Get Ready to Roboshop

Alexis Madrigal talks with Walmart’s Gibu Thomas about why a smartphone is the perfect shopping companion.

Eero Johannes

Shopping at Walmart is one of the world’s most common activities. Each week, more than 245 million people visit a Walmart store. By comparison, Apple stores receive fewer than 400 million visits a year. More and more, Walmart has found, the hands attached to that foot traffic are thumbing smartphones as they pass through the door. Gibu Thomas, Walmart’s senior vice president of mobile and digital, is in charge of harmonizing the in-store and digital experiences. He leads a team of 1,500 people in Silicon Valley working to define the online future of in-store retail.

ALEXIS MADRIGAL: You seem much more interested in mobile technology than in “online shopping” or “e‑commerce.” Why is that?

GIBU THOMAS: If you look at industry data, what you see is that mobile-influenced in-store sales are double that of the entire e-commerce opportunity. By 2016, e-commerce sales are projected to get to about $345 billion in the U.S. “M‑commerce” sales—online sales through a mobile device—are projected to get to about 10 percent of that number. But if you look at mobile-influenced offline sales in that same time frame, they’re projected to reach more than $700 billion.

AM: So that means you need people using your app. How many people use the Walmart app?

GT: We don’t really disclose app-download numbers, but it is a fairly significant number—tens of millions of people have the Walmart app installed on their phone in the U.S.

AM: What can the app do?

“We asked ourselves, what if we took our online search engine and made it an in-store search engine?”

GT: The context matters. When you are in a store, the app knows to turn on this thing called Store Mode, which surfaces in-store capabilities: Where do you find a product? Where is your shopping list? Where is the local ad for the store for this week? All those things that you care about when you’re in the store that typically you don’t care about when you’re on your couch or when you’re on the go. When we launched Store Mode, almost 60 percent of the people who have the app accepted the prompt to enter Store Mode. It was kind of second nature to them.

AM: Do you think most stores are going to have this kind of place-based mobile experience to help you shop?

GT: Well, I can tell you that every Walmart store in every country will have it. I think from our data it makes a ton of sense, but I’m usually not in the business of giving advice to our competitors. When customers are in a store with a smartphone, they want an experience that is the digital equivalent of the analog experience they have in the store, that borrows ideas from online.

AM: What online ideas have you borrowed?

GT: Product discovery online is so easy, but product discovery in-store is still wandering the aisles and asking an associate. We asked ourselves, what if we took our online search engine and made it an in-store search engine? So we put a search button in the app.

You could search for toothpicks, let’s say, and it would show you all the different brands of toothpicks, what aisle they’re located in, and a map so you can get to them really quickly. People took to it like ducks to water, because search is the behavior that they are very familiar with in an online context. So when we brought it into a different context, it became very intuitive to them very quickly.

AM: When do you think Walmart customers will reach something approaching smartphone saturation?

GT: I think it is about as mainstream as it will be. When we look at the data, more than half our customers have smartphones. If you look at customers under the age of 35, more than 75 percent of them have smartphones. This past holiday season is when mobile commerce really went mainstream; more than half of the traffic to came from mobile devices.

AM: Whoa!

GT: Which is staggering. Two years ago, I think, it was less than 10 percent. And so the way we think about it is, how can we make a mobile shopping experience that is second nature to the customer, so that it’s a natural extension of how they interact with us?

AM: I’m still reeling that half your traffic comes from phones.

GT: IBM published some data about what retail traffic comes from mobile devices, as a kind of benchmark, and Walmart’s numbers are a lot higher than the industry norm.

AM: What’s another retail innovation that’s come out of your shop, aside from the context-aware app?

GT: We have a technology called Scan and Go. It’s a way for customers to use their smartphones to scan the items they’re buying as they shop. We said, let’s put it out there and see how customers engage with it. We thought the tech-savvy customer in every market would probably adopt Scan and Go. And they did, but it wasn’t just the young, early adopters.

AM: Who was using it, then?

GT: The budget-conscious customer. Why? A lot of people come to the store, they pick up things, and then they see how it fits into their budget at checkout. They’re looking at the running tally on the cash register to see whether they can afford something or not. And what we did with this tool is we allowed them to budget in privacy. It’s frankly something we never thought about. I mean, we kind of thought about it, but we never really thought it would be a big feature. You can have your best hypotheses, but there’s no substitute for actually seeing how mainstream customers, who face real challenges in terms of making ends meet to feed their family for a week, use something.

AM: You mentioned privacy. You’ve got this hybridizing of the mobile world and the offline world. What kind of privacy safeguards do you build in?

GT: The Walmart brand is fundamentally built on trust. It’s a place people have gone for many years, where they know they’ll save money. Our philosophy is pretty simple: When we use data, be transparent to the customers so that they can know what’s going on. There’s a clear opt-out mechanism. And, more important, the value equation has to be there. If we save them money or remind them of something they might need, no one says, “Wait, how did you get that data?” or “Why are you using that data?” They say, “Thank you!” I think we all know where the creep factor comes in, intuitively. Do unto others as you want to be done to you, right?

AM: Last question: Can the smart application of technology in the retail shopping experience actually move the needle for a company like Walmart? Can it increase sales by, say, 1 percent, which is some enormous amount when multiplied by Walmart?

GT: Absolutely. Absolutely. With mobile, we can make a small store feel like a big store and a big store feel like the Internet. We can combine the breadth of online and the immediacy of offline to create an experience that means we can be a one-stop shop for you.