What's on the Horizon for Walmart?
Forbes ranked Walmart as the 22nd most valuable brand in the world in 2016. Sam Walton opened the first Walmart store over 50 years ago in Bentonville, Arkansas. Since then, they have been able to scale to over 11,000 stores worldwide. Few companies have been able to maintain growth for as long as Walmart has.
It took 30 years for Sam Walton to articulate the company’s true purpose. In 1992, Walton, in failing health, accepted the Presidential Medal of Freedom from President Herbert Walker Bush. President Bush Sr. had flown to Walmart’s headquarters to deliver the medal in front of Walmart Associates. After the medal had been placed around Walton’s neck, he struggled to stand and made this important declaration that rings true today.
Ultimately, those words provided an anchor for Walmart’s simple but noble mission, “Save Money. Live Better."
Changing Retail Landscape Poses a Threat
With the rise of technology and the changing habits of buyers, the retail landscape is changing drastically. Many brick and mortar stores are struggling to keep up. Walmart isn’t immune and has felt the effects of the rapidly changing industry. In 2016, revenue decreased by .7% and profits decreased by 1.7% over 2015. Amazon has become a chief competitor of Walmart.
What’s on the Horizon for Walmart?
Since 2014, the newest CEO, Doug McMillon, has been facing the challenges head on. McMillon says that it is the “humanity of Walmart” differentiates them from competitors. To fight a formidable foe like Amazon, Walmart is:
1. Reinvesting in their people. Walmart remains true to their original purpose and "Sam Walton’s 10 Principles of Building a Successful Business". Walton understood that investing in people was the key to profits. Walmart has increased wages and continues to develop and train employees. These efforts are translating into a better customer experience at Walmart stores. Walmart can only hope that it will also result in an improved perception of their brand. Many view Walmart as a company that treats employees poorly.
2. Investing in technology. Being anchored in principles and purpose doesn’t mean methods must remain the same. Walmart is heavily investing in technology. Walmart is testing a new delivery service through Uber and Lyft. To enhance its online retail presence, Walmart has recently purchased Jet.com. Investing in technology is the equivalent of investing in customers. McMillon says that globally,
3. Investing in communities. Walmart believes that strengthening local communities creates value for business as well as society.
Walmart is standing on the firm foundation of the past to create a hybrid business model of brick and mortar and ecommerce customer shopping experiences in the future. We'll keep an eye on them to see how well they execute.