Will Walmart’s next-gen store fly with shoppers?

Discussion
Photo: Walmart
May 16, 2017
Matthew Stern

Walmart seems to be trying to shed its old-fashioned, spartan image while still maintaining a low-price appeal. The latest example of this can be found in the next-gen store layout the company is piloting.

The new store layout is being piloted in two supercenters, one in Texas and another in Florida, according to Walmart’s blog. The stores feature such technological enhancements as:

  • Interactive technology that projects images onto tables and walls, allowing customers to get product information;
  • In-store touchscreens that allow shoppers to buy online-only items, pay for them along with the rest of their order and then pick up the online-ordered items two days later;
  • Touchscreens at the deli that allow for scheduling of orders so that customers can shop and return when their food is ready;
  • Wi-Fi connected call buttons to page store associates.

The layout also includes previously-piloted features — Scan & Go and drive-thru pickup.

The pilot format is one of a number of steps Walmart has taken to better address its customers — and its competition —in today’s retail environment.

In 2016, the company acquired Jet.com to expand its e-commerce presence, presumably to compete with e-tail juggernaut Amazon. Earlier this year Walmart acquired online shoe retailer ShoeBuy as well as indie apparel brand ModCloth. The ModCloth deal proved controversial with many of the brand’s fans expressing online outrage at the corporate takeover of a mom-and-pop brand.

Walmart has also launched a tech incubator called Store No. 8 meant to help build retail tech startups. This had led some to suggest that the company risks alienating its core shoppers with too much technology.

Walmart is one of a number of discount-oriented chains trying to enhance their appeal with new store layouts. Aldi began rolling out a new store design meant to resemble more upscale organic grocers like Whole Foods.

Target is also looking at new store designs to spark its business. The retailer began rolling out small “flexible” concepts to better fit the local needs of urban shoppers near university campuses and other prime locations. It has also opened a drastically redesigned prototype store with two entrances — one leading to a department store-like side and the other to a section of the store with grocery grab-and-go options. 

DISCUSSION QUESTIONS: Will Walmart’s new next-gen store layout both connect with its core customers while attracting new ones? Do you think Walmart will engage in a broad rollout of this concept or limit it to specific markets?

Braintrust
"Once Walmart learns from the pilots and makes any needed adjustments, predict a broad roll-out."
"It’s huge for the industry and is very encouraging to see them marching bravely into public experimentation."
"...what are they doing behind the scenes on the back-end infrastructure and the store network infrastructure to support these new technologies?"

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18 Comments on "Will Walmart’s next-gen store fly with shoppers?"

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Max Goldberg
BrainTrust

Walmart’s next-gen store sounds positively 2000, featuring changes that will make tech-savvy shoppers yawn with excitement. Buy an online-only item at a kiosk and pick it up in-store two days later. The features mentioned may excite some shoppers, but they won’t draw Millennials or Gen Z.

Charles Dimov
BrainTrust

Walmart is doing the right stuff by going into mass experimentation mode. Experiment, then home in on what works best at converting shoppers into purchasing products. Will this latest layout work? I doubt it will be perfect from the start, but there is no doubt that Walmart will change it as needed to make it work.

Great idea on bringing in touch screens for information and as in-store ordering kiosks. Excellent push into really capturing what omnichannel is all about. Keep it going, Walmart.

Michael Day
BrainTrust

Yes, these next-gen store layouts should connect with the most important core customers now and future-forward: Millennials and Generation Z. Once Walmart learns from the pilots and makes any needed adjustments, predict a broad roll-out.

Susan O'Neal
BrainTrust

Even Walmart doesn’t know how new “next-gen” features will impact new and core customer shopping. This is why they are testing the layout, so they find out the answer before their competition. The only advantage these days is staying ahead of the learning curve.

Sterling Hawkins
BrainTrust

I definitely agree with Susan. It’s a test and learn scenario for Walmart as they try to understand how to use technology to better meet the needs of all consumers. Much of their competition (Amazon) is far ahead in understanding what kind of technologies work and how to assemble entirely new retail formats accordingly. Retrofitting old stores and augmenting everything that has always been done with new technology isn’t the answer, but may lead to answers in the future.

Adrian Weidmann
BrainTrust

The concepts highlighted in Walmart’s next-gen store are underwhelming. The deli counter is an area that definitely is worth exploring. Wawa implemented an ordering kiosk back in 2002! Others are just now figuring that out — 15 years later! The deli counter should be integrating shoppers’ mobile device with click-and-collect. While you’re shopping the device will alert you when your food (from the deli or deli’s lunch menu) is ready. This should be expanded to include orders placed from your home or office online.

Art Suriano
BrainTrust

In many ways I see this as a great opportunity for Walmart to reach younger shoppers. However Walmart should not overwhelm customers with too much technology. Moreover Walmart should not put too much onus on the customer forcing them to use technology they may not feel comfortable using. Today technology is increasing faster than the average person can grasp and often wants to understand. It has less to do with age than some may think. I am surprised at times with what I see 70-year-olds do on an iPhone while some 20-year-olds don’t shop online. Odd isn’t it? The point is, it’s smart for Walmart to take some risks and test this new concept. However Walmart needs to be careful to not saturate their customers with too much technology all at once. Most importantly, they must remember that the biggest benefit any store can offer a customer is the “human” experience. Some human interaction will still be vital for their success.

Lyle Bunn (Ph.D. Hon)
BrainTrust

I applaud Walmart for assessing ways of adding appeal to the visit experience. The retail approach of “push cart, add items, check out, come again” could use some enlivening. Consumers want to discover, be delighted, learn and interact. And it happens that some brands that are carried on retail shelves see this, align with it and are supportive of retail efforts to improve the visit experience. The most successful of approaches (as proven by analytics) will find themselves widely deployed. On that path is discovery, delight, learning and interaction with new approaches by the retailer. You go Walmart!

