Back from Bentonville
Last month I spent a week in Bentonville, Ark., as part of Walmart’s annual shareholders week.
While the week’s events culminate with the annual general meeting, the focus is very much on celebrating achievements over the past year and engaging with global colleagues.
And nobody does it quite like Walmart!
While the retailer’s position as the world’s largest retailer ensures that whatever it does will have scale, the week’s events are pretty impressive.
Store associates descend on Bentonville from almost all of its 10,000 plus global stores. Who else’s AGM interplays financial presentations and shareholder amendments with performances from the likes of Lionel Ritchie and Taylor Swift? So yes it is good fun, but as an analyst there’s quite a lot to learn too.
The event is a great way to get an update on strategy, to hear from each of the country teams and for key business units to provide an insight into their operations and strategic initiatives.
With Walmart’s 50th anniversary this year, there was a significant focus on the legacy of Sam Walton and the characteristics he embodied. Over time, these have been the foundation for establishing a culture which has resulted in successful long-term sales and profit.
Integrity was described as Walmart’s “bedrock”. In his keynote speech, Walmart’s President and CEO, Mike Duke also stressed the enduring values of opportunity, family and community, purpose and responsibility.
One of the areas that really excites me is global e-commerce. The team has some interesting initiatives that are being planned and tested, and the retailer has made incredible progress in this space in a very short time.
Through its base in California, it is building significant talent and technology capability helping it advance its mix of e-commerce and social media. Walmart has already achieved success through harvesting the social media feeds of its shoppers to influence decisions about product ranges and identify new product opportunities.
From an operational perspective, shoppers in the U.S. are recognising that Walmart has lowered prices, increased the product range and improved on‐shelf availability.
Adding new opening price point products has filled gaps in ranges, while stronger alignment between merchandising and marketing has enabled stronger communication of its price strategy.
This year, Walmart’s international operations are concentrating on making the existing businesses stronger. The focus is on getting markets ready for conversion to its Every Day Low Cost and Every Day Low Price model and leveraging its scale, in procurement, as well as areas such as format development and in-store processes and systems.
Driving productivity improvements and applying best practice, including improving the flow of merchandise, offers Walmart a huge international advantage to lower inventory levels, while improving service to its shoppers.
While there was a significant amount of insight to digest, the key points from the shareholder meeting for me were:
*The U.S. business is firmly back-on-track, out of recovery and focusing on growth
*Internationally it’s about improving existing operations while also continuing to expand, but at a slower rate, in major markets such as Brazil and China
*In terms of the digital revolution, Walmart is working on building on its existing strengths in pricing, brand, ranging and its extensive store estate to deliver an industry-leading proposition