The Doing Business in Bentonville Podcast

Ep. 124 - Everyday Low Price, Everyday High Tech

• Doing Business in Bentonville • Episode 124

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Retail is changing aisle by aisle, and we’re walking through the shift with a front‑row view. We dig into how Walmart moved from years of heavy investment to a true “harvest” phase, where technology finally meets day-to-day usefulness. From electronic shelf labels and RFID to in-store retail media and traffic analytics, we show how the store itself is getting smarter, and how that intelligence translates into better value, faster trips, and clearer choices.

We connect the dots between brick-and-mortar strength and e-commerce integration, where curbside and delivery turn every supercenter into a forward-deployed node. That shift demands a packaging revolution: cases and primary packs designed for robots to pick, place, and palletize in both regional fulfillment and microfulfillment. Expect more squared formats, less air, and fewer damages, which improves margins and speeds. Along the way, we highlight Sam’s Club momentum, scan-and-go, a cleaner layout, seasonal impact upfront, and a rising health focus that stretches from small appliances to functional ingredients, while private label evolves beyond opening price point into feature-rich value.

Then we look ahead. With a documented price gap supporting the “save money” pillar, the next edge is “live better” through contextual, AI-driven guidance. Imagine a commerce agent that plans around real life, bill cycles, game nights, and family dinners, while honoring EDLP and personal preferences. That’s where the lines blur among shopping, media, and lifestyle, making the experience feel like problem-solving instead of errands. Still, the cultural guardrail matters: avoid hubris, stay humble, and keep decisions anchored to the customer’s mission.

If you enjoy thoughtful, on-the-ground analysis of how tech, merchandising, and operations come together, this conversation is for you. Subscribe, share with a friend who geeks out on retail, and leave a quick review to tell us what you want to hear next.

SPEAKER_00:

Well, I think as we think about the last two buckets that we've talked about, um uh no question Walmart has changed a lot. And they they've been extremely aggressive uh in in both of those spaces in a very good way. And and I I just gotta go back to what you've taught us already at the very beginning of the show. You taught us that to think about this balance, because that is exactly what marketing and merchandising has done well. We've seen it yesterday. They're creating this balance for for their customers. You make a choice. We even seen it in the paint department. Remember the paint department?

SPEAKER_01:

Yes, so good, better, and best. Yes. Right? It's it's literally labeled. If you haven't seen this, yeah, it's yeah, you pointed you guys pointed that out to us yesterday.

SPEAKER_00:

Better, best on the package. And but that's the balance. Yeah. You it it's to your point, and then we'll move on because I I I wanted to get to the next bucket. Uh I'm excited about the next bucket also. But what what you're teaching us uh is that that there is a right way to balance your merchandising, your retail shop. And and based upon uh based upon your customer. But here's the key. You better know your customer. And it's obvious they spent a lot of time analyzing their customers. Yes. And it wasn't, I mean, then when you know your shoppers, then you begin to merchandise to those shoppers in that balance method that you talked about, and that's what we see.

SPEAKER_01:

That's right. That's right. Yeah, they're they're moving artfully, what you say from a little merchandise, yeah. Moving artfully across up and down the merchandising ladder. Right. Very, very artfully. And they can play that when from an assortment perspective in different store traits. Um and and they've got the technology. There it is again. Yeah. They've got the technology, they've got the brain power, they've got the um the data to do that, and they're leveraging it.

SPEAKER_00:

Trevor Burrus, Jr.: Well, okay, talk about your third bucket. Yeah. How did you know I told you we're going to go have this inside, and there it is already. So hang on with us because we're not going to be able to do that. It's only going to get better. Okay.

