Walmart continues to scale up with tech

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In a Sunday morning session fitting the rapid-fire progression of technology, Jeremy King, Walmart’s executive vice president and CTO, fielded a wide-ranging series of questions from Sara Castellanos, reporter for The Wall Street Journal’s CIO Journal. Touching on blockchain, robots, machine learning, virtual reality, cloud services, improved customer experience, open-source software, store connectivity, Black Friday, competing with Amazon and other issues, King painted a picture of a giant not just of retail, but also of innovation and transformation from the inside out.

And how: According to IDC, Walmart is the third-largest IT spender worldwide, behind only Amazon and Alphabet. Over the past year, Walmart’s technology team grew by about 1,700 people, “and we’re going to try to add another 2,000 to my organization,” King said.

He spoke briefly about how it had been two years since Walmart divided its technology organization between CTO and CIO; the idea was to have one element focus on the internal side of the business while the other focuses on the retail side. “Customers, of course, don’t see the difference between Walmart.com and a Walmart store,” he said. “So that integration made it easier not only from an organizational standpoint, but it really made 100 percent sure that we were focusing on our customer.”

It’s hard to articulate a single moment in which it was obvious the restructuring had paid off, King said — only because so many things have improved. “I would recommend it for all retailers, to focus on this,” he said. On the IT side, not only was the technology team combined, but also the global services organization, “and you get all the benefits of colocation and capabilities when you’re dealing with things like AP processing and HR benefits. We have 2 million people that work for us around the world, and if you can colocate your technologists, then you can rapidly iterate.” On the retail side, it “goes across the board” — if a customer uses Walmart Pay in-store, it’s obvious whether that customer shops at Walmart.com as well. It also provides a single view for both in-store and ecommerce teams talking to the same providers.

King spoke of the company’s success in terms of solving customer pain points; for example, the launch of returns for items sold through its online third-party marketplace. This has been “integrated completely into the store,” he said, so customers with returns can have the store ship the products back to the sellers or receive a printed label to do it themselves. “It’s not that those things were impossible before,” he said. “It’s just so much simpler to get those things done now.”

Walmart has invested heavily in machine learning, seeing results in things like easier reorder processes. It uses virtual reality in training, has high-speed internet in all but 80 stores and there’s a new robot system for unloading trucks in which a robot slides into the back of the truck, unloads the crates and helps sort items on the pallet to get them onto the shelves more quickly. That works in conjunction with a shelf-scanning robot that notices when stock is low on individual items so they can be replenished immediately. There are even advances in pre-fill forms for services like pharmacy and money exchanges; there are still a great many people who come to Walmart to cash paychecks and send money to other locations.

With so much innovation in the works, King is inundated with ideas from others: He gets a pitch “every day” about blockchain. But any initiative, he said, has to include a conversation about scale. Most don’t build solutions for a Fortune 1 company, and many would be surprised at how many have choked at the numbers involved.

“I’m always talking to people about, ‘That’s a great idea,’” he said. “‘Now, how do you scale it to 5,000 stores?’”

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