Warning from Walmart CEO: Evolve or Die

Walmart CEO Doug McMillon

By Alan Wolf, YSN

More than 55 years ago in The Times They Are a-Changin’, Bob Dylan sang that “The first one now will later be last.”

His words would prove particularly prophetic in retail, where onetime giants like Wanamaker’s, Marshall Field’s, W.T. Grant and Montgomery Ward have long since departed, and were echoed by Walmart CEO Doug McMillon at a recent CNBC leaders-in-business event.

Speaking at the network’s Evolve Summit on Nov. 19 in Los Angeles, McMillon said retailers can’t afford to rest on their laurels, and that even behemoths like Walmart – the largest retail chain in the world – “could go away at any minute.”

“Retailers come and go,” he told interviewer Becky Quick, co-anchor of CNBC’s Squawk Box. “History’s very clear. So your only choice is to adapt and change, or perish. We’d kinda like to avoid that.”

As a constant reminder, McMillon keeps a photo on his mobile phone of the top 10 U.S. retailers by decade, going back to 1950. The majority are long gone.

“It’s really simple,” he told the audience. “If you’re not meeting the wants and needs of the customers, you’re done. There’s not a lot of loyalty here; this is a transactional relationship to some extent. We hope to make it more than that.”

To do so, and to stay ahead of the competition, the company has poured billions of dollars into its eCommerce and fulfillment operations; raised the salaries and improved the benefits of its sales associates; and is pushing the boundaries of retail with a wide range of pilot projects. Among the latter:

  • Robots that patrol the aisles and scan shelves for stock-outs, misplaced items and missing labels;
  • A space-age Sam’s Club in Dallas that features scan-and-go checkout, in-store navigation, and augmented reality (AR) product descriptors that seemingly leap out from the packaging;
  • An in-home grocery delivery service, currently being tested in three markets; and
  • A Walmart Health Center, adjacent to a Walmart superstore in Dallas, Ga., that has a doctor and dentist on duty, provides lab tests and mental health services, and is often less expensive than insurance company co-pays, McMillon said.

The CEO, who began as a Walmart warehouse worker, conceded that the company has made “plenty of mistakes” along the way, especially in eCommerce where losses are reportedly projected to exceed $1 billion this year.

“Walmart is not arrogant,” he said. “If you’re not willing to fail – and we are failing at some things – you’re going to go away.”