To kick off the day at the CEO Summit hosted by Wharton’s Baker Retailing Center and RLC Global Forum in New York City on Tuesday, Walmart’s CEO, John Furner, sat down with Matt Shay, president and CEO of the National Retail Federation (NRF), to discuss the superstore gargantuan’s strategy for a changing consumer; supply chain issues and more.
The changing consumer
Furner and Shay said the intersection of a changing media landscape and the impacts of inflation—despite deflation in some categories—has caused the consumer to have a different outlook on shopping, both in general and for holiday 2024.
In response to those changes, Walmart has worked to keep up with what consumers seek.
“The last four or five years have shifted the way we believe that people think about inspiration, so that leads you to, how do you get to become culturally relevant? Meet consumers where they are. We’re spending a lot more time looking for the influencer…[or] the storyteller that can get our great product…in front of our consumers,” he told Shay on the stage.
He went on to say that he believes generative AI could soon aid consumers in discovery at a higher level.
“Generative AI assistance will be really helpful in the future, to understand more of a transactional history—to know the time of year you have a birthday or an event in your life. We’ll be able to intuitively help customers get to the next best thing for them,” he said.
Continuing to make the shopping experience easier for consumers—whether through a generative AI-powered chatbot or otherwise—could increase demand for seamless experiences. Furner imagines that the convergence of technology and a shopping environment increasingly tailored directly to the consumer will cause shoppers to focus more on high-importance purchases, rather than mundane purchases.
“I think the consumer is going to continue to want less and less friction. They’re going to want to spend less time on basic activities and basic products. They’re going to spend more time figuring out what to wear, what to dress their kids in or what costume they’re going to put their dog in in a couple of weeks for Halloween,” he said.
Supply chain operations
To help its customers streamline their shopping experiences, Walmart has been innovating on its last-mile delivery and fulfillment strategies, both when it comes to same-day purchases made online and on shipped orders that arrive within a few days of the consumer purchasing a product.
Furner said the Bentonville big dog has been able to do that with the help of its existing infrastructure, both in terms of stores and logistics centers.
“The cost of the last mile is always more expensive than the first [or] middle mile, so being able to deploy inventory in real time…is a big advantage. You don’t want to go as far as turning your stores into a fulfillment center…so we’re doing more and more fulfillment in logistics centers and sending consolidated packages using the store as a flow through,” Furner said.
In its warehouses and stores, it also uses technology, including AI, to help make associates’ time more efficient. Rather than walking thousands of unnecessary square feet in a day, technology can help assign tasks in specific areas of the warehouse or store as needed, depending on where employees already are.
As Walmart continues to evaluate how best to reach consumer demand in real time, it has, like most other retailers, had to deal with unprecedented challenges—from the Covid-19 pandemic, to natural disasters and beyond. Having solid infrastructure can help consumers gain access to necessary products, whether extra winter clothes or a surplus of groceries for a storm, in a more efficient way.
Furner said the short-lived East Coast port strike and two recent weather events, Hurricane Helene and Hurricane Milton, showed how quickly information can spread to consumers, subsequently causing higher rates of buying than normal, which could cause inventory imbalances that retailers need to have systems in place to account for.
“This is a reminder that, in our industry, things move much quicker than they used to, and events can disrupt you much quicker than they used to, because information moves so quickly,” Furner said. “That day that the ports stopped working was [a] Monday night, and by Wednesday, we were hearing reports of panic buying in Seattle and [on] the West Coast; things just move so quickly. We have to be ready for anything.”
Election 2024
During the discussion, Shay asked Furner about the upcoming presidential election in the U.S., a close race between Vice President Kamala Harris and former President Donald Trump. Shay said NRF has not and will not endorse a presidential candidate, but asked Furner whether he had any perspective on either of the candidates’ key issues and platforms.
Furner did not make mention of either Harris or Trump’s policies, but said what matters most to Walmart is that its supply chains flow well, in turn allowing it to bring in goods it can sell to consumers at a fair price.
“If [an] issue, whatever the issue is, could cause prices to go up, then we would generally try to resist that. I understand why you need tariffs and other things…but if costs are going to rise and flow through the consumers, then we’re going to try to do whatever we can to try to keep our prices low,” Furner said. “It’s a complex issue, but from the most simple standpoint, we want to look after our customers, look after our associates, pay a fair [wage], charge a fair price.”