SPEAKER_01:

The third bucket for me is the broad category of technology. Okay. Okay. And you see over the past several years, anybody who's paid attention to the capital expenditures has seen just enormous investments in supply chain and technology. Okay. You almost you know the old adage we used to use is um harvest versus invest. And in the past, Walmart's been investing in this area. And I think now, with the announcement of e-commerce profitability, we're entering into harvest phase. And I think if if you listen to Wall Street, I was at the Goldman Sachs conference uh last week. Oh, Wall Street is quite excited about the possibilities now of harvesting some of these investments that they've made. So from an in-store perspective, you know, you've got electronic shelf labels now, you've got probably maybe call it up to a third, around a two around uh-thirds of the square footage of that store now is RFID enabled. Um in the SAMS, you've got the scan and go uh capacity, you've got expansion of self-checkout, you have QR codes now at a lot of vignettes, you've got the capacity to order online more easily, you've got video screens, right, with over time the capacity to map manage, um, to measure, I should say, the shopper traffic flow across those displays. And now you've got a retail media network in the store. Yeah. Right? So the incorporation of technology, the incorporation of technology with uh for employees, right, with this this what they call Sparky. Yeah. Sparky, Sparky, and then and now giving that to giving uh a similar tool to uh to the consumer makes this a technology-enabled interface where platform, where, where, where products and packaging is smart, right? Surfaces are smart, displays are smart, checkout is smart, and that enables Walmart to apply then the capacity to measure and track and manage virtually, in effect, the the store and all of its componentry, which leads to the other component of technology is is e-commerce. The integration of e-commerce into this store such that it is a forward-deployed distribution center for people for curbside, for uh delivery, et cetera. The the capacity to integrate into that I think is just as is just enormous. Obviously, the fulfillment centers are becoming more automated, uh, and and uh they've talked a lot about that. They're continuing to invest in microfulfillment centers, uh, which I believe once they can get that right, uh, is going to fundamentally change the game for them and add significant profit um benefit to them. But this e-commerce integration is particularly important to that higher-end consumer. That higher-end consumer who is more likely to be have dual-income households, uh, et cetera, and therefore be using all of these ancillary e-commerce-enabled services that all of a sudden create a wired, um, contextualized world that Walmart can now have visibility into. And once you have visibility into it, and you can track and trace where everything is and where it's going, now you can market to it algorithmically. You can market to that to different sectors and at different times of day, days of week, different stores, different categories for who you are and what you buy and what you could buy. You see, and so all of a sudden now you create a digitized commercial ecosystem that isn't just ethereal, it actually does the thing it's marketing. You actually it actually fulfills. And so you put all that together and you know, would you would you say that they're a leader in e-commerce right now? They're certainly among the leaders in global e-commerce today. And again, this is I would argue this is harvest. Doesn't mean they stop investing, but this is the beginning of harvest time, uh, as as I see it. I mean, um from from an e-commerce perspective, are you are you seeing the same thing? I mean, the the investments are just I I would agree a hundred percent.

SPEAKER_02:

And we're also seeing more with e-commerce with a lot of orders being fulfilled. We'll work with Walmart buyers and replenishment on either pallet trains or displays to where they're now taking into account it's just not the you know, the person walking into the store shopping off that display. They're now taking into account that that display will also be supporting the the online ordering that's being fulfilled in the store that they carry out and put in your trunk. Right. And and delivered to you.

SPEAKER_00:

And deliver to, you know, because it's a fulfillment center. It's a fulfillment center. That's you know, it's a store, but what but you are trying uh in Walmart's vision back years ago was those stores could be fulfillment centers. And when you think about that, you're now seeing it visually with the shopper walking with her and and filling that order and goes to the room and goes either at the top of the parking lot or it goes to your home. Yep. Wow. Yeah. I mean that's that's happening.

