A perennial Fortune 500 leader, Walmart has built a retail empire predicated on a business model that offers customers a wide assortment at everyday low prices (EDLP). This customer promise is backed by an operating model focused on buying merchandise at scale, fiercely negotiating pricing and maintaining a lean supply chain. The rise of technology has allowed Walmart to adapt this business model, the impact of which is most evident in its eCommerce business.
At ~$14 billion in annual revenue, Walmart’s eCommerce business is one-eighth the size of its most direct competitor’s, Amazon . Despite the growing online industry, Walmart.com has experienced slowing growth in recent quarters (see Figure 1 below) .
Figure 1- Walmart’s eCommerce growth 
To compete, the company has been taking a series of digitally-focused actions, the most extreme of which was this summer’s $3.3 billion acquisition of Jet.com, the largest eCommerce acquisition in recent history (see Figure 2 below) .
Figure 2- Largest eCommerce acquisition exits since 2009 
This acquisition furthered Walmart’s ability to offer EDLP by embracing Jet’s Smart Cart algorithm. Examples of Smart Cart passing savings on to the customer include the algorithm reducing the price on items in the same warehouse as items the customer has already added to their basket or reducing price if the customer relinquishes their right to return an item (see Figure 3 below) .
Figure 3- Jet.com’s Smart Cart technology 
With two-thirds of the U.S. population living within 5 miles of a Walmart , a key component of the customer promise is convenience. To better offer convenience online, Walmart is leveraging Uber and Lyft’s on-demand ride-hailing technology to deliver products to customers instantaneously. Through this partnership, customers place orders online and store employees pack the order and use the on-demand technology to hail a taxi that delivers the goods . Finally, Walmart Labs, a standalone division of the company, is helping advance the retailer’s digital capabilities by “building the next generation of innovations that will influence the behavior of shoppers” (Meet Anand Rajaraman, Sabharwal, 2011) . One such innovation is Shopycat, a Facebook app that uses social media profiles and comments to generate gift ideas . This technology helps Walmart.com customers find products efficiently (see Figure 4 below).
Figure 4- Shopycat screenshot 
Digital technology has also helped develop Walmart’s operational model in-store. In a recent pilot, the retailer partnered with General Electric to install iBeacon technology into overhead lighting. This technology uses Bluetooth communication with customers’ mobile devices to strategically serve up special offers depending on the customer’s location in the store . Additionally, Walmart has rolled out Walmart Pay to all regions, which enables customers to pay at checkout by scanning a QR code (see Figure 5 below), reducing wait time at the cashier. The technology requires use of the Walmart app, which opens up a new avenue of communication with the customer. Through the app, Walmart can better hone customer data to “push” customized content and offers, enhancing the company’s ability to serve its consumers effectively .
Figure 5- Walmart Pay 
Despite these technological advancements, Walmart has an opportunity to adopt digital innovation to an even greater extent to better serve the customer. Walmart can better direct the online customer to product they want at a price they want through the use of Google’s local inventory ads. These ads allow customers to find product at a store nearby and provide price transparency, thereby ensuring the customer can find a low-price that suits them before leaving the house. Walmart briefly experimented with this technology in 2015 but has not embraced it at a large scale . In-store, Walmart can integrate visual search into its app, through a company like Slyce. This technology allows customers to take a picture of a product and match it to merchandise in a retailer’s catalog. If used at the shelf, customers could attain more information on the product and potentially, see special offers, arming the customer with more information before they buy . Finally, Walmart can experiment with “smart shelves”, a technology already embraced at many major retailers. Smart shelves digitally display pricing information at the shelf and allow customers to “click” through to additional detail, like nutritional information (see Figure 6 below). These shelves also have weight sensors that send signals to store employees as inventory runs low . Such technology would allow Walmart to ensure customers can always find product in-stock with the information they need before purchasing.
Figure 6- Smart shelf technology at Kroger
Walmart has taken great strides to enhance is online and in-store operating model and better deliver on its customer promise by adapting digital technologies. As competition continues to grow fierce, the retail giant will need to continue taking advantage of innovation to maintain its position at the top. (799 words)
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