The Walmart And Salesforce Partnership Has Benefits Far Beyond The Obvious

During a live interview from NRF 2023 in early January, WalmartWMT
U.S. President and CEO John Furner remarked, “Loyalty in retail is the absence of something better.”

Which is exactly why there is a whole lot to love about Walmart’s new partnership with Salesforce.

The partnership, as stated in a recent article from CNBC, is meant to help Walmart sell its proprietary technology to other retailers. The move is designed “to ramp up sales of its (Walmart’s) GoLocal delivery service, which drops off purchases at customers’ doors; and Store Assist, which helps employees more quickly and accurately pick and pack orders for curbside pickup and delivery.”

Is it a move straight out of Amazon’sAMZN
playbook?

100%.

But that isn’t all there is to it, either.

While the move is quite Amazon-like, it is a move that many retailers still shy away from making. TargetTGT
, Walmart’s closest competitor, for example, showed some signs of taking a similar approach when it acquired Shipt back in 2017, but it has not embarked on anything in a similar vein ever since.

Macy’s? Same deal.

Macy’s, up to this point, has made nary a mention of selling its technology to other retailers within the apparel industry.

In fact, outside of possibly Kroger, and even that may be stretching it, one would be hard pressed to find another example of any retailer taking as blatant of an approach as Walmart or Amazon in this regard.

Business-wise, Walmart’s move makes sense because it creates an alternative revenue stream for Walmart. Sell more of its tech to others and that profit falls directly to the bottom line.

However, the story only gets better from there – because if you go back to what Furner said above, the move is also a good way for Walmart to “eat what it cooks,” (my quotes) so to speak.

It should come as no surprise then that the first two capabilities Walmart plans to sell to others are its GoLocal fulfillment service and its Store Assist platform. The former leverages Walmart’s scale in logistics to help other businesses handle last-mile deliveries, while the latter helps other retailers prioritize and optimize all the activities surrounding in-store order picking and packing.

Both of which also happen to be two of the biggest problems facing retailers today – one, how to take costs out of e-commerce deliveries, and, two, how to make in-store employees happier and more productive amidst industry-wide staffing shortages and the ever-changing dynamics of their day-to-day jobs.

Walmart understands these problems in a way no other retailer does for one simple reason.

Scale.

For technology bred from a retailer to work at scale, it needs to scale both inside that retailer itself but also across other retailers, too. Walmart has proven the first part but has yet to showcase the second part to any great degree.

The beauty of the move, therefore, is that Walmart will learn, by putting its own technology into market, what of its portfolio is really good and what of it is simply the result of Walmart designing and grunting its way through the effort of trying to accommodate its own internal retailing processes.

Or said more bluntly, Walmart will learn which of its own technology systems suck and which of them do not.

While some might find this last sentence pithy, it is anything but. Walmart is in a battle against a juggernaut (i.e. Amazon) that understands how to use technology to improve the underlying infrastructure of how retail is done better than anyone. Amazon, its greatest competitive threat, knows how to design systems that put customers first and keep them coming back for more.

By making its technology available for others to use, Walmart is, in essence, putting in place a stop gap measure to help it understand, in the face of external criticism, where it is most likely meeting its customers’ long-term needs and also where it may be missing the mark. Until now, Walmart has only had its own internal perspective when it comes to assessing its own technological capabilities.

How a retailer uses technology in the design of its overall experience is paramount. Putting great products on shelves at the lowest prices is no longer enough. E-commerce has leveled the playing field and put a premium on how easy and how conveniently a retailer can put goods in the hands of consumers whenever and however they want them.

So when John Furner says, “Loyalty in retail is the absence of something better,” take note because what he is really saying is that people are only as faithful as their options, and the Walmart/Salesforce partnership may in fact be just what the doctor ordered when it comes to keeping the spark in the bedroom alive between Walmart and its customers for the long-term.

For that, and that reason alone, the move is brilliant.