Bentonville, Ark. – Walmart Inc. president and CEO Doug McMillon discussed a range of subjects yesterday at the Morgan Stanley Virtual Global Consumer & Retail Conference.
Much of the conversation revolved around pandemic-driven business – both the gains and the shortfalls.
Home: As e-commerce sales exploded across the year – third quarter online business alone jumped 79% – Walmart.com’s apparel and home business have cut losses on the digital ledger, each generating a positive profit contribution.
Missteps: Asked what Walmart could have done better pre-COVID, McMillon identified lean inventory levels and it capacity for pickup and delivery orders. “We’d been building capacity for years, but the surge here was beyond what we were prepared for,” he said. Year-to-date, the company has added 500,000 people to pick product from stores, most in the U.S.
Inventory philosophy: After 2020’s shortfalls, Walmart does not plan to beef up inventory. “I think on the other side of the pandemic we’ll be right back to managed stock and turns,” said McMillon.
Higher penetration of brands to private label in 2020: “There’s nothing happening there other than out of stocks. I think private brand continues to be import.”
E-commerce acquisitions: Shoes.com and Hayneedle for home called out as Walmart’s more successful digital acquisitions. “The priority was added assortment,” he said. “We picked up a team. We picked up some volume, which meant suppliers cared more about us.”