7 things you can learn from Walmart about CX

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Every last person working in marketing and customer experience knows about Walmart founder Sam Walton’s legendary quote: “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’s a fantastic illustration of Walmart’s incredible journey of growth and reinvention, always driven by the ever evolving customer. And it’s also why I wanted to investigate here how Walmart keeps transforming itself to keep offering a better CX.

“The most important thing about Walmart is the scale of Walmart. Its scale in terms of customers, its scale in terms of products and its scale in terms of technology”, Anand Rajaram, head of WalmartLabs, once stated in an interview. And we all know 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 no surprise that technology, automation and data are the main fuel of its current reinvention in CX.

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 its spots and uses instore purchase patterns to create a customizable and enjoyable consumer experience.

But it obviously understands the value of online data too: from its website, the Walmart Grocery app (one of the number one shopping apps in North America, in continuous battle with Amazon for the first place) and member data of Walmart+.

Walmart is the perfect example of my “When digital becomes human” concept. It 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 touch-screen tire-search kiosk and a Toy Explorer to the famous Walmart pickup towers. It’s also currently accelerating its digitization 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” which are supercentres with “micro fulfilment centres” in the back to speed up pickup and delivery.

It 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. Walmart is one of the greatest at combining the best of both worlds. And so it offers tons of possibilities that cross the bridge between online and offline. Like the Walmart Pickup Towers which make sure that customers never have to way in line if they have something delivered in-store. Or the Click and Collect online grocery pickup in stores or as a drive-in service. And the Express Delivery in up to two hours, which is up and running in about 1,000 stores and soon available in nearly 2,000 total stores.

The hybrid Scan & Go app allows shoppers to scan items with their phone as they gather them into the shopping cart, then scanning the final total on a self-checkout machine, pay with their phone’s digital wallet and walk out. If an item is out of stock, a shopper can scan its UPC code and add it to their online cart to be ordered later. 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+, then, 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 understand 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.

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 (some for quite some time already) to stay in their own industry’s lane and Walmart is no different here.

Self-driving cars

Earlier this year, it announced that it’s investing in Cruise, GM’s self-driving vehicle subsidiary. About five months ago, the companies started working on a pilot program to use Cruise self-driving vehicles for deliveries in Scottsdale in Arizona. Very recently, they decided to take that relationship to a new level. Investing in their own automated logistics to ensure speedy, safe and efficient delivery makes a lot of sense, obviously.

Financial services

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. And 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.

Healthcare

Walmart already invested in 20 clinics staffed with doctors and dentists that offer affordable dental, x-rays, and office visits. And its 4700 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.

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 and resilient company like Amazon to stay ahead of the market and a lot less obvious for an incumbent like Walmart. And let’s not forget that 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 it’s no more than common sense that you would know your fiercest competition by heart and do anything in your power to surpass them.

In fact, 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.

But perhaps the most interesting concept that I read in my research was Karen Webster’s theory that all of the investments described above, are a sign 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 brick and mortar world.

If you enjoyed this article, please check out my latest e-book ‘The CX leader’s manual to customer excellence’ where I describe the essential basics for great customer experience + 9 more cases like the one in this blog.

You can download the free e-book here!

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