The Future of Retail Tech
January 8, 2018
“Walmart has been in India since 2007 and has maintained a slow and steady (albeit low-profile) rate of growth and expansion in the country”, said Hari Vasudev, Country Head & Vice President — Technology, WalmartLabs India.
Being the world’s largest retail chain is anything but easy. In order to maintain its position and stay ahead of the curve, WalmartLabs is embracing innovation and technology at an aggressive pace.
In the 6th edition of OrangeScape’s CTO Talk, titled ‘The Future of Retail Tech’, Hari spoke about a wide range of topics from the state of the retail industry, price leadership, IoT and analytics, to global responsibility and the future of retail.
The Legacy of Legacy Systems
If you ask someone about the history of radio frequency identification (RFID), the first thing that you would hear is Walmart. Walmart was the first company to implement RFID in the supply chain to ensure traceability.
“Although we are quite zealous about delivering everyday low cost (EDLC) and everyday low price (EDLP) to our customers, Walmart has always been a visionary when it comes to technology”. Walmart has constantly been regarded as an outstanding example of slick, efficient IT, and intelligent supply chains.
However, the centralized IT structure which once offered a competitive advantage for Walmart started hampering its growth. “The other thing people have to keep in mind is that Walmart is a company that grew and deployed technology at the time when the internet didn’t exist. Certainly, there were no tablets or mobility”.
“Even today some of our distribution centers, operate on mainframe systems. All customer interactions and POS transactions are stored in a local system, which is then uploaded once or twice a day to a mainframe. As a result, the whole notion of using a messaging system like Kafka or a centralized message bus or real-time streaming is non-existent.”
“We built integrated tools and frameworks to bolt all of these on the top of our legacy systems and merge and marry them with the data fetched from our online systems.”
Data in the Heart, Technology in the Head
“At the heart of everything we do is data. For a retail giant like Walmart, data is a critical piece. We are conscious and careful of what data we collect and how we store, process, and use it.”
Walmart collects a huge volume of data about merchants, suppliers, customers, inventory, customer loyalty, price comparison of rivals and more. It is then deduped, cleaned, and stored in a centralized data lake upon which a number of real-time consumption layers are built.
“We use a number of niche technology players like Druid, Thoughtspot, and Looker to build the consumption layers. Thoughtspot helps us process extremely large data and visualize in real-time. Druid and Looker are used as an intermediary layer on the top of our data lake”.
One of the biggest challenges Walmart faces is balancing the speed at which the business operates with the risk that comes hand-in-hand with it. Even today, most of their supply chain optimization techniques use old-school algorithms.
“Everywhere data scientists spend nearly 60% of the time not building models but perfecting the infrastructure; They can’t run their algorithms and production systems until the infrastructure is perfect. And so, we built a Machine Learning Layer on top of their Data Lake as a CI/CD pipeline for data scientists. Most of our algorithms are taking advantage of GPU as a construct.”
By effectively leveraging the power of GPU and tapping seamlessly into data, Walmart continues to stamp its mark from pharmacy efficiency to work optimization and supply chain management.
“This private cloud is one of the two platforms that form the core and the base of our infrastructure. The other one is a public and private, hybrid model. Azure is a platform of our choice but we will continue to leverage Google’s GCP and other prominent cloud players”.
From Brick to Digital: The Digital-Physical Blend
In today’s multi-channel world, consumers expect a smooth online-to-offline purchasing *experience. Walmart’s huge brick-and-mortar network of stores gives it a competitive edge in this e-commerce battle.
“Our e-commerce business is growing by 40% YoY. Today, Walmart is the third largest online marketplace in the U.S. There is a Walmart store within 10 miles of 90% of the U.S. population and we are actively using our retail footprint to merge the online and offline world.”
While its digital competitors are testing out physical store experiences, Walmart’s went on an acquisition spree in the e-commerce sector. Especially the acquisitions of Jet.com, Flipkart, and other expert players give Walmart a considerable boost.
“As we continue to stretch our e-commerce empire, we are continuing to create a compelling store experience by bringing digital capabilities like pick up towers and geo-fencing technology. Geo-fencing technology alerts us the moment when a customer enters our parking lot to pick up an online order and pick up towers retrieve customer orders under a minute.”
The Global Retailer and Corporate Responsibility
Corporate responsibility is gaining importance in the world of business. Given the scale and size, Walmart has a huge responsibility to be conscious about the environment and the impact it has.
“ At our scale, if we don’t do things right, the detrimental effect it could build up fast. This is why we are focusing on reducing energy intensity, decreasing emissions, and eliminating waste in our operations”.
“A 28% of all the electricity we use is powered by renewable energy. 77% of our global waste is diverted from landfills. And, we have committed to removing 1 Gigaton of emissions from our supply chain by 2030. This would have a huge impact on global warming”.
Store No. 8 — Transforming the Future of Retail
Store No.8 is an innovation hub that has been established by Walmart to incubate transformative ideas that shape the customer experience of the future.
“Store №8 is a key component of our innovation strategy to prepare for the future of retail and commerce. Our supplier can walk in and experiment alongside us. Here we are testing technologies like conversational commerce, AR and VR that deliver personalized customer experience and free up our in-store associates to focus on value-added tasks”.