SPEAKER_01:

And then you add an automation infrastructure to this. Right. Right? Right. And that over time, um, you're gonna be looking increasingly at packaging that is automation compliant, right? Now talk us about that. Okay. So it's it's in for the fulfillment centers that what that means is pallets so that the secondary packaging can be picked and so that the secondary, the, the, the, uh, the the uh case pack can be picked and packed by a robot, can be palletized and depaletized by the robot. Gotcha. So it's automation compliant in every regard and you know, coming out with very clear standards around that. From a individual product perspective, from a micro fulfillment perspective, over time as Walmart grows more micro fulfillment centers, you're gonna see not people going up and down aisles in the store, you're going to see these microfulf, and you probably have been in these before. Was it Store 100 that has one next to it? Yeah. The idea is is that it will become um uh robot enabled. And so that the robot will be picking the package up and putting it in the um uh in the in the uh the the the carton, right? The uh cart, the tote. Yeah. Right? And robots will be fulfilling so the primary packaging is increasingly going to have to be robocompliant or automation compliant to comply with robots picking and packing the the grocery order. I mean, I don't think anybody imagines that 10 years from now or five years from now, maybe, you know, that you're gonna have people walking up and down aisles fulfilling e-commerce orders. Robots are going to do that. And that's gonna create a, if I could call it this, a revolution in packaging. We're starting to see it now, Andy. More packaging is coming through the pipe that is squared. So if you think about uh what it used to be maybe in in big bags and it's now in cartons, if you go into Health and Well, you and I were in the Health and Wells where I was showing you a bunch of um products that used to be kind of rounded, now coming in squared. Oftentimes um uh initially e-commerce only products that just now started to move to brick and mortar, they have an advantage because a lot of them were initially square because they pack better. They pick better and they pack better. And there's less space there, there's less airspace around it. So you're starting to see the influence of a more e-commerce-friendly, automated world come into the shelves, come into the products that we're buying, because more and more of the products are going to be uh e-enabled. Right. If if it's at the fulfillment center, you know, where the the the a robot's gonna palletize and depallitize and you know build the pallets, um, or whether it's at the micro fulfillment center where increasingly um robots are gonna be doing the fulfillment um of your order, you know, um it's uh it's uh it's going to be a a fascinating world. And and again, if you if you think back a few a few years ago, there were a lot of people out there questioning whether or not, you know, Walmart had what it took to uh to do this. And we weren't- I mean, there were there were many voices, and you can look back, just do a Google search, find out these these um and um they have more than pulled it off. Yeah, I agree. I mean, you know Well, it's all exciting, isn't it? Unbelievable. Yeah. Yeah. And and the fact that you can see it all in those in the the the Walmart and the Sands format, that that this this the stores themselves become the manifestation of this vision. You used the word vision before, that the vision is now coming to life in these stores and that you can see it. It's not just theoretical where we can wonder. You can see it.

SPEAKER_00:

Well, you know, we we we've talked a lot about balance today, but I think this is another example that you have both have shared about balance and and how you balance brick and mortar to e-commerce. And uh Walmart is using, as you have said already, that they're using the brick and mortar in a powerful way. And it's such a competitive advantage to use the brick and mortar along with the e-commerce and integrate both of those. That's really and I would tell you that that's that's what Walmart's gonna, they they are not abandoning the brick and mortar at all. They're they're they they are continuing to expand that and reinvest, as you said earlier, into the brick and mortar and the SAMS. And you know, we talked a bit about SAMS for a moment, and let's go there just a moment before we get into the future or more. But let's talk about SAMS for mortar, because I thought you all brought up some really great uh thoughts around SAMS and then and the new CEO, SAMS, um, the former CEO is advanced into more responsibility. And now you've got just a great leader there leading a company, and we see such in the SAMS that we toured, we see such advancement in technology. And so spend a moment or two talking about the technology investment in SAMS.

SPEAKER_01:

