Nobody can accurately count the number of businesses that have taken serious lumps from Amazon and the wily moves of its CEO. Amazon has been indiscriminate in who it takes from, all the way from mom and pop shops to shops employing millions of moms, pops, and otherwise.
But stories are emerging of retailers fighting back and holding their own, and not just the corner local store.
Including the polar opposite of that, a little company known as Walmart.
I worked for one of Walmart’s top suppliers, Procter and Gamble, for 25 years, so I had many interactions with the Bentonville, Arkansas-based behemoth. I’ve watched them struggle with Amazonian sized challenges to build their online business. Lots of missteps, big acquisitions along the way (like Jet.com), plenty of saber rattling, but still, online total sales crept up slowly and seemed doomed to insignificance.
I sat through many a meeting with buyers/merchandisers who admonished me to up my support of their online efforts, all the while quietly wondering if their e-commerce would ever amount to e-anything.
But then the retailer did something really smart, something on display at SXSW, in fact.
It declared itself a tech company.
That’s right. The same retailer notorious for its memes/pictures/videos of questionable consumers strolling its aisles, the same one based in the deep south with a history of a simple low price strategy and an unsophisticated approach of “piling it high and watching it fly”, thinks of itself as a tech company.
Lest you snicker, in the most recent quarter Walmart posted 43 percent gains in online sales, on top of a 40 percent gain for all of 2018.
To be fair, e-commerce still only accounts for an estimated 3.5 percent of the giant’s total $515.1 billion in sales, but by any standard, it’s impressive growth.
Walmart’s chief technology officer, Jeremy King, told CNBC of his struggles to get people to view Walmart differently:
One of the hardest parts about my job is that people all have their own perceptions of Walmart. For years now, I’ve wanted people to understand we’re building a tech organization. I’ve got a machine learning team. We have some of the best apps in the world.
King is quick to say Walmart isn’t bringing tech just for tech’s sake. They’re deploying shelf-scanning robots to free up associates to interact with shoppers, and leveraging virtual reality headsets and machine-learning powered robots in stores to get online grocery orders to customers as quickly as possible (technology he demonstrated at SXSW).
It’s a massive mindset shift for a retailer that’s been tagged as slow to change at times. Indeed, Walmart CEO, Doug McMillon, keeps a photo on his phone that lists the top retailers over time–the evaporation of the likes of Sears reminds him of what happens when you don’t innovate and adapt to keep up with change.
It’s a philosophy that goes back to the company’s storied founder, Sam Walton, who said, “To succeed, stay out in front of change”. One can argue whether or not Walmart has stayed in front but no one can doubt they are indeed changing.
Their efforts to re-brand themselves as a tech-company offers 3 important reminders for businesses of any size:
1. Clearly define who/what you are, or someone else will do it for you.
I watched Walmart struggle for years on what we called their “ditch to ditch” strategy–swerving sharply from intense focus on Costco as their key competitor, then over to dollar stores, then back to Costco, then over to Amazon, and so on. All the while drifting into a middle ground no-man’s land.
That said, they’ve been consistent over the last decade in their desire to be seen as tech-savvy in a relevant way, and they’re starting to realize its potential.
So take a stand on what you want to stand for and invest behind it, consistently.
2. Complacency and competition will both kill you if left unattended.
I’ve seen so many businesses and brands dashed on the rocks of arrogance.
Develop a healthy paranoia that what’s working today might not tomorrow. Don’t change for the sake of change, change for the sake of surviving and thriving. Keep what you do well and what’s important to your customers. Everything else is negotiable.
3. Change takes attitude and fortitude.
Walmart didn’t become a tech company just because they said so–but that kind of attitude helps implement change. If you don’t believe it, how will your customers? Nor did Walmart change flawlessly overnight. Investors haven’t loved their massive acquisition of Jet.com, for example.
But they keep investing, keep believing, keep learning, and keep improving.
We’ll see how Walmart’s progress (and the relative importance of it) in e-commerce fares over time. For now, let an old dog remind you of new (old) tricks.