What can we learn from Walmart's customer experience evolution?by
In 2018, Walmart appointed its first chief customer officer. Two years later it restructured so that the CCO oversees marketing. But there are many other examples of how Walmart continues to evolve its customer experience strategy.
Anyone working in customer experience will know the famous quote from Walmart founder Sam Walton: “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” It is a fantastic illustration of Walmart’s journey of growth and reinvention, always driven by the ever-evolving customer.
One of the key strengths of the company, however, is that with great scale comes great data. The retail giant collects about 2.5 petabytes of unstructured data from 1 million customers every hour, so it should be no surprise that technology, automation and data are the main fuel of its current reinvention in CX.
So what can we learn from Walmart's customer experience evolution?
Follow the data
Predicting and managing the supply chain in the most accurate and efficient of manners became an enormous asset to offer the best customer experience in the COVID-19 era. And so the retail giant has successfully invested a lot in creating an intelligent flow in a fully-integrated data system. An example are the “internet of things” sensors across over 2,200 trailers to give real-time information around the quality and freshness of its deliveries.
The beating heart of Walmart, of course, lies in its stores, and so it would never make the mistake of only measuring online traces: a physical store uncovers motivations and buying trends you wouldn’t necessarily uncover online. And so it spots and uses instore purchase patterns to create a customisable and enjoyable consumer experience, along with online data from its website, the Walmart Grocery app and member data of Walmart+.
Walmart continuously tries to expand and update the automation of recurring services in order to be able to focus on the human side when it’s needed the most. It’s all about convenience, speed and helping customers save time: from a touchscreen tire-search kiosk and a Toy Explorer to the famous Walmart pickup towers.
The company is also currently accelerating its digitisation to create “smarter stores”, with shelf scanners to monitor product volumes, robotics and computer vision cameras to increase efficiency and contactless payment. At the same time, it’s piloting “hybrid locations” with “micro fulfilment centres” in the back to speed up pickup and delivery.
Walmart also invested in augmenting human intelligence with the Ask Sam voice-assistant app, which was designed to help associates better serve customers and do their jobs more effectively.
Retail lives both online and offline. There’s no way around it, and Walmart is one of the greatest at combining the best of both worlds.
Walmart Pickup Towers make sure that customers never have to wait in line if they have something delivered in-store, with Express Delivery in up to two hours soon to be available in nearly 2,000 stores. The hybrid Scan & Go app allows shoppers to scan items with their phone as they gather them into the shopping cart, then checkout with their phone’s digital wallet and walk out. Walmart even experimented with drone delivery.
And let’s not forget about the deal with Shopify. The latter allowed its merchants to list their wares on Walmart’s website and to expand its capacity to deliver more orders to more customers. The result was that Walmart’s third-party platform, Marketplace, doubled in size last year.
The paid subscription Walmart+ is also a perfect example of blending online and physical shopping experiences: it offers free delivery of online purchases as well as brick-and-mortar benefits such as fuel discounts and streamlined checkout processes.
More than any other retailer, Walmart understands the importance of lifelong learning for its employees to keep up with the ever-changing customers and market. It’s a huge task to train and retrain your 2.3 million associates around the world, of course.
One of the biggest training challenges for Walmart was that associates cannot be trained in the store and so it uses virtual reality as an immersion tool which makes the training more fun, satisfying, efficient and fast. What might require 90 minutes of classroom training can now be completed in 20 minutes.
Enter new industries
This is a dynamic that we’ve seen happening in a lot of the world’s leading and most innovative companies: giants like Amazon, Toyota, Google and Ping An are no longer content to stay in their own industry’s lane, and Walmart is no different here.
Earlier this year, Walmart announced that it is investing in Cruise, GM’s self-driving vehicle subsidiary. The companies started working on a pilot program to use Cruise self-driving vehicles for deliveries in Scottsdale in Arizona, but recently, they decided to take that relationship to a new level and invest in their own automated logistics to ensure speedy, safe and efficient delivery.
For years Walmart has offered prepaid debit cards, domestic and international money transfers, bill pay services, tax preparation, instalment financing, and other financial services through its partnerships with Green Dot, NetSpend, American Express, MoneyGram, PayPal, Jackson Hewitt, and other providers. In January of this year, it announced a strategic partnership with fintech investment firm Ribbit Capital to “develop and offer modern, innovative and affordable financial solutions.” Ribbit’s investment portfolio includes well-known fintech companies including Robinhood, Credit Karma, and Affirm.
Walmart already invested in 20 clinics staffed with doctors and dentists that offer affordable dental, x-rays, and office visits. And its 4,700 domestic stores feature pharmacies that also have been effectively dispensing prescriptions at very affordable prices. But recently, it has made the bold move of acquiring telehealth provider MeMD, planning to offer nationwide virtual healthcare services to further advance its ambition to be a market leader in this sector.
Know your competition
It may sound underwhelming, but it’s also very clever of Walmart to follow and sometimes even mirror the paths that Amazon – its biggest competitor - has taken over the past years. In many ways, it’s easier for a newer, tech-driven company like Amazon to stay ahead of the market and a lot less obvious for an incumbent like Walmart. However, second-to-market players tend to have lower R&D costs as they can benefit from the innovations that were pioneered by the first-to-market players, so in many ways it is common sense that you would know your fiercest competition by heart and do anything in your power to surpass them.
Many of the Walmart innovations were inspired by Amazon: Walmart+, its $98-a-year membership plan, for instance, mirrors Amazon’s Prime and under-prices it by about $20/year. Its scan-and-go technology also partly reflects an Amazon concept, that of the Amazon Go stores.
Though it can be dangerous to move as the second, if your company is agile and fast, there can also be a lot of benefits to such a strategy.
Become a superapp
Perhaps the most interesting concept that I read in my research was Karen Webster’s theory that Walmart is striving to become a superapp, similar to those in China, like WeChat: some sort of “interrelated ecosystem of physical and digital”.
If you add all the things described above together, it seems to be pointing in that direction: “the expansion of its third-party marketplace with Shopify; the focus on healthcare via Walmart Health centers; the investments in ecommerce, logistics, supply chain and inventory to match demand with supply and consumer fulfilment preferences; the promise of Walmart+; the JV with Ribbit Capital to provide banking services to its customers and employees; and the availability of BNPL options with Affirm to appeal to a new user demographic.” All of these decisions have been made to move Walmart from a “preferred destination” to the consumer’s “primary destination”, to paraphrase CEO Doug McMillon’s Q4 2020 earnings report.
All in all not a bad ambition for a 59-year-old company with firm roots in the bricks-and-mortar world.