As Tech Advances, Grocers Should Remember Their Roots

Walmart and Microsoft recently announced a partnership “to further accelerate Walmart’s digital transformation in retail,” an initiative widely reported as a bid to better keep pace with its high-growth rival Amazon. The retailer’s CIO said the companies’ new alliance will allow Walmart to take advantage of Microsoft’s artificial intelligence and cloud capabilities as it competes in a rapidly changing market. Microsoft is also widely rumored to be developing its own cloud-powered cashierless stores, not unlike what Amazon has offered in its Amazon Go stores.

While Walmart absolutely should embrace tech in this era of unparalleled change, it should also retain a degree of focus on what made it great in the first place. Sam Walton started the business in 1962 with one simple goal: to “help people save money so they could live better.” He also placed in-store associates at the heart of the Walmart proposition with initiatives such as the 10-foot rule: in-store staff being encouraged to greet and offer assistance to shoppers when they were in proximity.

In these times of intensified competitive pressures and tightening margins, it has often been tempting for retailers to see their labor force as a cost and, as such, one that can be reduced. What usually follows is a decline in in-store standards, availability and service. Instead, I would exhort all retailers, Walmart included, to instead value their workforces as assets, not just in the context of performing everyday functional tasks, but also in the context of being brand ambassadors: the human embodiment of the name above the door.

Related:Walmart, Microsoft to Meet in the Cloud

When he was running UK supermarket chain Waitrose, Lord Mark Price famously remarked that the only way to successfully defend against Aldi and Lidl was to try to become everything they cannot be. Likewise, a sensible defense against Amazon would be to become everything they cannot be. This means bringing to the fore aspects of retailing such as experiential stores, pleasant engagement with in-store staff and providing a cohesive multichannel proposition.  

With that in mind, I was pleased to see that Walmart sees the Microsoft tie-up as one that will not just lead to greater efficiency and an improved customer experience, but also one that—in the words of CEO Doug McMillon—“empower associates to do their best work.” In addition to a host of operational benefits and faster innovation, the collaboration will lead to enhanced productivity for in-store associates, hopefully freeing up time for customer-focused endeavors.

Walmart has traditionally been at the vanguard of the integration of technology and retail—a position that enabled it to lead the way in terms of efficiency, communication, data, collaboration with suppliers and logistics. As it takes the fight to Amazon in terms of e-commerce, this Microsoft alliance will inevitably help with its focus on streamlining technology and supporting the use of cloud, artificial intelligence and the internet of things.

Our shopper research has shown that about 31% of shoppers make their choice of retailer based on the availability of friendly and knowledgeable staff. All the technology in the world won't provide the warmth, humor, understanding, recommendations and checkout experience that I’ve personally experienced in visiting Walmart stores in more than 30 states around the country.

I remain reassured that Walmart still sees its vast store network as a vital advantage in its multichannel proposition, and I’m confident that Walmart will remember one of the vital tenets that propelled it to global leadership: “Our people make the difference.”    

Bryan Roberts is global insights director for tcc global.