.
They need new skills andcapabilities, but they also need
the right incentives, andhundreds of thousands of Walmart
associates are participating intheir stock purchase program,
and so Walmart will basicallycontribute a certain percentage
(19:22):
of money to stock that's beingbought by associates up to a
certain amount.
So in some ways that gives theman incentive to buy right,
because immediately they have agood ROI, because Walmart's
contributing to that purchase.
But now their incentives arealigned with Walmart.
(19:43):
Any company can do this.
Walmart's been doing it for along time.
Again, if you read Made inAmerica by Sam Walton, you'll
see that's actually somethingthat's deeply embedded in their
culture.
That goes way back.
So you've got people-led,tech-powered, omni-channel
retailer.
(20:04):
So now the question is isWalmart investing in technology
to make them a tech-poweredomni-channel retailer?
I'll give you an example.
If you look at the next slide,you'll see a little bit of a
difference.
Slide five this comes from the.
I've got the URL up therewalmartcom slash shopwithfriends
(20:29):
.
It's called shopwithfriends.
It's a virtual fitting room, asyou can basically look at
various outfits and share itwith other people as well.
So this is an investment in AIand computer technology that
(20:57):
makes sense for an omnichannelretailer.
You need these kinds oftechnologies.
Are these technologies wherethey need to be in five years?
Probably not, but you've got tobe moving forward and
experimenting if you want to getthere.
Shop with Friends is oneexample of a tech-powered
(21:17):
omni-channel retailing strategytactic that Walmart's using.
That is consistent with whatthey've said they're going to do
, and it takes a lot ofinvestment to get these things
right.
Another example is from.
I find, as you see here on slidesix, this comes from Walmart
(21:39):
global tech a website.
If you're interested in knowingabout what Walmart's doing from
a technology perspective.
There's a great website,walmart Global Tech website, so
it's techwalmartcom, and they'vegot a bunch of really good
(22:00):
content.
They've got blogs out thereabout technology that they're
implementing.
You can read and learn moreabout it.
This particular blog is abouthow Walmart is automating
automated storage and retrievalsystems in their distribution
centers and fulfillment centersand using robotics.
(22:22):
This is not easy.
This is easier said than done.
It's hard to make this work,but there's a bunch of blogs on
here you can look at.
The point of all this is thatif you look at where Walmart's
investing right now, you canfind lots of evidence for where
they are truly investing in apeople-led, tech-powered,
(22:47):
omnichannel retailer perspective.
Walmart is investing heavily intheir digital businesses, like
selling advertising.
Like selling advertising.
(23:09):
If you Google retail medianetworks, you can find out more
about retail media networks.
But it's basically a retailerlike Walmart can sell
advertising on their website,walmartcom.
They can sell it on their app.
They can have product pages,brand pages.
They can sell it in the store,like when you do self-check
stand.
There can be advertisementsthere at the gas pump, over the
(23:34):
intercom, et cetera, et cetera.
There's all kinds of placesthat they can sell advertising
and, according to their annualreport, in 2024, their sales of
advertisements exceeded $3.4billion.
(23:56):
Think about that, I mean, andthis is still relatively new if
you think about it.
Yeah, walmart also has supplychain as a service.
They call it fulfillment as aservice, and this particular
slide which you can get to thisis from their website, but it
(24:19):
allows a company to not onlysell through their marketplace,
but to basically provideservices to marketplace sellers,
to sell more efficiently andmore effectively using Walmart
business processes, technologyand assets.
(24:42):
But the digital business iscomplicated and has to be
thought through carefully.
They're monetizing all kinds ofaspects of their digital
footprint and I think you'regoing to see more of this in the
future.
That would be my guess in thefuture.
(25:04):
That would be my guess, butit's really.
If you think about it.
It's part of an effective,tech-powered, omni-channel
retailer.
You've got to use data,monetization, data and
information are really some ofthe most valuable parts of the
supply chain.
