Name: Innovation Forum 2024: Understanding The Global Consumer
Uploaded: 2024-03-27
Duration: 15 min 38 s
Description: Kathryn Mclay, President And Ceo, Walmart International In Conversation With Diane Brady, Ceo Initiative, Fortune

Kathryn Mclay, President And Ceo, Walmart International In Conversation With Diane Brady, Ceo Initiative, Fortune

Innovation Forum 2024: Understanding The Global Consumer

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Kathryn Mclay, President And Ceo, Walmart International, In Conversation With Diane Brady, Ceo Initiative, Fortune

I feel like we should start with like a, a Canadian and Australian walk into a ballroom to talk about how an American company is doing in China and the rest of the world. I don't know if the punch line is to that, but you are a global person to begin with. I want to start actually right with the title because you have so much data on customers and the consumers. What difference does the A I make? Can you give us some specificity because we do hear about it so much. You're on the ground, give us some stories and welcome. Well, thank you all for having us here. Um I think Walmart International is in 18 countries. Um We have 500,000 associates, we're serving millions of customers on a daily and weekly basis. And I think what we're seeing is across all of those markets, such different degrees of, I guess maturity. So um if I think about we're in Mexico, um really, we're running an omni channel retail business and the way we engage with customers in Mexico is to put kiosks in our stores because for some people, they don't have digital they don't have the internet. And so that's the best way for them to engage with us digitally. You, you um like, think then about what we're doing in um India, which is a digitally native marketplace, they're very, very different and different degrees of maturity and sophistication. And so I think when I think about the A I journey, um I think there's a lot of talk right now about generative A I, but we have to remember A I has been like in the lifeblood of most organizations for the last, you know, 10 years and um the, the advancements we've made in technology and productivity and engagement with our customers. It's entirely different on the back of really sophisticated A I tools. And so I'm excited about what ja I can bring, but I don't feel like the games just started. I feel like we're actually into kind of the third quarter. Well, it's a good point and you had four years, almost four years at Sam's Club as co before you came to this rule. I think you're what, seven months into this role, by the way, I think one of the most popular tours out of Hong Kong, you may know this is the two day Sam's club tour to Shenzhen. Did you know, have you done that? Well, I have toured the club in Shenzhen and I can understand why it is what it is. I mean, it's a great club. Is it so it's uh the retail Disney, I guess so. But tell me more about what did you learn from that experience that you've brought over to this? Because I, you were talking, we were talking about earlier about how you were deploying A I there. Yeah, I think, uh, I think two things that I learned out of Sam's Club. One was we had a chief technology officer that believed he needed to democratize A I and put it into all of our capabilities, whether it's the um the device that's in an associate's hand when they're working in Sam's Club or whether it's built into the experience a customer has in the app. So I think people just need to, it would be a lot more um conversant with working with A I and we used it typically to be able to work out what are the jobs that people don't like doing and how do you use A I to, to enable them to be um automated. So whether it was inventory management, recording inventory numbers, we put, we put cameras on scrubbers so that we could get a capture of inventory kind of multiple times a day. So I think that we've learned that that really, really works. I think um it doesn't work what doesn't work. Um I think, you know, right now, I think people are um struggling with how to work out what are the best use cases for generative A I and they wanna run at 500 things. So I think what you need to do is work out. What are the, what are the really important use cases that would be useful? How do you make sure you're building trust into engagement with generative A I? And how can you be very deliberate about how you deploy it? But one of the best ways I think to learn how to, to um find the best use cases is to actually ask your associates like it amazes me how many young associates we've got who for them, this is just like, you know, it's like drinking water. It's the, the, the most simplest thing that you could imagine. Um My son is 17 and he actually works at Sam's Club now. And really he comes home, he's at school and he does this like after school and he comes home and he's full of ideas of like mom. I was using it to correlate this data and it came up with this list and it is native for them. And I think we should learn from the younger generation as much as we're doing top down. You know, it's interesting so much of the conversation on A I and I know we're talking about the consumer is a cost, you know, savings to get um employees basically to reduce employee number. I'm curious what you're doing to, you know, first of all, talk about that, but how do you still maintain that intimate experience, you know, how do you make this big company which sometimes can feel like a retail Godzilla, it's so big yet you maintain that local focus and you have to in these different markets. Is that helping? Yeah, look what I would say is I think um we are in this amazing age where we can know our customers in aggregate and we can know them individually. And the only way that you can do that is through data and tech. Um You know, we were talking before about how one of the things that I love about Walmart is it is a large company, but it's just a bunch of people who are trying really hard to help people save money so they can true for all of us, isn't it? We're just a bunch of people working really hard. It's very true companies. Yeah. One of my frustrations often though is companies can feel Impenetrable if I have a problem with a company. And I, I, I'm one consumer amongst many. How do I get them to care about my problem? And so what we wanted to do at Sam's club was reverse that and say actually we work for the customer. And so the customer, how do you do that? You're the CEO of Sam's club, like how do you walk the walk on that? So I think it started like in the first few weeks and just listening to customer feedback and engaging individually with customers and then showcasing that it came to how we use tech. So we use NPS. Um But we also what is MP S net promoter score, net promoter score will give you a customer. Would you recommend us? Yes. But then you can also just synthesize and scrape data across social media and that will tell you real time. What are your customers saying about you? What are they saying about things that delight them? What are they telling you are the things that actually frustrate them and from that you can know them in aggregate. But you also now have the ability to be able to know them individually and personalize their interaction with you. Can you give us some of those insights? Let's start with China. I know you're not here in Hong Kong. What insights have you gleaned about the consumer in China? Because you know, there is this question, how much has the consumer fundamentally changed since the pandemic? And how much is just, you know, circumstantial and you know, on they go if we