Brian Kelly
Guest
4 months 3 days ago

Good for Walmart — it’s a start. This is going to be an iterative process which will never end. It is never-ending because the consumer is constantly changing and, as we all know, the speed of change is increasing. A box designed in 1962 for Boomers is no longer relevant today.

Some, very few, of these tactics will stick as most relevant for 5,000 stores, that’s some serious elasticity. And most won’t. But Walmart is on the path as a learning organization. It seems willing to admit what it doesn’t know. That humility will go a long way in creating a culture that is customer-centric.

At least that is my hope. As consumers, we need a capable opponent to battle Amazon and maintain a competitive industry and increasingly relevant options.

Laura Davis-Taylor
Guest
Laura Davis-Taylor
4 months 3 days ago

I love that they are doing this. It’s huge for the industry and is very encouraging to see them marching bravely into public experimentation. Kudos! My question is if they are putting just as much focus on fixing the more basic challenges. My Walmart is dirty, smelly, stocked with carts that may or may not function and chock full of long lines. I realize that it’s not a new sparkly store format, but we can’t forget that tech-based innovation is a piece of the legacy. How will these new efforts be translated into that legacy? Will they be received in the same way when present in more “standard” stores? Regardless, I’m looking forward to seeing the results.

Come on other retailers, get in there and join them please!

Kenneth Leung
BrainTrust

It’s all about trial and error. I’m not sure about touch-screen based technology given everyone is paying attention to their mobile device, I think that it depends on how much of a store’s customer base is mobile-centric. It is easy to measure this by observing store Wi-Fi usage versus kiosk usage and use that to decide the best way forward.

Joel Rubinson
BrainTrust

Rather than thinking of the specifics, think of the mindset. Walmart is acknowledging that its shoppers are tech savvy and they are following the culture of their shoppers as any great retailer should.

Cate Trotter
BrainTrust

It sounds as though these developments are at the safer end of the innovation spectrum, but that seems like a logical play for a brand that wants to appeal to all shoppers — not just the super tech-savvy. The deli ordering system in particular seems like a useful development — a little like Starbucks’ Order & Pay offering, but it could go further. Having said that, the fact that these are still not common developments suggests that retail in general isn’t thinking far enough ahead!

Shep Hyken
BrainTrust

No doubt, there is a next-gen retail movement — not just with Walmart, but with all retailers. With all the new technology coming out that enhances the customer experience, retailers will have to be careful what they choose. Here is what Walmart will consider. Does it enhance the customer’s experience AND increase sales.

Several years ago a Harvard Business Review article was written about Walmart’s concept stores. They listened to customer feedback and built several stores to those specs. Customers were surveyed about their experience and most felt it was better. But, and this is the most important part, there was no increase in revenue. That is where the rubber hits the road.

Larry Negrich
BrainTrust

I would keep trying to find ways to interact via the phone of the shopper and not waste resources on signs and displays. Tying all channels together as seamlessly as possible as they are doing is positive; 2-day pickup is interesting, but optional home delivery (with a cost) should be available.

Ricardo Belmar
BrainTrust

For many of us that often discuss retail innovation, much of what Walmart is testing seems very basic and oh so 2000s era. It’s certainly a step in the right direction, and the fact that a brand like Walmart is seriously experimenting with new technology in-store should be a wake up call to retailers who haven’t even taken that step. Maybe Walmart recognizes that they have to walk before they can run and if they did run it might very well alienate some core customers! This is a sensible approach if not a purely innovative one.

A better question we could ask is what are they doing behind the scenes on the back-end infrastructure and the store network infrastructure to support these new technologies? That’s an “unsexy” area in need of innovation by most retailers!

Shep Hyken
BrainTrust

Retailers must keep up with the times, and that includes Walmart. A “next gen” store layout is important as Walmart (and any other retailer) must keep up with competition, changing expectations, etc. However, I believe that Walmart will be careful about their upgrades. There must be ROI on their investment.

Several years ago, the Harvard Business Journal had an article about Walmart’s new concept store. Walmart surveyed their customers and made changes that were suggested by many. The result was a better looking store; cleaner, more space, better lighting, etc. Oh, and there was one other important result: No increase in sales.

There is a balance. You can’t sacrifice the customer experience if it hurts sales. However you still need to be competitive and keep up with “the times.” However, the cost must also come with some benefit in the form of ROI. That’s where, as they say, the rubber hits the road!

Franklin Chu
BrainTrust

It is better to try something than do nothing. With the threat of Amazon looming, Walmart is actively testing the market with new technology to appeal to the next generation’s curiosity to understand the needs of the market. Similar changes also exist in China: with the growing popularity of mobile shopping and mobile payment, many retailers and restaurants are adding new technology in-store.

For example, KFC in China has their original counters and customers can also order from in-store touchscreen technology and pick up their food directly from the counter. Consumers can also use KFC’s WeChat account (WeChat is the biggest social app, like Facebook in China), pre-order and schedule the time they want to pick up the food from the restaurant. The use of mobile payment also links customers to their membership system where the brand can constantly push promotions to existing customers. This technology for omnichannel personalization maximizes retail companies’ chances to acquire and retain customers.

wpDiscuz
Braintrust
"Once Walmart learns from the pilots and makes any needed adjustments, predict a broad roll-out."
"It’s huge for the industry and is very encouraging to see them marching bravely into public experimentation."
"...what are they doing behind the scenes on the back-end infrastructure and the store network infrastructure to support these new technologies?"

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