5 Moves Walmart Is Making to Compete With Amazon and Target

The story of Walmart e-commerce has had its ups and downs over the years—but lately it's up, up, up.

Nonetheless, the retail giant—which tops this year's Fortune 500—has its work cut out for it. Rival Amazon keeps Walmart on its toes with voice-powered innovations like Alexa and surprise acquisitions like Whole Goods. Competitor Target bobs and weaves with a take-it-to-the-city strategy meant to appeal to coveted customer demographics.

What's the trick for Walmart to stay on top? Marc Lore, founder of Jet.com and now CEO of Walmart's U.S. e-commerce business, stopped by the Shop.org retail conference in Los Angeles to share his strategy. He told me that he's focused on making sure his 14,000 or so employees stay as nimble as the hundreds he had at Jet before Walmart acquired it for $3 billion in cash.

But that's not all. Here are five ways Walmart's moving ahead on e-commerce:

1. Embrace the Future (and the Future is Voice-Activated)

As Amazon continues to plow investment into its portfolio of voice-controlled Echo smart devices, Walmart is working with Google Home to the same effect. It's a big deal, Lore said. "It's important to look at not just the technology but what it enables...what does it enable in terms of merchandising and logistics that maybe wasn't possible before?" The Internet allowed retailers to be better merchants through a "more efficient catalog." Voice allows for a similar reframing of the practice of merchandising. "Voice means one best answer is going to be more important than it ever has before because you can't just get a list of 50 or 100 different things through voice. Having that one-to-one personalization and being really good at it is going to separate the winners from the losers."

2. Make Targeted, Tuck-in Acquisitions

"For us, two different strategies," Lore said of the company's aggressive e-commerce shopping spree that included Bonobos, Moosejaw, ShoeBuy, and ModCloth. "With respect to the first, it's really about trying to accelerate growth on the existing site and it's more of an asset purchase than anything else. It's not really as much about ROI on the site that we acquired as much as what it can do on Walmart and Jet. The other one...it's really about thinking into the future."

3. Rethink the Org Chart

When Lore took over Walmart's e-commerce operation, he made some key departmental changes that he believes helped jumpstart growth in the division. "One of the first things I did was made Customer Care and Customer Experience two direct reports to me," he said. "I think it's really important to be and have that sort of customer-centric view and no better way to make that point than to have those people report direct. Not only do you get better people, I think, when they're at that level but it elevates the customer within the organization."

4. Leverage Existing Assets

It's no secret that Walmart has a tremendous footprint of brick-and-mortar stores—almost 5,000 in the U.S. alone. Lore sees that physical infrastructure as a huge asset to achieving digital growth. "This is one of the things that gets me most excited about being at Walmart, just being able to leverage the 4,600 stores around the U.S. that are within 10 miles of 90% of the population," he said with a grin. "When you think about them doubling as warehouses, they're already profitable, they're already there, product is getting to them in full truckload quantities. It's the most efficient way to get product forward deployed. So the last mile from store to home and picking are the two other capabilities you need to finish the last piece of the puzzle." And those two capabilities, Lore added, are well underway.

5. Empower Employees

How does Lore ensure that he can preserve the entrepreneurial spirit of his acquired startup Jet within the far larger confines of Walmart? He said it's all about empowering employees. "If you give people information and trust them and empower them and let them run and have them know that they're going to be rewarded for taking risk and not be penalized for it," Lore said, "that's the kind of environment and culture you need to create."

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