I think many times companiesunderestimate the value of
(25:27):
supply chain, but it's clearlysomething Walmart has always
paid a lot of intention to.
But today, to be able todeliver value through supply
chain management, it's got to betech powered.
Technology is the key tosuccess in supply chain
(25:50):
management in the future, andthat includes computer vision
technology, sensors, rfid,visual sensors, artificial
intelligence.
I've got to say that, which isreally true.
There's all kinds of ways ofimplementing artificial
intelligence in supply chain.
(26:13):
So you know, what you heard justnow is my perspective, my
opinion about what it takes tobe nimble when you're a large
company.
I actually think it's true,even if you're a small company,
you do need to know your purposeand your values and how you're
going to implement it from astrategic perspective.
And then your investments needto.
(26:33):
You need to put your moneywhere your mouth is with where
you say you're going.
I see that happening at Walmartacross the board.
There's many companies where Idon't see it happening.
But again, as I mentionedearlier, a lot of companies
don't even know their purpose ortheir values at least people in
the company don't and then ifyou look at their investments, a
(26:54):
lot of times their investmentsaren't consistent with that
overall purpose or even currentstrategy.
So I hope you enjoyed this.
I'm going to probably do a fewothers similar to it.
If you're finding value in thispodcast.
We greatly appreciate yoursupport by subscribing to our
YouTube channel.
Additionally, following us onApple and Spotify and leaving up
(27:17):
to a five-star review would beimmensely helpful.
We welcome any feedback orquestions related to the podcast
, as well as suggestions forfurther topics and guests.
You can leave your comments onour YouTube channel and rest
assured that I will read eachand every one of them.
Please also take a moment tocheck out our podcast sponsors,
(27:38):
as they play a critical role inkeeping this podcast running.
For more information onspecific topics, timestamps or
links to articles mentionedduring the podcast, head over to
mattwallerpodcastcom.
Welcome to the Matt Waller podcast where we
look at success at theintersection of technology,
logistics, supply chain, retailand CPG, also known as the
retail value chain.
I want to clarify that thispodcast is distinct from my
responsibilities as a professorin the Sam M Walton College of
Business.
Nonetheless, it aligns with myaspiration to provide practical
(00:31):
insights to professionals andbusiness by showcasing companies
and people that can enhanceyour ability to manage, lead and
strategize and marketeffectively in the retail value
chain.
Today I'm going to do somethinga little unusual on this
podcast.
I'm not going to interviewanyone, it's just going to be me
and I'm going to be talkingabout Walmart.
(00:53):
And the reason I'm going to dothat is I've been following
Walmart for over 30 years.
Before I came for my interviewfor my first job here in
Northwest Arkansas back in 1994,my father-in-law gave me a book
called Made in America by SamWalton.
(01:14):
This book is an autobiographyof Sam Walton.
It's very interesting.
It actually starts prior to thebeginning of Walmart but
proceeds forward up until the90s early 90s.
Strongly recommend you read thebook.
It's a great book, easy read.
But if you want to understandWalmart and a lot of people ask
(01:40):
me about Walmart because one.
I've been here for over 30 years.
I've been following Walmart.
For over 30 years.
I've worked with Walmart onprojects.
Many of my former students areexecutives at Walmart.
I continue to be amazed at howthis company can change so
quickly, given that it's reallythe largest company in the world
(02:05):
.
Most companies of that sizecan't move that quickly.
But a lot of times, given myarea of supply chain management,
people ask me about Walmartfrom a supply chain management
perspective.
Recently, I've had a number ofpeople ask me is Walmart going
to be able to continue tosurvive and thrive over the next
few years, given all of thecompetition that's popping up?
(02:28):
You've got new competition,even through e-commerce, from
companies like Timu from China.
It's becoming increasinglydifficult to do business in many
, and so can Walmart continue togrow and thrive?
And so, again, I'm not the onlyexpert on this by any means,
(02:51):
and I think there's many othersthat have greater perspectives
than I do, but I'm going to giveyou my perspective on this.
