Walmart's U.S. Chief Sees Changes in Shopping -- WSJ
May 21 2020 - 3:02AM
Dow Jones News
John Furner talks about speeding the retail giant's shift to
e-commerce and the pandemic helping to energize a customer
focus
By Sarah Nassauer
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 21, 2020).
When John Furner became chief executive of Walmart Inc.'s U.S.
operations last year, the biggest challenge was Amazon.com Inc.
Now Mr. Furner -- who began his career at the company in 1993 as
an hourly store worker and most recently led Walmart's Sam's Club
-- is leading the largest business unit at the country's largest
retailer during a global pandemic, working to keep stores open and
speed the company's shift to e-commerce.
This week, Walmart reported a 10% jump in U.S. sales during the
most recent quarter, as shoppers stockpiled food, toilet paper and
other household goods. U.S. e-commerce sales rose 74% as more
shoppers switched to online ordering.
In response, Walmart has started using about 2,400 additional
stores to ship out online orders in recent weeks. Walmart's
separate apps for online grocery orders and Walmart.com merged into
a single app this week. Prescriptions are being delivered to homes.
But it has delayed plans to introduce a membership service called
Walmart+ that would include fast home delivery and other perks,
part of efforts to rival Amazon Prime.
Mr. Furner spoke to The Wall Street Journal from Walmart's
Arkansas headquarters, where he and a handful of top executives
gathered for the first time in several weeks to announce
earnings.
Here are edited excerpts:
WSJ: There's been a massive shift online. How long will this
buying behavior stick and how are you adjusting?
Mr. Furner: It would be hard to say exactly how long any of
these changes last, although I believe many of them will be
permanent. We had some periods in the quarter when we saw as much
as 300% growth rates with the [online grocery] pickup business. We
slowed our pickup business while we focused on replenishing and
restocking stores, then we quickly added back pickup slots. We're
at the highest slot level we've ever been, and we are still looking
for more ways to innovate to either add more stores or more slots
per store.
WSJ: How are you thinking about dislodging people further from
Amazon Prime?
Mr. Furner: One of the advantages Walmart has is the store
footprint, and layered on the footprint is the ability for shoppers
to come in, buy off the shelf, pick up or have things delivered.
Customers will continue to come back and return to shop either
online or in-store as long as we deliver. It's really the nature of
being an omnichannel retailer that has helped Walmart in the last
few months.
WSJ: Do you think you've made progress on cracking the Amazon
juggernaut in this period?
Mr. Furner: What's encouraging are the increased reshop rates in
pickup -- [the rate of shoppers returning after trying out the
service] -- and the reshop rates with customers online. One of the
interesting things we've seen is our fastest-growing group of
online pickup shoppers is customers over 50. The
customer-satisfaction scores we track on our pickup business have
held up pretty well throughout the quarter.
WSJ: Is Walmart+ still on the road map?
Mr. Furner: It's on the road map, for sure. We're not quite
there yet. In the last couple of months, the acceleration of change
from our customers is the fastest I've seen it in the U.S. It's
important we continue to build for the future. Walmart+ would be a
part of that.
WSJ: Where is the company culturally when it comes to the
natural tension between the online and offline business?
Mr. Furner: Over the last few months, we brought the two
merchandise teams together. That's had the biggest positive impact
of anything we have done. It helps with supplier relationships. It
helps with assortment management. It helps us with the overall
ability to decide how we want to go to market.
WSJ: What role has the pandemic played in that?
Mr. Furner: The events that followed have helped us focus on the
customer in a way I think is more intense. Many of the differences
we may have had by (distribution) channel have been put aside. If
you were in the Zoom meetings with the teams across the country,
they'll be at different levels of getting along, as far as being
able to approach the business as one team.
WSJ: If this version of reality lasts two years, do you keep
giving bonuses to store and warehouse workers every few months?
Mr. Furner: There's just so much volatility that we decided we
would pull guidance and manage the best we can month-to-month,
quarter-to-quarter.
WSJ: So you're not sure?
Mr. Furner: Right.
WSJ: I'm hearing increased criticism from labor activists and
some politicians over workers getting sick and, in some cases,
dying. Should Walmart and other retailers do more to protect
them?
Mr. Furner: We monitor this all over the country. When a hot
spot occurs, we feel the impact the rest of the community would
feel. We've closed some stores temporarily where we had an
outbreak. We've taken the time to clean, to make sure people who
needed a test had a test. We reopen with every protective measure
we had going into that closure, ensuring we are providing people
with [personal protective equipment]. We meter customers in. We're
closing every night so we can restock and reclean.
We're taking the measures we think are very appropriate to keep
people safe and distanced. We're going to continue these until we
believe there's a time they won't be necessary. I don't know when
that will be.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
May 21, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Walmart (NYSE:WMT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Walmart (NYSE:WMT)
Historical Stock Chart
From Jul 2023 to Jul 2024