Yeah. I mean, look, they they obviously had a fantastic quarter up order of six percent, uh, traffic was up, uh, basket was up, e-commerce was up. I mean, uh you know, it's it it wasn't long ago that you would look at that and you look at SAMS and say, well, you know, they're kind of hanging out over there. And now they're rising uh in importance. And a lot of it, to your point, has to do with, I think, um, technology, the app that enables you to walk the the club um more seamlessly, um, their uh e-commerce capabilities, which I think um are are growing uh certainly at a higher rate than the than the rest of SAMS, um, obviously because of the investments that they've uh that they've made there. But in particular, the scan and go functionality, you know, the capacity now to go in, scan the product, and then just walk out. My belief is that over time it wouldn't surprise me to see that that gets advanced even further. Uh and I think you can do this in a limited SKU environment reasonably uh simply, uh, that those will all be RFID enabled. Yeah. And so that you literally you won't even have to say, geez, then I remember to scan it. Yeah. Um, but that it'll be it'll just you'll you'll come in, put it on your cart, and out you'll out you'll go with it in a very seamless way. So I I I'm seeing their ability to better integrate SAMS into the larger Walmart ecosystem to make have the technology gains that they're getting from uh from Walmart proper, the leveraging of their data, their member data in particular, but to let um Walmart's data science folks, you know, better manage that to determine, you know, uh, you know, where where price points should be, where can I invest in price over here because of tariffs? I'm I'm gonna hold price here, but I'm gonna raise prices over there. Um that's again better integration into Walmart's um analytics landscape. But tech is a big part of of why Sam Sam's is going. It's not the only thing, right? And I think when you when you go into that SANS, I mean it's a it's a beautiful club.

SPEAKER_02:

Oh, it's the the layout, just everything from the minute you walk in to having seasonal now right in front of you. Um you know, it's just they're doing a really good job of drawing that shopper in and getting them, you know, here here's the big items that you're looking for, and they're right up front in the store.

SPEAKER_00:

And I think yeah, the other thing that your gentleman pointed out yesterday was, and you already pointed once about the the how it's lower, you can see the around the building. The ability to see the but the other thing that I noticed was the focus uh you know on on ready-made meals, if you will, and and it the quick and easy things that can provide healthy uh for your family, those kind of things. Healthier object. Out of focus on health. We you pointed that out, Dim yesterday, about when we were walking down, all the different items focused on healthy lifestyle of eating and all. And it's in every category.

SPEAKER_02:

It's you know, everything from the air fryer to what it's you know doing for the food that's going in it. It's you know, the protein bars, it's it's literally everything in the club is really going toward that healthier lifestyle. They're calling out just the benefits of the products individually. And it's it's really amazing to see it how seamlessly it's kind of affected the entire club. Oh, well, especially the members marked.

SPEAKER_01:

Yeah. I mean it used to be to your point, but that was you know the standard opening price point sort of thing. Right. Now it's that. And it's also, hey, look at all the great qualities and features of this of this product. And that's again part of what Walmart is trying to do is say, yes, we're gonna serve serve the opening price point consumer with great price, in this case on bulk, but at the same time, we're gonna start offering in here more products with more, as you said, you know, health benefits and talk about the functional benefits that are in there. I I saw the word turmeric show up a few times there in Sam's. And you know, I'm not used to seeing, you know, turmeric uh, you know, show up there. And uh so it's just it's that lifestyle, it's the capacity to to to to service that um you know uh a a new member too.

SPEAKER_00:

Right. Okay, gentlemen, you have you've talked merchandising, we've talked product, we've talked technology. You've done excellent. Thank you. All right. Now you want to talk futuristic? Where do you want to go?

SPEAKER_01:

Yeah, we can we can I I'm I'm not a I don't know, I don't have a crystal have a crystal ball or anything, Andy. I'm not gonna and uh But you have a lot of experience.

SPEAKER_00:

I have a lot of sure. Yeah, so I I really want to hear you guys uh think through that a bit with us as we go through it.

