How Walmart plans to leverage its greatest competitive asset in the retail industry

Walmart, the world's largest retailer, is leveraging its biggest competitive advantage — its stores — as it goes head-to-head with e-commerce giant Amazon in the "next era" of retail. Yahoo Finance’s Julia La Roche shares the details.

Video Transcript

JULIE HYMAN: It's time for "Word on the Street." We're going to check in with Julia and find out what story she is watching. Julia, it sounds like Walmart is getting a little experimental. It's rolling out, what, four test stores? What are they going to testing in these stores?

JULIA LA ROCHE: That's right. Well, I think Walmart's probably leveraging its greatest asset, which is the more than 4,700 stores, and making them shoppable a both online and in-store. And you were just mentioning, they're doing four different test stores. They've announced two of these stores currently in its home base of Northwest Arkansas with two other locations across the US, soon to be announced.

And as I was mentioning, making them shoppable for both online and in-store. They are embedding their product and tech teams within those stores. This is the first time they've actually taken those teams. They will be permanently embedded on-site to really create a rapid prototype environment for testing new technologies.

And they'll iterate, and prototype, and test things, and they'll scale what works and scrap what doesn't. So they'll be scaling different things to stores. And I was mentioning some of the things when it comes to shopping online and in stores, bringing a lot of their apparel that you can find in-store to the online, and using handheld devices, new signage to navigate, and pick and pack and ship those orders faster. That's something that you're going start to see.

Another thing, if you're a Walmart associate, one of the challenges has been going in the back stock room and kind of figuring out-- you have to manually scan barcodes to figure out which product to put back on the shelves. And now they're using these apps that they can scan using AR technology-- Augmented Reality-- and it will flag and highlight which boxes are ready to go on the sales floor. They're going to scale that technology to the 4,700 stores in early 2021.

And they're also doing a lot when it comes to the checkout. The checkout experience is going to be a lot different. You're not going to see those lanes that you're used to. It's going to be more of-- I guess, rather than transactionally, they kind of call it more relational. Just you're not going to see the traditional checkout lanes as you go through. So it'll be more of a contactless experience as well.

So I think it's interesting. Walmart, again, using their 4,700 stores as kind of mini-warehouses, if you will, in this kind of war against Amazon, this retail war that we're seeing as this move to contactless experiences, more online shopping. I think it's neat to see this kind of player be very entrepreneurial here, and leverage what you've got, and really invest in it.

JULIE HYMAN: Well, we'll see if investors think it's neat as well, Julia. Thank you.