Walmart CEO: Blend Data with Gut Instinct
In a recent HBR interview, outgoing Walmart CEO Doug McMillon emphasized the importance of blending data-driven decision-making with 'gut instinct' while modernizing the company's massive supply chain. His comments suggest that even the most data-rich retailers see a need for platforms that support rapid experimentation and human judgment, not just pure automation.
Walmart's "people-led, tech-powered" strategy under McMillon involved massive capital infusions into the supply chain, with technology and eCommerce investments reaching over $11 billion between 2019 and 2021 alone. This spending is set to peak in 2026 as the company retrofits the majority of its 42 U.S. regional distribution centers with automation and robotics. The goal is to have approximately 65% of stores serviced by automation by the end of 2026. The company's data strategy relies on unifying information from its vast network of stores, distribution centers, and digital platforms to feed AI and machine learning models. This includes leveraging agentic AI for autonomous decision-making in inventory management and logistics, which can reroute inventory in response to real-time disruptions like weather events. This shift aims to move from reactive analysis to proactive, predictive operations. A key piece of this technological overhaul is the deployment of ambient IoT. Walmart is investing in smart sensors to track merchandise and an estimated 90 million pallets in real-time across its 4,600 U.S. stores by the end of 2026. This firehose of data on location, temperature, and humidity feeds AI systems to improve inventory accuracy and cold chain compliance. This tech-centric approach, a hallmark of McMillon's tenure since 2014, has been crucial in competing with Amazon. Initiatives included the $3 billion acquisition of Jet.com to accelerate its eCommerce presence and forming partnerships with companies like Google's Waymo for autonomous deliveries. During his leadership, Walmart's net sales grew by 43% from $473 billion in 2014 to over $674 billion in 2025. In its high-tech grocery distribution centers, some of which are 98% automated, AI creates the "perfect pallet." Algorithms determine the optimal placement for items, considering weight and fragility to ensure products like eggs are not crushed, which streamlines unloading at stores and reduces waste. Walmart shares its real-time data with suppliers through its "Retail Link" system and the newer "Walmart Luminate" platform, which will be rebranded as "Scintilla." This allows vendors to manage their own inventory within Walmart's warehouses, improving forecasting and reducing overstocks. The company is also scaling these technology platforms globally, with AI-driven systems already live in markets like Mexico, Canada, and India. By creating reusable platforms, such as for "self-healing" inventory, local teams can adapt the technology to their specific needs without starting from scratch, a process that now takes weeks instead of quarters.