SPEAKER_01:

What when when I think about um when I think about the future, I think about a couple of things. I think about Walmart increasingly blurring the lines between commerce and lifestyle and entertainment and and media in ways that make commerce just a natural part of being part of people's lives. It's the live better piece. Look, there was a I read uh uh studies from uh from Goldman Sachs, and they they have a uh they do a pricing study about once a month, compare Walmart and basket of goods versus a bath a bunch of other retailers. They have a 14 percent price gap in the last month versus this col this collection of half a dozen other retailers. So take the average of the retailers and you pit and you say, what's Walmart's basket price gap against those retailers? It's 14 percent, Andy. It's not two, three, four, eight. Yeah. So I would argue stay on it, but you've got the save money piece down. I see them leaning in much more to the Live Better proposition and saying, how do I integrate myself more into your lifestyle in ways that help you to think about um leveraging technology that says, hey, you've got a light bill coming up, say, in in the next in the next week. Um maybe this week, while you're paying that light bill, these items are a little cheaper. I'm just giving you an example. Um hey, uh it's it's the weekend and you know, you the the the football team is coming over for the the spaghetti, uh this is the spaghetti um uh dinner this weekend. Look, buy you know four or two liters of uh of of pop with that, uh and we'll give you this price on the You see, that cooperative environment with them. And and I think that AI uh is going to put this on steroids. Yeah. I think the capacity for Walmart to be an agent, right? Uh to be a you call it agentic AI, and I know this about as much as I understand about AI, but to to be um the intelligence, the commerce AI um um partner for the consumer that says come to the Walmart AI agent and let us help you optimize commerce you know, holistically, uh in person in a personalized way and in a contextualized way. Um I think that's the future. And to be honest with you, that may be a sooner future than we think. It may not be 2040, it may be more like 2030, yeah. Where that just level of of complete uh holistic um AI integration is there. Um and then you know, you could double-click on that and probably see that play out across a lot of things. But that to me is the overhang that that I I look for. Uh what about you? Have you got anything there?

SPEAKER_02:

Future as far as future in in our segment, um, you know, we talked about QR codes and there's a lot more being done as far as everything that goes into Walmart is driving you back to a Walmart online page. It's we don't just have the SKUs that you see in front of you. We've got an entirely different selection that's right here at the click of a button. Um, you know, if you look in cosmetics, you can go and again click a QR code and you can see what that shade of cosmetic might look like when you're buying it. It's it's so rapidly evolving, in my opinion, that it's it's hard to think when the next big step is because I think in the last, I mean, Andy, you and I talked about it yesterday. It seems like just in the blink of an eye, they have they've just taken leaps and bounds to, I mean, they've they've become a different Walmart. Right.

SPEAKER_01:

Right. Yeah. That I mean, you look at the share growth that they've had, the market share growth and the amount of concentration of their business uh today in the United States, but also in other countries where they operate. And um this is a a retailer with a significant head of steam. Now, having said that, the danger always in having that kind of a head of steam is and I'm Greek, so I get to say this, right? It's that uh this would the old the Greeks would use the term hubris, right? And that would be the only danger, the only watch out for Walmart is keep your humility. Right. Keep your know that you don't know everything. Know that despite the fact that you're running on all cylinders right now, you know, the competitive environment could change, the macroenvironment could change, all kinds of things could be happy. So as long as I think they hold on to that fundamental humility and that you know the desire to be a r and respect for Walmart has always had respect for their competition. Oh, always. Right? And as long as they hold on to some of those fundamental, we'll call them maybe I don't even if you'd say even Sam Walton kind of values, then I don't think hubris is a problem for them. But it is always the watch out, it's always a reminder, you know, to be whispered in your ear. Don't forget, you know. That's the the concern I think that some people are.

SPEAKER_02:

What Walmart has done with the new campus. Oh, if you want to talk about an elevation and you know something that is just a game changer for Walmart and Bentonville. I mean, if you haven't been to the new campus, it's an experience in itself. I mean, it is a small community within Bentonville.