One thing that we have to beamazed about with Walmart is how
quickly they can change, givenhow big they are and how much
they experiment with new ideas,and I believe from what I've
(03:15):
read, both empirical articles.
I've studied books, I've readcase studies of companies that
you have to have a clear purposeif you're going to be able to
make change quickly, if you'regoing to be able to thrive.
And that's something Walmarthas had.
They've basically had the samepurpose.
(03:36):
I think it's been stated orexplained different ways over
the years but save money, livebetter.
So Walmart's purpose is veryclear.
Save money, live better.
So Walmart's purpose is veryclear.
Why do they exist?
To help people save money andlive better, both.
But it's not enough to havepurpose.
There's a lot more to it, andso today I'm going to cover
(03:59):
purpose, the values, how it'sbeing enacted today, some of the
things they're involved intoday, and all of this is public
information.
It's just from my lens that I'mexplaining it, but you'll see
very shortly that that purposereally is important and it's
(04:21):
still just as relevant today asit was then.
Everyone, especially now, if youthink about it, we are looking
for good value and with all theinflation we've had over the
past few years, it's hardbecause many times people are
spending their budget, say, ongroceries, and they don't have
(04:42):
as much money to spend ongeneral merchandise or other
things.
So Walmart has played a keyrole, in my opinion, over the
years in taming inflation tosome degree, but also in terms
of generating innovationthroughout the supply chain, and
(05:02):
I'll explain that as we gothrough it.
But if you think about it, whenyou think about the purpose of
a company, the purpose of acompany answers the question why
do we exist?
It is so important, whetheryou're an individual or a
company, to know what yourpurpose is.
(05:23):
And again, walmart's purpose isvery clear help people, save
money and live better.
But the purpose of any companyis shaped by its values, and so
the values of Walmart have beenvery clear throughout the years.
Walmart have been very clearthroughout the years.
So, as you'll see in this slidehere, these are the basic
(05:55):
values of Walmart Respecting theindividual, acting with
integrity, serving customers andmembers and striving for
excellence.
So a purpose is reallyimportant because it tells you
why you exist.
But the values of a company andthis isn't just Walmart, it's
any company shape how you carryout that purpose, which is very
(06:16):
important, and you'll see mostcompanies.
If you ask someone in thecompany what's the purpose of
your company, many times theywon't know what it is.
What are your values?
Again, they won't know what itis.
They might find it on thewebsite or somewhere else.
So I think that pivot or change.
(06:39):
But if you're going to do it,there's got to be a lot of
people that individually makedecisions on their own.
If you want to empower them andif you want to change quickly,
you've got to empower people.
(07:00):
But if people understand thepurpose and they understand the
values, that shapes how theyfulfill the purpose.
So again, your purpose tellsyou why you exist and I think
every company should have aclear purpose.
They should have clear values.
But over time, how the purposeis delivered or manifested
(07:29):
changes that can change.
In other words, how you fulfillthe purpose can change.
So today, you'll hear Walmartoften saying they're a
people-led, tech-powered,omni-channel retailer helping
people save money and livebetter.
So again, you hear this all thetime from leadership and other
(07:53):
places, but you also see it intheir investments that we're
going to get into here in aminute.
So again, the way they'refulfilling this now, if you pay
attention to what they say, isthey're a people-led fulfilling
this.
Now, if you pay attention towhat they say, is there a
people-led, tech-enabled ortech-powered, omni-channel
retailers?
Let's take this one at a timeI'm going to show you in a
(08:20):
minute.
People-led.
So I'm going to show you in aminute some things that they've
done, ways they've invested inassociates to be more people-led
, to improve the ability ofpeople to lead.
And, again, as I said, if youdon't know your purpose and
you're a big company, it's hardto pivot, it's hard to change.
If you are a big company andyou know your purpose, the
(08:40):
people in the company know thepurpose, they know the values
and they know how we'recurrently trying to implement
our purpose.
