Digital TransformationStrategy & LeadershipWalmart is the world’s largest retailer. Is it also one of the most innovative?

Walmart is the world's largest retailer. Is it also one of the most innovative?

Investments in technology such as blockchain, automation and personalization help Walmart stand up to its stiffest competition, Amazon.

Walmart CEO Doug McMillon has taken to referring to Walmart as a “technology company,” an increasingly common practice for consumer brand executives. Under Armour plans for most of its shirts and shoes to track data in the next three years. TGI Fridays doubled its off-premise business in less than a year thanks to investments in artificial intelligence helping restaurant managers make decisions about everything from scheduling to waste management.

However, Walmart is particularly significant. As Amazon extends its dominance into more verticals—advertising and apparel being two recent examples—Walmart remains the ecommerce giant’s strongest competitor. There are 4,761 Walmart stores around the U.S., at least one of which is within 90% of the country’s population.

A series of poor quarters made Walmart’s future look bleak. The brand has since turned around enough that Gartner’s L2 research firm called it “a digital disruptor” last year. The largest retailer in the entire world, a company that employs more people than live in Paris: a disruptor.

Improving efficiency with automation

Walmart already accounts for more than half the grocery sales in the U.S., with a variety of online order and delivery options. Grocery also happen to be Amazon’s fastest-growing category.

To maintain its edge, Walmart is increasingly investing in automation technology. Robots now do much of the in-store grunt work such as reading picking products for online orders and cleaning floors. Additionally, aisle-scanning robots are currently being tested in 50 stores, scanning shelves to manage inventory.

Walmart aisle-scanning robot

Robotics will also factor heavily into the Southern California grocery delivery center the retail giant plans to open by 2020. Currently, distribution center employees sort items and load them onto trucks. Robots will take on those tasks, assisted by algorithms designed to maximize space on trucks and consider the weight of products. As a result, items will move 40% faster than they do now, delivering produce to stores days earlier.

Cleaning up the food chain with blockchain

Blockchain is another technology that will help Walmart improve its grocery offerings. Currently, contaminated food kills 400,000 people each year. Tracing food from farm to fridge is a complicated process and it can take weeks to identify the contaminant. Applying blockchain to some mangoes earlier this year, Walmart traced the fruit to its original source in two seconds.

Built in partnership with IBM, Walmart’s blockchain platform tracks not only food’s source, but its current location and temperature. By the end of January, suppliers of vegetables such as lettuce and spinach will be required to use it, accessible via centralized mobile app.

Improving Walmart.com with acquisitions and personalization

In the past, ecommerce has been a weak spot for Walmart, one that’s largely been rectified through acquiring companies such as Jet.com and Flipkart. The latter has been referred to as “the Amazon of India” and has contributed significantly to India’s 31% ecommerce growth this year. By the end of fiscal 2020, Walmart estimates ecommerce revenue growth to be about 35% and same-day delivery to be accessible to 60% of customers.

It’s likely that consumers continually buy online because Walmart has made it so much easier. The retailer’s inventory is exhaustive; a search for “shampoo” brings up more than 23,000 products.

Walmart personalization

Earlier this year, Walmart redesigned its website to be more personalized, on both an individual and regional level. Shoppers are now provided product recommendations based on their own browsing history and what’s trending in their respective areas.

If a brand’s website doesn’t recommend relevant products, 47% of consumers will go to Amazon, according to SmarterHQ data from last year. If nothing else, that means Walmart is unlikely to cool off on technology investments.

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