STORES Convention Daily - 2018 Big Show Day 3 - 30

2018 TUESDAY

30

Innovation
Continued from page 1

with a vendor is a good example," she said.
"That's something that Walmart does very
well, and we have very clear processes and
protocols. But the vendors we're working
with in Store No 8 tend to be cash-strapped
- they're startups as well. So how do you
change something as simple as accounts
payable and contracts so that it gets cash
to them in a way that enables them to serve
you? That has been challenging, but you
have to have a vision. And if your core
focus is speed, then you've got to revisit
all those procedures."
Hiring, she said, raises similar issues.
"You have a machine within Walmart
that is incredibly efficient and effective,
but if you're hiring within a week or two
weeks, you really have to re-examine your
processes."
Speaking of hiring, Friend noted that
however much freedom they have, and no
matter how creative they are encouraged to
be, the fact remains that the entrepreneurs
recruited by Store No 8 are, or become,

Lori Flees of Walmart (left) and Scott Friend of Bain Capital Ventures (right) chat about
innovation.

Walmart employees. "Given that," he said,
"how do you attract real entrepreneurs?"
"We thought it would be hard," Flees
said, "but it hasn't been. In fact, we've been
surprised at the interest we've gotten. A lot
of entrepreneurs like the ability to develop
an idea and then scale it with a company
like Walmart."
While Store No 8 is an innovation lab,

Doing Good
Continued from page 4

for the past 36 years. Last year, with
Harvey, they gave away 200.
At The Home Depot, Brown spoke
of a significant initiative that dates back
to 2011. That's when the company recognized the extent of the homeless veteran
population nationwide.
"Many people don't know it," he
said, "but on any given night, it's estimated that there are 39,000 veterans that
are homeless." A variety of other great
organizations are taking care of food and
water, "and shelter usually comes next,"
he said. "That's right in our wheelhouse.
It makes a lot of sense for what we do as a
business, so it's where we turn our focus."
The company doesn't typically broadcast
its efforts, but it made a commitment to
work with a variety of partners and give
$250 million to the effort, and already
has reached $227 million. In addition to
that corporate initiative, The Home Depot
Foundation gets behind local associates
with ideas for helping other associates in
need and improving their own communities. And when a disaster happens in one of
those communities, the retailer has learned
to be a good neighbor - because it carries
many products involved in rebuilding, The
Home Depot does well to be the last ones
open before a disaster hits, as well as the
first ones open in the aftermath. "You can
get a black eye if you're not there for your
community when they have those needs,"
Brown said.
Red Wing Shoe Company, meanwhile, also aligns with what it knows
best. In this case, it's footwear. As part of
the company's DNA, Schneider said, Red
Wing has held numerous events across
the country near Thanksgiving each year,

Flees was quick to note that her department
is by no means in charge of all innovation
at Walmart. "That's a question we get asked
a lot, and I think it's safe to say there is no
one organization within Walmart that's
responsible for all innovation. There's so
much innovation we're doing in our current
supply chain and our store operations and
ecommerce, and their focus is really the

Supply Chain
For homeless
veterans, "shelter
usually comes next.
That's right in our
wheelhouse. It
makes a lot of sense
for what we do as
a business, so it's
where we turn our
focus."
- Marc Brown,
The Home Depot

getting homeless people into the right
footwear to survive the elements. Last
year there were 26 events, in which 3,000
pairs of shoes and 4,000 pairs of socks
were given away. But it's not something
the company publicizes.
Sure, it might create some goodwill,
but that's not what it's really about. Besides, it makes sense in another way: It
gives the company the added bonus of
depleting inventory.
"At the end of the day, we're forprofit businesses, and we can't apologize
for that," Schneider said. "Footwear is an
inherently inventory-intense business.
We have 279 styles of Red Wing footwear, I've got 13 size runs, and a lot of
inventory and a lot of dynamics around
forecasting for our business. We don't
always get it right. So what should we
do with that excess inventory? We should
give it away." Exactly how much depends
on need, as well as what the company can
legitimately provide, he said, but "We
always give something."

Continued from page 8

"end-to-end in the consumer value
chain," has a variety of areas, from distribution to retail to venture capitalism. As
for Li & Fung, the company is a global
supply chain manager; it connects about
8,000 retailers in over 100 countries to
about 15,000 suppliers in 16 countries,
Fung said, and is growing its rabbit ears
in a couple of different ways. There are
efforts in digital design, for example, as
well as a speed playbook that helps customers decrease lead time and increase
speed to market.
Fung sees the digitalization of the
supply chain as an inevitability - and
wants to be first when it comes to endto-end. It's already happening in industries such as automotive, aerospace and

next one to two years," she said.
"At Store 8, we're looking at more
of a three- to five-year window. If you
don't find that kind of innovation early,
you're behind. You wind up having to get
it from other places, and you don't have
the opportunity to shape it to your own
organization. We're trying to incubate
new businesses that can also help fund
that innovation."
As he brought the session to a close,
Friend said, "To another retailer out here
in the audience, Walmart might seem
somewhat anomalous, given its size and
prominence. Are there lessons here for
the $100 million specialty retailer, or the
billion-dollar regional department store?"
"I don't think it's Walmart's size
that's enabled us to do this," Flees said,
"so much as the senior retail leadership
taking a position on where retail is going
over the next 20 years, and figuring out
where we needed to be leading in capability development, to be able to disrupt
ourselves rather than having someone else
disrupt us. There are opportunities of all
sizes, and I think any retailer needs to have
that point of view."
electronics. The benefits? A lot of data,
better decisions, fewer markdowns and
less inventory, for a start.
In his view, speed, innovation and
digitalization will be the hallmarks of the
supply chain of the future. He considered
the design, development and sampling
phase as potentially the "biggest bang for
the buck," as it can take up many months
of the 50-week lead time.
Li & Fung partnered with retailer/
crowdfunding platform Betabrand to
make 3D designs of shoes that were then
superimposed on a real model; Betabrand
began co-developing with consumers
and pre-funding. The shoes were then
produced when the company collected the
orders, without a single physical sample
being made.
"This is already possible," he said.
Apparently, it's time to keep a closer
eye on Taylor Swift's wardrobe choices.

Attendees explore new technologies on the EXPO floor.



Table of Contents for the Digital Edition of STORES Convention Daily - 2018 Big Show Day 3

STORES Convention Daily - 2018 Big Show Day 3 - 1
STORES Convention Daily - 2018 Big Show Day 3 - 2
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