In this case, walmart's tryingto be people-led, tech-powered,
omni-channel retailer helpingpeople save money and live
better.
So they're making a number ofinvestments I'll get to in a
(09:04):
minute.
And to associates to help themdo a better job of leading,
because, again, you've got tohave people being able to make
decisions on their own and to dothat they've got to be equipped
properly and they've also gotto be incented properly.
We'll talk about that.
Tech powered you see Walmartright now making all kinds of
(09:28):
investments in technology, whichwe will get to in a moment.
So, those two things people led, tech empowered you're going to
see.
If you pay attention to wheretheir investments have gone, you
will see that they really aredoing that, and so that's
(09:50):
something else that I think inany company I'm using Walmart as
an example here, but you cantake any company look at their
purpose, look at their values,look at how they're currently
trying to fulfill their purposeand say are their investments
going towards those things theysay that they're doing to
(10:10):
implement their purpose today?
Are they really doing it?
It's very easy to find out,especially with publicly traded
companies, then.
So they're a people-led,tech-powered, omni-channel
retailer.
Omni-channel means that peoplecan shop however they want In
(10:35):
this case, in the case ofWalmart so I can go into the
store, buy product.
I can buy online, then go tothe store and pick it up.
I can buy online, have itdelivered to my home, delivered
in my home, or even delivered insome markets by drone delivery,
(10:56):
which I have done for I've gota little video of that on my
LinkedIn page.
But that's just because youhave those channels that I was
just describing in-store, online, delivered to home, delivered
in a home, et cetera, et cetera.
That doesn't mean you're trulyomni-channel.
(11:17):
That just means you'remulti-channel.
Omni-channel means that theprocesses and technology that
bring those multiple channelstogether exist, because most, I
think brick-and-mortar retailersthat go to omni-channel first
(11:38):
have to pass through themulti-channel threshold, that is
, you can't just flip a switchand all of a sudden be
omni-channel.
It's very hard because you'vegot to change your
organizational structure, you'vegot to change your processes,
you have to change yourincentives, because customers
(12:00):
don't care what yourorganizational structure looks
like.
What that means is they want tobe able to shop however they
want, whenever they want to shop, regardless of how you're
structured internally.
You've got to have anintegrated organizational
structure as well as integratedbusiness processes and
(12:25):
technologies.
It's very challenging and Idon't know if any retailer at
this point is truly 100%omni-channel, but they're moving
that way.
Walmart really has moved thatway quicker than I thought they
could.
I remember when they firststarted experimenting with buy
online pick up at store Ithought it was way out there.
(12:48):
But yeah, during COVID, ofcourse that really ramped up and
all of their experimentation inbuy online pick up at store
really paid off in the pandemic,and the pandemic changed the
way people behaved in terms ofshopping behavior and other
(13:08):
things.
So you know you could say thatis luck, but I always say hard
work and smart will eventuallylead to what looks like luck,
because you want to have as manyoptions available as possible,
whether you're a person or acompany that can enable you,
(13:30):
when a certain situation comesalong, to take advantage of that
.
But the other thing is clearly,from things I've read and many
of you have read and know,walmart has changed their
organizational structure toadapt to this A lot of times.
Suppliers still have notchanged their organizational
structure to adapt to that andpart of that's because many
(13:52):
other retailers haven't done so.
Okay, this slide comes directlyfrom their annual report and you
will see that we have.
This is the fiscal 2024 annualreport.
Net sales grew by 6% from 2023,from $605 billion to $642
(14:24):
billion.
That is huge for a company ofthis size.
And look at the profit theoperating income went from $20
billion to $27 billion.
The income before consolidatednet income went from $11 billion
(14:50):
to $15 billion, so profit wasactually growing faster than
revenue.
But if you look at from 2022,the net sales went from 567
billion to 642 billion.
(15:12):
So for a company of this size,that is quite remarkable.
The other thing, if you lookthrough the annual report which,
by the way, you can get atcorporatewalmartcom or other
places you can go to YahooFinance has a lot of information
on that.
