#NRF2019: Major structural transformation in process at Walmart

Walmart is in the midst of wholesale structural change as well as making massive technology investments as it pursues its digital transformation agenda.

Speaking at NRF 2019 in NYC this week, Jeremy King, CTO of Walmart, detailed how the company had not only split its technology structure but that it was also placing unprecedented levels of investment in cutting edge technologies to position it strongly against the likes of Amazon.

Beginning two years ago Walmart split its technology into the IT side – involving its internal aspects – and a retail technology side that has brought together stores and eCommerce. The latter is headed up by King who says it reflects that customers do not differentiate between eCommerce and stores – it is all seen as Walmart to them.

This combining of the areas has made it much simpler for the company to integrate its channels:

“When a person returned an item into store that they had bought online then it had to go to the ‘marketplace’ part of the business but now it’s integrated it is so much simpler. Customers want a digital experience and it’s no longer acceptable to have a non-digital experience in store.”

Robotics and machine learning 

With this combined structure in place Walmart is investing big in new technologies to sit atop this foundation. It committed $11.7 billion in 2018 – the third largest for any company behind only Amazon and Google parent Alphabet. This involves commitments to robotics, which is part of the “transformation in the automation of processes” that includes robots to unload trucks at stores and Shelf-scanning robots in-store.

He is adamant that such developments will not affect the workforce and highlights that 1,700 people had been added to the technology team and that 2,000 more would be added. In addition 30,000 new jobs have been created for grocery delivery and pick-up in-stores.

Machine learning is also a major focus with one area involving speeding up the time it takes for customers to build their online basket. “There could be 50-100 items in their cart so how can we make it quicker for them to create this. It could be brought down to seconds with machine learning,” he suggests.

The one thing that can stymie machine learning and artificial intelligence is the lack of data but in Walmart’s case he says it has the advantage of having a richness of data that very much helps in this area. “We can use this for personalisation and for optimising routing.” One area King is focusing on is not building new algorithms for its own sake but instead ensuring that his team concentrates on making the existing algorithms better.

He forecasts that machine learning will really transform retailers when it is undertaken in the cloud and believes it will give retailers access to data in new ways across their businesses, which will have a “dramatic effect”. Utilising the cloud more is certainly on the Walmart agenda as it builds out its recently agreed partnership with Microsoft and its Azure cloud solution.

“Most eCommerce and customer facing aspects are going that way. We’re testing 25% of our systems for this and we’ll go dramatically that way this year,” says King.