Walmart posted a 2.7% increase in Q3 same-store sales for its namesake US business, its best performance in more than eight years, but don’t just credit the retail giant’s fast-expanding online operations: the unit's online sales rose 50%, but contributed less than one-third of the total comparable sales growth.
The results are another sign there’s room for physical retailers to thrive. As much as Amazon has been blamed for industry disruptions, what separates winners from losers is often about who gets the basics right in the first place.
Best Buy, which also reported results on Thursday, is another example of that dynamic. It posted a 4.5% growth in Q3 US comparable sales, outperforming the industry average, as online sales rose 22%. CEO Hubert Joly said Thursday that Best Buy’s store employee turnover rate is at an historical low as Best Buy has increased employee training and compensation.
“If you have lower turnover, people are more proficient,” he said on a conference call. “It’s a reflection of more engagement…. Great employee experience (results) in a great customer experience.”
For instance, as Best Buy is expanding on “smart home” related products and services, Joly said Best Buy has added “an incremental 1,500” dedicated employees there. Joly also pointed out the difference between when consumers choose to shop online versus in stores, something other brick-and-mortar retailers should take note.
“Almost all of our customers currently use both the store and the online channel, and they have different expectations on what the channels should do for them depending on their mindset,” he said. “We're seeing significant shifts in customer behaviors in terms of what they buy online and what they buy in the stores.
"From a traffic standpoint, we're continuing to see traffic decline as customers tend to buy online the higher frequency, smaller items, and they tend to focus their trips on the store for more discovery, experiential discovery, interaction with our great Blue Shirts [employees] and gravitating to higher-ticket items, more complex solutions in the stores.”
To meet the demands of many shoppers who still desire help, Best Buy is also adding more “In-Home Advisors" to provide free consultation services for consumers to trigger “enhanced revenues that are largely [from sales of] product and some services.”
Under CEO Doug McMillon, Walmart also has raised employee wages and added training, including adding Walmart Academy to train employees on a range of skills, from how to run a produce department to general leadership.
Employees are “using technology and apps for inventory management and price changes that help make their jobs easier and increase productivity in the stores,” McMillon said in a pre-recorded call Thursday. “Store leverage is helping to allow our strategic investments in eCommerce to continue.”