Walmart CEO McMillon wants cake with icing

Walmart Stores, Inc., president and CEO Doug McMillon invoked a baking metaphor at a retail conference in Northwest Arkansas this week to describe the company’s merchandising philosophy and approach to offering customers every day low prices.

“We want to take care of the cake and have room to put icing on the top,” McMillion said. He was referring to the balance that needs to exist in the company’s product assortment between generating sales and profits with volume producing products that drive the comapany’s overall business and enable it to takes risks and feature other items that can surprise and delight customers.“I’m in too many stores that lack excitement in certain categories. We need more innovation and more new items.”

This philosophy is understood by the company’s best suppliers, according to McMillon, because it is core to the Walmart business model and a culture that promotes speed of decision-making and risk-taking with merchandising.

McMillon described the balance between art and science that makes a merchant successful and noted that as the company grew ever larger over the years the science side of the merchandising equation had come to dominate decision-making.

“You can manage a category to death,” McMillon said. “We need to be creative and do something people don’t expect by getting after items that will surprise and delight shoppers.”

McMillon shared that message with an audience of nearly 400 people who gathered at the Holiday Inn Convention Center in Springdale, Ark., on Thursday for the 15th annual Emerging Trends in Retail conference organized by the Center for Retailing Excellence at the Sam M. Walton College of Business.

McMillon and Richard Smucker, CEO of the J.M. Smucker Company had a fireside chat type conversation in front of the audience during which McMillon touched on many themes that were very familiar to long time suppliers to the company such as how an EDLP philosophy builds trust with shoppers and creates a value propostion built for the long term.