There's plenty of places to getthis information.
Their e-commerce sales exceeded$100 billion.
(16:17):
For me that's hard to keepgrowing with the size of Walmart
.
It's hard to make the changesyou need to make to be able to
grow and to be able to growprofitably.
But again, if you've got a realclear purpose, a real clear set
of values to help shape how youimplement that purpose, and
(16:38):
then you're current on howyou're trying to implement that
purpose from a strategyperspective, it can be done.
It's just it's not easy.
So earlier I mentioned that howthey're trying to implement
their purpose is they arepeople-led, tech-powered,
(17:08):
omni-channel retailer.
So the people-led part and partof what I was mentioning is
that they've actually madeinvestments to demonstrate that.
If you look at hourlyassociates for Walmart, their
wages have increased by over 30%over the past five years and
they are investing in all kindsof benefits, including
(17:29):
educational benefits, soassociates can study for
certificates and degrees and allkinds of things to help them be
more capable of leading.
And then the other thing is youprobably have seen or read that
(17:51):
they are investing over abillion dollars in training and
development for associates by2026.
They have something called LiveBetter you, which they have had
.
A large number of associatesget all kinds of certificates
(18:17):
educational certificates thatdemonstrated these associates
have added to their capabilities.
The only reason I'm bringingthis up is, again, you have
purpose.
It says why we exist, valuesthat shape how you actually
implement that within currentstrategies.
They're people-led,tech-powered.
So the question is are theyreally doing that?
(18:39):
Well, these are examples.
Tech-powered.
So the question is are theyreally doing that?
Well, these are quantitativeexamples of how they actually
are.
The other thing that I mentionedabout the people-led part of
being able to implementpeople-led means that people
know why they're doing whatthey're doing, but they also
need education.
They need new skills andcapabilities, but they also need
(19:02):
education.
They need new skills andcapabilities, but they also need
the right incentives, andhundreds of thousands of Walmart
associates are participating intheir stock purchase program,
and so Walmart will basicallycontribute a certain percentage
(19:22):
of money to stock that's beingbought by associates up to a
certain amount.
So in some ways that gives theman incentive to buy right,
because immediately they have agood ROI, because Walmart's
contributing to that purchase.
But now their incentives arealigned with Walmart.
(19:43):
Any company can do this.
Walmart's been doing it for along time.
Again, if you read Made inAmerica by Sam Walton, you'll
see that's actually somethingthat's deeply embedded in their
culture.
That goes way back.
So you've got people-led,tech-powered, omni-channel
retailer.
(20:04):
So now the question is isWalmart investing in technology
to make them a tech-poweredomni-channel retailer?
I'll give you an example.
If you look at the next slide,you'll see a little bit of a
difference.
Slide five this comes from the.
I've got the URL up therewalmartcom slash shopwithfriends
(20:29):
.
It's called shopwithfriends.
It's a virtual fitting room, asyou can basically look at
various outfits and share itwith other people as well.
So this is an investment in AIand computer technology that
(20:57):
makes sense for an omnichannelretailer.
You need these kinds oftechnologies.
Are these technologies wherethey need to be in five years?
Probably not, but you've got tobe moving forward and
experimenting if you want to getthere.
Shop with Friends is oneexample of a tech-powered
(21:17):
omni-channel retailing strategytactic that Walmart's using.
That is consistent with whatthey've said they're going to do
, and it takes a lot ofinvestment to get these things
right.
Another example is from.
I find, as you see here on slidesix, this comes from Walmart
(21:39):
global tech a website.
If you're interested in knowingabout what Walmart's doing from
a technology perspective.
There's a great website,walmart Global Tech website, so
it's techwalmartcom, and they'vegot a bunch of really good
(22:00):
content.
They've got blogs out thereabout technology that they're
implementing.
You can read and learn moreabout it.
