Walmart CEO: Amazon Teaches World What’s Possible, But Physical Stores Here to Stay
- Walmart is still a retail giant; it has 11,000 physical retail stores in 27 countries, and is a $473 billion business.
- The company has “geofenced” its stores, sending prompts and local ads to customers’ smartphones as they enter to shop.
- McMillon sees wearables and connected homes being potentially big categories for Walmart in the future.
- Walmart’s advertising spend on Facebook is actually returning a positive return on investment, McMillon said.
- The company gets “attacked regularly” by cyber-attackers (similar to Target), though McMillon said Walmart keeps vigilant on defending its data.
- Despite lots of negative attention, McMillon said only around 30,000 of Walmarts 1.3 million retail associates make federal minimum wage.
Walmart CEO Doug McMillon admitted that the world’s largest retailer has a lot of work to do on the digital side of its business, but said physical retail stores of varying sizes will continue to be an important part of its long-term plans.
Walmart is the world’s largest company. With fiscal year 2014 revenue of $473 billion, its annual sales easily top those of Apple, Google and Amazon combined.
And the company’s e-commerce sales grew 30 percent to more than $10 billion in the last fiscal year, surpassing Amazon’s growth for the first time in recent memory. But it was only two percent of total sales and just a fraction of Amazon’s — the No. 1 retailer in the minds of a new generation of shoppers lured by the prices and convenience of purchasing anything and everything from the comfort of their couch.
“Clearly Amazon is teaching the world what’s possible,” McMillon said on Wednesday at Re/code’s inaugural Code Conference, playing the role of admiring industry observer more than cut-throat competitor.
McMillon, who has worked at Walmart for more than 20 years, became CEO in February.
“We’re not as aggressive on some things as we should be,” he added. But he highlighted ways in which the biggest retailer in the world has been integrating new ideas and technologies across businesses.
Within stores, Walmart is using mobile technology to give customers the answers to common questions: Is a product in stock? Where is it?
On the subject of home grocery delivery — a hot topic right now in Silicon Valley 15 years after the first wave of companies tackling this opportunity failed — McMillon said that Walmart has been aggressive in this line of business in some overseas markets, but is still in test-and-iterate mode in the U.S.
“We don’t know exactly which geographies it’ll work in,” he said. But the feeling you get from McMillon talking about it is that delivery is a business Walmart will expand.
Still, he talked up the idea of ordering online and picking up in store as a digital option that Walmart shoppers seem interested in. And that response, conveniently, also indirectly shines a light on why physical stores should remain relevant.