Doug McMillon at Annual Meeting: ‘We’re Building A New Wal-Mart’

Wal-Mart CEO Doug McMillon speaks with Asda employees during the retailer's shareholders' meeting in Fayetteville.

Wal-Mart Stores Inc. of Bentonville is recreating itself to better serve customers in today’s changing world of retail.

That was CEO and President Doug McMillon’s message during his prepared speech at the 47th annual Wal-Mart shareholders meeting Friday at Bud Walton Arena on the campus of the University of Arkansas in Fayetteville. 

Wal-Mart reported first-quarter income of $3.04 billion in mid-May with a 63 percent increase in online sales, a segment the company has spent considered time and money on in the past year.

“We have started to invent the future of shopping again,” McMillon said to a crowd of employees the company estimated at 14,000.

McMillon’s speech capped the meeting that was hosted by country music star Blake Shelton and featured performances by The Band Perry, Ne-Yo, Mary J. Blige and Gwen Stefani. 

Video: Watch the shareholders meeting here.

Chairman of the Board Greg Penner said the company couldn’t get comfortable or slow down as it delivers the “future of retail.”

“We have a lot to celebrate,” Penner said. “Our company is moving in the right direction. Wal-Mart is well-positioned for the tectonic changes in retail.”

Some of that positioning includes a new trial associate delivery program the company announced Thursday. The program, which will be tested in two New Jersey stores and one in northwest Arkansas Wal-Mart didn’t identify, would allow store employees to deliver goods to customers who had ordered products online.

The thinking, according to Wal-Mart e-commerce CEO Marc Lore, is that 90 percent of U.S. residents live within 10 miles of a Walmart store, and many of those customers could be served by employees returning home from work. Lore was the founder and CEO of e-commerce startup Jet.com, which Wal-Mart acquired for $3 billion in 2016.

McMillon also promoted the company’s free two-day shipping program, pointing out that it doesn’t require a membership fee, a clear reference to Amazon. Wal-Mart already offers a discount for online items purchased for customers to pick up at a store, and the company announced plans to have automated pick-up at stores.

“We’re experimenting and we’re inventing,” McMillon said. “We’re doing more than just testing; we’re scaling things like two-day free shipping with no membership fee on millions of items.”

Last-mile delivery is considered the most expensive transportation segment of retail. Wal-Mart officials said 70 to 80 percent of their shipping costs come in the last mile. 

“They’ve always wanted the best prices,” McMillon said. “They want value for their hard-earned money and they should. And, today more than ever, customers expect and deserve to save time. Time is a currency like money. They want an easy, enjoyable experience without friction.

“The historic trade-off between price and service doesn’t really exist any more. We’re creating a better shopping experience for customers and a better working experience for ourselves as we strive to serve them.”

Along that line, Wal-Mart used the shareholders’ meeting to promote the academies that help train store employees for advancement. Wal-Mart said it has about 160 academies in stores with a goal of reaching 200 by the end of the year.

“The secret to our success will always be our people,” McMillon said. “Today, we’re building a new Wal-Mart. As we’re reinventing how we serve customers, we’re preparing you with the latest tools and training to serve them and grow in your career. 

“We will compete with technology, but we will win with people.”

During the meeting, shareholders re-elected a slate of directors that included newcomer Carla Harris, an executive at Morgan Stanley; former directors Linda Wolf and Pam Craig had announced they would not return to the board. The election narrowed Wal-Mart’s board to 11 members.