This particular blog is abouthow Walmart is automating
automated storage and retrievalsystems in their distribution
centers and fulfillment centersand using robotics.
(22:22):
This is not easy.
This is easier said than done.
It's hard to make this work,but there's a bunch of blogs on
here you can look at.
The point of all this is thatif you look at where Walmart's
investing right now, you canfind lots of evidence for where
they are truly investing in apeople-led, tech-powered,
(22:47):
omnichannel retailer perspective.
Walmart is investing heavily intheir digital businesses, like
selling advertising.
Like selling advertising.
(23:09):
If you Google retail medianetworks, you can find out more
about retail media networks.
But it's basically a retailerlike Walmart can sell
advertising on their website,walmartcom.
They can sell it on their app.
They can have product pages,brand pages.
They can sell it in the store,like when you do self-check
stand.
There can be advertisementsthere at the gas pump, over the
(23:34):
intercom, et cetera, et cetera.
There's all kinds of placesthat they can sell advertising
and, according to their annualreport, in 2024, their sales of
advertisements exceeded $3.4billion.
(23:56):
Think about that, I mean, andthis is still relatively new if
you think about it.
Yeah, walmart also has supplychain as a service.
They call it fulfillment as aservice, and this particular
slide which you can get to thisis from their website, but it
(24:19):
allows a company to not onlysell through their marketplace,
but to basically provideservices to marketplace sellers,
to sell more efficiently andmore effectively using Walmart
business processes, technologyand assets.
(24:42):
But the digital business iscomplicated and has to be
thought through carefully.
They're monetizing all kinds ofaspects of their digital
footprint and I think you'regoing to see more of this in the
future.
That would be my guess in thefuture.
(25:04):
That would be my guess, butit's really.
If you think about it.
It's part of an effective,tech-powered, omni-channel
retailer.
You've got to use data,monetization, data and
information are really some ofthe most valuable parts of the
supply chain.
I think many times companiesunderestimate the value of
(25:27):
supply chain, but it's clearlysomething Walmart has always
paid a lot of intention to.
But today, to be able todeliver value through supply
chain management, it's got to betech powered.
Technology is the key tosuccess in supply chain
(25:50):
management in the future, andthat includes computer vision
technology, sensors, rfid,visual sensors, artificial
intelligence.
I've got to say that, which isreally true.
There's all kinds of ways ofimplementing artificial
intelligence in supply chain.
(26:13):
So you know, what you heard justnow is my perspective, my
opinion about what it takes tobe nimble when you're a large
company.
I actually think it's true,even if you're a small company,
you do need to know your purposeand your values and how you're
going to implement it from astrategic perspective.
And then your investments needto.
(26:33):
You need to put your moneywhere your mouth is with where
you say you're going.
I see that happening at Walmartacross the board.
There's many companies where Idon't see it happening.
But again, as I mentionedearlier, a lot of companies
don't even know their purpose ortheir values at least people in
the company don't and then ifyou look at their investments, a
(26:54):
lot of times their investmentsaren't consistent with that
overall purpose or even currentstrategy.
So I hope you enjoyed this.
I'm going to probably do a fewothers similar to it.
If you're finding value in thispodcast.
We greatly appreciate yoursupport by subscribing to our
YouTube channel.
Additionally, following us onApple and Spotify and leaving up
(27:17):
to a five-star review would beimmensely helpful.
We welcome any feedback orquestions related to the podcast
, as well as suggestions forfurther topics and guests.
You can leave your comments onour YouTube channel and rest
assured that I will read eachand every one of them.
Please also take a moment tocheck out our podcast sponsors,
(27:38):
as they play a critical role inkeeping this podcast running.
For more information onspecific topics, timestamps or
links to articles mentionedduring the podcast, head over to
mattwallerpodcastcom.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Ridiculous History
History is beautiful, brutal and, often, ridiculous. Join Ben Bowlin and Noel Brown as they dive into some of the weirdest stories from across the span of human civilization in Ridiculous History, a podcast by iHeartRadio.