Walmart US Holiday Sale Events to Be 'More Digital' Than Ever, Says CEO
Give consumers what they want and let them shop the way they want, said Walmart U.S. CEO John Furner on a National Retail Federation webinar Tuesday, noting retailers must adapt to the different ways consumers expect to shop in uncertain times. COVID-19 accelerated initiatives the retailer had in its sights two or more years down the line, he said.
On the decision to hold three November deal events (see 2010140019) versus concentrated exposure on Black Friday week, Furner said it was a Texas store team’s email suggesting giving employees Thanksgiving off this year, “with all that’s going on,” that put in motion the decision to close on the day that has traditionally been the start of holiday season shopping. “This email caused us to sit back and think, 'We’re not going to be likely in a position where we’ll have a vaccine by that time, or social distancing will be over,'” he said, causing management to “rethink the way we manage the big event.”
That includes the day before Thanksgiving. Store associates who would have worked the previous night to prepare for Thursday shopping will also be off Wednesday night, Furner said. He cited communications from employees saying they haven’t been with their family for Thanksgiving in 25 years "and are looking forward to the day." The three events will give customers time to think through shopping options and whether to buy in store, online, or buy online, pick up in store. “Our events will be much more digital this year than they’ve ever been before,” he said. “Regardless of whether we’re in a pandemic or not, the right answer is give the customers the choice.”
How consumers handle Thanksgiving this year will vary widely, and retailers need to adapt, said Furner. Some families will get together, while others can't due to health-compromised relatives, citing his own family: “For those of us that have kids at home, when we’re out, we keep our distance because we don’t want to be the source of what could cause them to get sick, so each family will handle it differently."
Given the uncertainties that caused Walmart to pull revenue guidance for fiscal 2021 in its Q1 earnings report (see 2005190018), the retailer is focusing on its principles: take care of store associates, serve customers and communities, manage business “and build as we go,” Furner said. Each day during the three November deal events “will be a learn-and-react day, and we’ll figure out how the customer wants to shop.” There’s still a big retail economy, and “people will find ways to spend, and they’ll find ways to shop, and they’ll find ways to celebrate." Halloween will be an early indicator of Q4 consumer behavior, he said, with some expected to celebrate as in years past, some to hold virtual Halloween parties and others in between.
On changes in the supply chain, Furner noted the retail industry has been running on the interstate highway system since the 1960s, when it was built on the ability to move products at scale at a low cost “in ways the world had never seen before." In recent years, supply chains have become “more dynamic, with more routes to be able to deliver to customers.” If parts of the supply chain are “static and focus on one particular thing, and the customer changes, then they could become obsolete,” he said. Retailers who can make their supply chains “more dynamic and have inventory flow in different directions based on wherever the final customer sits -- and can do that creatively in a cost-efficient way -- are going to be the winners.”
Furner compared changes in the retail landscape in 2020 to time he spent with Walmart in China in 2013-2015, when he saw a rate of consumer change “enabled by technology that I probably would not have dreamed possible at such a large scale had I not been there.” A country with a population of 1 billion consumers went from “analog and physical to digital in just a couple years.” That ecosystem, built on mobile technology, showed “how fast things can happen without the constraint of legacy infrastructure. You’re trying to adapt as you move.”
Since the pandemic began, “we think we probably skipped a couple of years, if not three or four years, of adopting one channel and using the other channel to help enable it,” said Furner. How much 2020 adaptation will stick “we don’t know,” he said. “Some things may go back to the way they were; some things probably won’t.” Walmart is focusing short term on being “where the customer is going to go,” he said, though it will be a couple of years after the pandemic “until we can really determine exactly what happened and what it all led to.” In such a situation involving a lot of change, new innovations will "change the way we live and the way we shop in the future.”