SPEAKER_00:

It is. And, you know, uh, one of the things that Doug said at the last meeting I was there, he said, you know, this new campus is wonderful. Uh he said, you know, my biggest thing is that we gotta stay humbled. He said that. And number two, he said, this campus is about productivity, us working faster and working better together. And that's exactly what it is. It's designed for speed. And um, and you know, because retail is not gonna slow down, competitors are not gonna slow down, things are gonna speed up. It doesn't take um, you know, a retailer to walk through the stores that we walked through in the club yesterday. They're gonna they see what we see and more, and they know that they have to speed up. Yeah so Walmart has to continue to to speed and be more efficient and quicker and better and all that. So that's the big that's the big push. Um, so I have one last question that I really want to talk about. And um thank you. Thank you both. Thank you for hanging with us because I told you it was gonna be phenomenal. And it's just learning, isn't it? It's amazing the learning that's taking place this morning from both of you. So thank you. Thank you. Let's think about this together for a moment. Uh customer loyalty is critical. Yeah. We we know that. I mean, we sh we're shoppers, and customer loyalty plays a big part in our return shopping. And the critical piece for companies, retailers to be successful or any retail, no matter what you're in, is loyalty, trust. How does Walmart maintain that? What are your thoughts on that?

SPEAKER_01:

I think the first thing they do is they they always stay true to EDLP. Um I I think I think by by staying true to EDLP, um they uh retain the heart and the the soul of of who the company is and and and what it is. Now that may manifest itself uh differently in the future from how it has in the past. But I think you maintain loyalty to EDLP. The second thing I think you you do is you're you're always remembering that the assortment that you offer is there uh especially for Walmart. And this is gonna sound uh basic, but to meet a need. What are you trying to solve? What is your shopper trying to solve and your capacity to anticipate what it is that the they're they're trying to solve, what the solution is that you're trying to and uh that you're trying to fulfill, as long as you can do that, um then uh then I then I then I think then I I think you're I think you're okay. It's when you start to get uh when you start to move away from your customer, try to tell them what they need, try to try to tell, try to um maybe um uh incent them toward doing something that is maybe a a a standard deviation or two away from who they are or what they want. Um you know, and we see all kinds of companies out there that try to do that with reband rebrading themselves and re-badging and re-renovating and all that, and and they fall flat.

unknown:

Right.

SPEAKER_01:

Because you lose touch with ultimately saying I serve a purpose in the in the shoppers life. Yeah. And if if I think if you if you if you deviate too far from that, yeah, you you leave your permission zone.

unknown:

Right.

SPEAKER_01:

And uh I don't know.

SPEAKER_02:

I'll what about you? I think Walmart has done a phenomenal job of everything from the rebranding of the the stores to making, you know, even a store walk, it's it's just easier to navigate, you know, all your signages, you can see it from you know both entrances. I think Walmart's done a really good job from online, digital, the brick and mortar shopping experience of just making it an easy shopping experience. You can go in, find what you're looking for. They've just done a they've done a really good job of making the experience of going into a Walmart different than it used to be back in the day. Um, you know, it it's you can go in and actually spend time enjoying shopping and going into different categories, and you'll find stuff in a Walmart that you would typically, you know, we were talking earlier that there's items in there now that, you know, back in the day you would just not have seen on shelf. It's convenient, you know, it's it's seamless.

SPEAKER_01:

Yeah. I and you what did you you you just used the word enjoy, you know. Years ago, you wouldn't have used that word for shopping at a Walmart. You want to say, Oh, it's enjoyable. Well, it's great that you get the price that you got, but it wasn't as enjoyable as other formats. Today, I think walking those stores yesterday, yeah, that was thoroughly enjoyable. Oh, absolutely. It's an enjoyable uh experience to actually, you know, walk the store. It's not just a bunch of stuff, you know, it's it's solving a problem. Okay.

SPEAKER_00:

I think we leave it there. I think that's how we leave it. Um Leon, thank you. It's been a pleasure uh to spend time with you uh on a topic that we love and enjoy. And so thank you so much. Um Leon, um, you have to come back soon. All right. Okay, boom. So do you. Okay. To all of you, uh, thank you so much. Uh again, what I said at the top of the show, thank you for your your your support, your your loyalty, your review, and all of that. We could not do this without you. So thank you, thank you very much. And then again to our guests. What a pleasant experience to be with both of you and and spend yesterday and a nice dinner last night and time this morning. So thank you. No, thank you for. Thank you, everyone. Have a wonderful day. Goodbye.