innovation has powered walmart’s success · innovation has powered walmart’s success $1 $10...
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2Note: List not exhaustive
Innovation has powered Walmart’s success
$1 $10$100
$200
$300$400
$500
1960s 1970s 1980s 1990s 2000s 2010s
Walmart sales(in billions)
• Mr. Sam opens first Walmart in 1962
• Strategy built on unshakable foundation: the lowest prices anytime, anywhere
• Pharmacy
• DC computers with “virtual memory”
• Electronic cash registers
• Company-wide computer network with merchandise ordering systems
• Supercenter
• Computerized point of sale systems
• Handheld shelf-scanning terminals
• Satellite network
• “Store within a store”
• Rollback America
• Retail Link vendor support system
• Walmart.com
• Neighborhood Market
• International division
• Data exchange with suppliers
• Radio-frequency item tracking
• Sustainability goals
• $4 generic drugs
• Site to Store service
• Small store formats
• @WalmartLabs
• Grocery pickup and delivery
• Walmart Pay
• Unattended delivery
3
Sam Walton’s 10 Rules for Building a Business
1. Commit to your business
2. Share your profits with all your associates, treat them as partners
3. Motivate your partners
4. Communicate everything you possibly can to your partners
5. Appreciate everything your associates do for your business
6. Celebrate your success
7. Listen to everyone in your company
8. Exceed your customers’ expectations
9. Control your expenses better than your competition
10. Swim upstream
Innovation begins with our associates
Innovation from our associates is part of our DNA
4
Retailers rise and fall over time – innovation needed to stay ahead
1970 1980 1990 2000 2010 20181.
2.
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5.
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7.
8.
9.
10.
Source: BloombergNote: Rankings based on U.S. retail sales in retailer fiscal year that best aligns with calendar yearRankings exclude: PBM for CVS, pharmaceutical wholesale for Walgreens, AWS for Amazon
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Four trends driving innovation with connected, empowered customers
Changing Consumers
§ Urbanization§ Aging Population§ Rising Millennials & Gen Z§ Rise of the Individual§ Growing Income Disparity
New Consumption Patterns§ Focus on Health & Wellness§ Desire for Convenience§ Demand for Personalization§ Shift to Services & Experiences§ Importance of Social Media
Tech Advancements
§ Mobile World (5G)§ Internet of Things (IoT)§ Advanced Robotics§ 3D Printing§ Autonomous Vehicles
Structural Shifts
§ E-Commerce Accelerating§ Continued Consolidations§ Direct to Consumer Models§ Economic Power Shifts§ Resource Scarcity
Source: World Economic Forum
6
Our competitors are moving quickly and testing variety of initiatives –here are some recent examples
AI-driven fashion recommendations
Shop-in-shop test with Kohl’s
On-demand delivery
Fast fashionprivate label
Health clinics expansion
Home decor category expansion
Chronic care management
In-store cryptocurrency
7
In particular, Amazon is always evolving…
Source: Bain
8
…as it continually innovates to enter new categories and businesses (even though not all are successes, they test and learn)
* = EstimateSource: Bain
/ NOT EXHAUSTIVEAmazon’s Products and Services
Abandoned
9* = Partnership or joint venture
Walmart is also growing assets and capabilities beyond core retail
First party eCommerce MarketplaceStores
Fina
ncial
Se
rvic
es
Logistics
Social / Loyalty
Digital
Entertainment Home and Seasonal Services
Health and
Wellness
Adve
rtisi
ng
10
Our long-term Walmart US omnichannel strategy is to consistently deliver a winning value proposition for our customers
Grocery & Consumables
Made easy and fast in a way that deepens our relationship
with the customer
General Merchandise
Meet our customers’ most important needs in key
categories
Consistently deliver a winning value proposition for our customers
Services
Simplify access and affordability for customers
Omnichannel: fully-integrated shopping experience uniting customer experiencesfrom our stores to our app and everything in between
11
We need to understand our customers to better serve their needs –busy families are looking for ways to save time and money
MAJORITYcite money & bills as biggest source of stress in their lives
LESS LIKELYto say they’ll spend time to
save money
MOST LIKELYto consider customer service
in their purchase decisions
THEY NEED TO KEEP TO A TIGHT FAMILYBUDGET
THEY NEED TO REDUCE THEIR TIME SHOPPING TO MAKE TIME FOR OTHER NEEDS
THEY NEED ACCESS TO THE BEST POSSIBLE QUALITY & EXPERIENCE
Example Pain PointsNervous they will forget
something and wish there was an easier way to list out what they
need every week
Frustrated they will have to make another stop because Walmart didn’t have what they wanted
Overwhelmed navigating store and finding forgotten
or last minute items
Impatient and stressed byparking lot, checkout line,
return line, etc.
30% List “offers the best pickup / delivery” as key purchase criteria
55% Say owning quality brands is important to them
68% Set a budget when shopping
12
We continue to test different initiatives to bring our strategy and customer value proposition to life
Grocery & Consumables General Merchandise Services
Next Day Delivery
Unattended Grocery Delivery
Express Money
Services
Express RxAutomated
Click & Collect
CurbsidePickup
Store MapsInventory Scanning
RobotEasy Returns
/ NOT EXHAUSTIVE
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