Walmart restructures supply chain team in omnichannel push

Dive Brief:

Walmart is restructuring its leadership and uniting its supply chain team in a push for a seamless omnichannel experience, the retailer's executives wrote in an internal memo obtained by Supply Chain Dive. CNBC first reported on the memo.
Greg Smith, Walmart's executive vice president of supply chain, will lead the team. He'll report jointly to Greg Foran, president and CEO of Walmart U.S., and Marc Lore, president and CEO of Walmart e-commerce U.S.
12 executives representing distribution, e-commerce-fulfillment, reverse logistics, inbound and outbound transportation, and automation strategy functions will all report to Smith. The memo did not specify if the restructured team would result in layoffs from any departments. Walmart declined to comment beyond the memo.

Dive Insight:

The merging of the supply chain team is Walmart's latest push toward integrated digital and store operations. For years, the retailer has offered buy online pickup in-store (BOPIS) options for customers, and 50% of U.S. consumers who use BOPIS picked up goods at Walmart within the past year, according to Coresight Research.

Walmart also announced plans last year to roll out its vending-machine-like Pickup Towers to 700 retail locations, reaching 40% of the U.S. population, and add Pickup Lockers for bulky items.

Walmart executives have repeatedly said their core customers want an omnichannel experience, which is why the retailer has invested in such strategies, along with technology to make its integrated options more efficient through automation.

The "one, seamless Walmart experience" customers want, according to the memo, is equally critical on the back-end, as the lines between fulfillment centers and stores blur. "Our stores now are essentially mini-warehouses," former CTO Jeremy King said earlier this year. Several retailers, from Target to Brooks Brothers, have tapped their stores as resources to fulfill orders.

Integrating the supply chain team is another strategy retailers have employed as they realize the significance of the supply chain in customer experience and the bottom line. Macy's and Walgreens hired their first chief supply chain officers earlier this year.

Smith, while retaining the title of EVP of supply chain, plays a similar role in bringing various aspects of supply chain, from distribution to fulfillment to transportation, under one umbrella. In addition, reporting jointly to the CEOs of Walmart U.S. and Walmart e-commerce U.S. solidifies his position as an omnichannel leader.

In the memo, Walmart acknowledged this shift of roles and departments likely won't be the last. "We take these steps knowing we will make further adjustments over time as we balance the need for focus and speed with efficiency and leverage," executives wrote in the memo.

With the retail behemoth often setting the bar, whether it's one-day shipping or automated BOPIS options, other retailers may follow suit in their own operations, making structural changes on the back-end to realize a seamless experience on the front end.

Emma Cosgrove contributed to this report.