How Walmart Could Look Very Different In 10 Years
Walmart is one of life's constants, the reliable go-to that remains open and operating as normal, even during a worldwide pandemic. When Amazon started seriously gaining traction as a competitor, Walmart found itself in danger of being relegated to dinosaur status. As The Motley Fool notes, back in 2016, the store was in a predicament, having fallen behind Amazon significantly in the world of e-commerce. Walmart was forced to consider whether it wanted to compete with the mega-corporation or commit to being simply the greatest brick-and-mortar business around.
After investing $3.3 billion into buying Jet.com (another e-commerce site) and putting its CEO Marc Lore in charge of Walmart's U.S. digital operations, it seemed clear that the retail giant wasn't playing around. The move forced major changes at the company, leading Walmart to cease charging for the delivery of orders over $35 and to re-jig its supply chain accordingly. Looking to the future, though, will Walmart continue to make changes to run with the big dogs, or are its days at the top numbered?
Walmart knows it needs to evolve to survive
In a statement last year, Walmart's CEO Doug McMillon said that his company must "to do more and move faster" and "to drive a deeper, more sustainable relationship with the customer, better execute the fundamentals, and improve the overall economics of the business." (via Forbes) And he was a little more to the point when later speaking to CNBC: "We could go away at any minute."
However, the retail giant can be commended for working to change its practices. By taking risks with different innovations, keeping the ones that work and ditching those that don't, it has become a real competitor once again. As The Motley Fool advises, Walmart was already utilizing curbside pickup and at-home grocery delivery when the COVID-19 pandemic gripped the nation. Its two-day shipping offer was also a major boon for customers stuck at home. Plus, the company's online grocery business has been a success, and it's working to offer a much larger selection of merchandise online (via CNBC).
Walmart still cannot compete with Amazon when it comes to shipping, though, with just a few million items currently available for two-day delivery compared to over 100 million being offered for delivery in just one day by Amazon. However, Walmart offers its service free of charge while Amazon charges annually for its Prime membership.
Walmart's future could depend on its online success
Walmart has made boosting e-commerce sales a priority, and customers are responding positively. In a separate report from CNBC, Morgan Stanley analyst Simeon Gutman said: ""Walmart.com seems to be changing the conversation among shoppers ... Walmart's progress indicates that it's broadening its customer base. What Walmart stood for five years ago is different today. Now they'll be seen as a broad-based consumer market like Amazon, not a discounter."
For now, The Motley Fool reports Walmart is set up for continued growth, with McMillon confident that fourth-quarter earnings showcase the company's staying power. By implementing the necessary changes while staying true to its core values, Walmart has made itself an essential resource for a loyal customer base. Ten years from now, all going well, it should still be a fierce competitor.
McMillon explained the company is well aware that customer needs come first and even keeps a copy of Forbes from the '90s on his desk to remind him that it could all go away in the blink of an eye (via CNBC). As far as the ambitious CEO is concerned, if Walmart is to continue growing as a business, it must adapt to the changing world accordingly.