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Wal-Mart Embraces Change at Meeting, Hitching Up With Uber

3 min read

Wal-Mart Stores Inc. of Bentonville will start a test program in cooperation with services such as Uber and Lyft to deliver purchases to customers.

Wal-Mart CEO Doug McMillon made the announcement during his prepared remarks at the company’s annual shareholders meeting Friday at Bud Walton Arena on the campus of the University of Arkansas in Fayetteville. Wal-Mart later announced the delivery program would be tried first in Denver and one other market.

“We’ve rolled out online grocery pickup in nearly 40 markets,” McMillon said. “We’ve recently made announcements about unlimited two-day shipping option from Walmart.com and the rapid expansion of our online assortment. We’re excited to announce we’re working with Uber and other innovative partners to test deliveries to customers.”

Video: Watch the 2016 shareholders meeting here.

Wal-Mart Chairman Greg Penner, in his opening comments, said Wal-Mart is changing with the economic and shopping landscape, just as it has done throughout its long history.

“Wal-Mart is changing, too,” Penner said. “Wal-Mart has never been afraid of change.”

Neil Ashe said the delivery service would be accessible through the Walmart app on smartphones and tablets when customers place orders. Ashe, the company’s CEO of Wal-Mart Global e-Commerce, said fees for the delivery would be included in the purchase. He said the service is a response to the modern customer’s desire to get what they want and have it show up when they want to.

“Fees are Wal-Mart-charged to customers based on delivery prices,” Ashe said. “We’re trying to commit on those things the customers need on a regular basis.”

McMillon said Wal-Mart will also roll out Walmart Pay to every store nationwide by the end of June. The program, which allows customers to pay for purchases through a smartphone app, was initiated in December.

e-Commerce Journey Underway

The announcements emphasized the point of McMillon’s address, which spoke to the next chapter in Wal-Mart’s growth as a retailer. Customers’ increased use of the internet and mobile devices has brought retailers such as Wal-Mart to a crossroad.

“The internet, mobile devices and the use of data have made new and exciting things possible,” McMillon said. “Some we can already see happening as e-commerce grows, smartphones change our lives, self-driving cars and virtual reality begin to appear, and digital assistants like Siri begin to connect us to information using only our voices.

“It feels like if we can imagine it, we can do it. What does that mean for us? It means we have the opportunity to re-imagine retail, again.”

One important step to that is Wal-Mart’s attempt to keep up with competitors such as Amazon. Growth in Wal-Mart’s e-commerce division slowed in the past quarter, but McMillon later said during a question-and-answer session with the media that he wasn’t concerned about its progress.

“There are a number of fundamental building blocks that have to be in place,” McMillon said. “We’re working on building our assortment [of offerings]. Until all that, we won’t aggressively market Walmart.com. It’s just a journey to put all those pieces in place.”

Wal-Mart also stressed its focus and effort to improve the freshness and selection of its grocery items.

“We’re proud to be the world’s largest grocer,” said Greg Foran, CEO of Wal-Mart’s U.S. stores. 

The transformation isn’t complete, Foran said later during the Q&A, but he’s optimistic.

“We’re reasonably happy with the progress we’re making with food, generally,” Foran said. “Give or take a bit, we’re heading in the right direction.”

In January, Wal-Mart announced it was closing 269 stores, including 102 Walmart Express locations. McMillon said during the Q&A that it was part of the company’s plan to focus on its profitable stores, such as Supercenters, Neighborhood Markets and Sam’s Clubs.

“We needed to focus; We can’t do everything,” McMillon said. “We don’t have to be in every store format.”

During the meeting, shareholders re-elected a slate of directors, and approved a new addition, Steuart Walton, the grandson of Sam Walton and son of Arvest Bank Group Inc. Chairman and CEO Jim Walton.

Four board members, including Jim Walton, had announced they would not stand for re-election. The results shrank the Wal-Mart board from 15 members to 12.

“We’re going to be smaller and nimbler,” Penner said.

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