go back to Walmart started 62 years ago and its purpose is to save people money so that they can live better. And that has been enduring over the 62 years and it's also enduring in every market that we're in. But the how has changed dramatically. And so if I just take China in 2019 96% of our transactions were in person in the store or club, 4% were online. We're now at a point where it's 48% are digitally en engaged and enabled um transactions. That's a vast change in a very short, how you operate, right? How we it change how we structure ourselves. So Sam's Club now have clouds and that enables them to be able to deliver within an hour. So the customer's expectation has changed and we've had to change how we operate in the market to enable us to be able to meet the customer's expectations. And I think that's the fun thing about retail is it's always transforming. And so you've got to always remain curious and you've got to listen to the customer and make their problem, our problem, talk about some of the other markets like, where are you seeing the greatest growth potential in this region or the world? But I mean, I think about Mexico, India and China as being free markets that have great growth potential. Um And, and the way we turn up in each market is quite different. Um And then, you know, we're also, we also glean from what we do in Canada and Chile. And then I look at Africa as being a new frontier for the future. So it's, it's kind of hard to be able to say it's just this one market. Um You know, we've got flip carts in India which is doing a phenomenal job of looking at how they can deliver and, but it's not just how they deliver to consumers, but it's how they also work with small to medium sized sellers and start to kind of help them grow their businesses. Are you deploying A I the same in different markets around the world or are you very much um being strategic in terms of where you're putting your investment? I think actually, India was probably one of the forerunners for us. They had a thing called Flippy, which was generative A I which they did during big billion days, which actually, and they, it was like a, a shop assistant when people were looking for items. So um it enabled people to be able to put in a far more kind of open ended question and get a more customized and tailored result. Now we wanna get behind that, see what they do and then see how do you like bring all that learning to the rest of the world? And I think that's the value of being so many markets you can glean what are the, where are we, where have we got development that's been useful for um the other risk of the market. So there um probably the first time in my career, I think geopolitics has become really important in the life of any ceo how does that impact your decision making in terms of where you invest, where you perhaps, you know, pause et cetera. Yeah, I probably just go back to Walmart's been doing what it does for a long time. And if you think about the last five years, I mean, this year in particular, we've got elections in, in the US, in Mexico, in India, in South Africa. Um, we've just all weathered through a pandemic and worked out how to survive and thrive in that environment. I think geopolitical kind of winds are going to change over time. But what we do is so kind of unifying what we want to do is help people save money so they can live better. And I think that is such a core common need around the world that I think if we just keep our heads down and serve customers well, then we weather the storm. I'd be remiss in our final minutes. I feel like we talk about this as companies, you said companies are people. Let me go to you individually. How do you keep yourself innovative? Um I think one, it just starts with being curious. Um I think I have the best job in the world, like I get to um traverse the globe and see what we're doing from a retail perspective and how some of our partners are transforming. But I also think keeping open minded about like the new generation of leaders that we've got coming in and how they can help us transform. So, so I think that's one aspect. The other thing I would say is um while I like to make Walmart small. I also recognize that our scale gives, gives us reach to amazing leaders around the world. Um I remember having Sam Altman come and talk to Walmart and it must have been in maybe 2000 and A I, no one even knew about open A I then. But you know, he came in and spoke to our, our um global officers is about the work that he was doing. So you get these amazing insights into development around the world. And I think that helps us all continue to elevate our thinking. Can you help us see around the corner that we talk about how transformative A I is for understanding consumers and everything else, give us some sense of what we can expect. I know there's only so much you can tell us. But what are you most excited about in terms of the transformative power of this? I do think that as we like as we kind of transform um generative A I into a more personal relationship with customers, I think customers can expect a more delightful experience in retail and I think we're only on the cusp of that just now. So I think there's more to come there. Excellent. Um And one other question with regard to what you've learned about the consumers, when you look ahead at how now consumers are engaging with this technology? Are you finding, is there anything from the data that you've gleaned any insights you'd like to share in terms of how people are buying, especially in this part of the world and give some nuggets that might be helpful to other businesses or vendors as to how they engage with you. Um I think when you think about what people are buying, um people are fairly consistent across the world. So, you know, as we looked over this last kind of holiday season, people wanted to engage in events because they wanted to share moments with their family. And I think we saw that, you know, come out of COVID, this sense of wanting to gather together and celebrate. So events seasons were really um were um we were really happy with our performance through those. I think people are also trading into private brands because I think, you know, value is extraordinarily important to people as you look at different markets who are weathering multiple years of inflation. They, they're looking at how do they stretch their dollars to go further? So they're looking at private brands, they're looking at great value and where you can be disruptive on price. That's where we're seeing strong engagement. Excellent. Any final thoughts in our 35 seconds that you have left? What would you like people to take away? Um You know, I moved from Australia to the US to join Walmart because it is a company that I think does good things in the world. And I've been there for almost uh just over nine years. And I am continually impressed by in every market that they go into how they look to not find the most they can sell something for, but the least they can sell something for. And I think that's transformative. And so what we do for our customers, I think is just fabulous. And then I also look at what we do with the supplier base and our sellers and how we can bring small to medium suppliers up and give them an opportunity to sell, not just in the country that they're in, but now in a marketplace that can be across the world. And then we have an amazing group of associates that I think we give ladders to a future career that uh I think I've been the beneficiary of and I want more to get to enjoy. Excellent. Well, please join me in. Thanking Kath and uh more to come. Thank you very much.