FAYETTEVILLE -- Walmart made clear this week that it is staying true to its roots and the vision of founder Sam Walton, despite a growing emphasis on e-commerce and retail technology.
"We sure appreciate you," a lifelike holographic projection of the company's founder said on stage Friday at Walmart's closing shareholders week event. "Your whole company appreciates you. And together, it will be mind-boggling what we can achieve, if we continue to work and help one another and keep the ideas bright."
Bold changes at Walmart are normal and expected, Greg Penner, chairman of Walmart's board of directors, told the company employees inside Bud Walton Arena.
"Going big, taking risks, never giving up and always succeeding. That's who you are. Now, more than ever," Penner said.
Brett Biggs, Walmart's chief financial officer, echoed Penner's sentiments. Quoting former Walmart president and chief executive David Glass, who sat in the audience Friday, Biggs said Walmart is "laying the pipes" to set the company on the right path for the future. Glass said something similar in 1996, when Walmart first moved into food and grocery sales. Biggs said the same can be said about investments in e-commerce, automation and updated online systems throughout company stores.
"Disrupting and winning is in our DNA," Biggs said.
This year's three-day shareholders event, known for its pomp and circumstance, product updates and touting of company achievements, was capped by host Jamie Foxx in closing festivities at the arena on the University of Arkansas, Fayetteville campus. Thousands of Walmart employees and shareholders whooped and hollered to performances by Jason Derulo, Carly Rae Jepsen, and Cassadee Pope. In between songs, Walmart executives celebrated the company's workers, achievements and earnings.
Walmart reported $500.3 billion in revenue in the recent fiscal year. However, investors have shown caution, concerned about the retailer's big push into online sales. Last quarter Walmart reported net income that fell to $2.13 billion, or 72 cents per share, from $3.04 billion, or $1 per share, a year earlier. The shares have fallen more than 20 percent since January and closed Friday at $82.54.
To retain employees in a tightening labor market, Walmart said this week that it will begin subsidizing college tuition for its U.S. workers, also covering the costs of books and other fees for interested employees. The retail giant is joining employers such as Starbucks, Costco and Best Buy, that already have programs to help employees earn college degrees. Earlier this year Walmart increased the company's minimum wage to $11 and increased parental-leave benefits for store workers.
Joining the international team this year were representatives from FlipKart, an Indian e-commerce company recently purchased by Walmart. The Bentonville retailer agreed to pay $16 billion for a 77 percent stake in FlipKart, Walmart's largest deal on record.
Walmart officials said this week that they needed FlipKart to reach the rapidly growing customer base in India. Chief Executive Officer Doug McMillon admitted the purchase may have been a bit early, but years from now "we'll look back and say 'That was a great investment.'"
Along with FlipKart, Walmart is investing more in experimental e-commerce projects and automated technologies throughout its 4,700 locations. While in testing phases now, the plan is to roll out robots, called Bossanovas, that roam store aisles and scan product inventory. The company also will deploy "FAST unloaders" for storeroom operations.
Walmart introduced a new concierge service this week called Jetblack that allows subscribers to order items via text messages. The items are then delivered that day or the next. Testing has been exclusive to areas of Manhattan in New York City with plans to add Brooklyn this year. Customers, who must be invited to try the service, pay $50 a month, or $600 a year.
After the shareholder event in Bud Walton, members of the media quizzed McMillon about the company's position on rising minimum wages and potential acquisitions.
He did not disclose which companies the executive board is looking at purchasing. Walmart purchased men's apparel company Bonobos soon after the shareholders meeting last year.
In the wake of Costco's announcement to raise its minimum wage to $14 an hour, McMillon said he was "very happy to see wages go up."
In a session Friday with reporters, McMillon shared a story about the time he had to pitch to Sam Walton a product that made artificial fishing lures smell like the real thing. It was his first year working at the home office in Bentonville, and he said standing in front of Walton made him shake and sweat. Little did the young McMillon know his cohorts were hazing him. Once he finished his pitch, he recalled the company's founder said "That's all good and well son, but I don't think fish can smell."
Addressing employees Friday, Walton's hologram ended its appearance saying, "I sure have enjoyed visiting with you." The projection thanked the nearly 14,000 people in attendance and encouraged them to believe in themselves.
"See you again," he said. The hologram then disappeared, leaving behind Walton's name tag that also contained the message that he claimed makes Walmart special: "Our People Make the Difference."
Business on 06/02/2018