2Note: List not exhaustive

Innovation has powered Walmart’s success

$1 $10$100

$200

$300$400

$500

1960s 1970s 1980s 1990s 2000s 2010s

Walmart sales(in billions)

• Mr. Sam opens first Walmart in 1962

• Strategy built on unshakable foundation: the lowest prices anytime, anywhere

• Pharmacy

• DC computers with “virtual memory”

• Electronic cash registers

• Company-wide computer network with merchandise ordering systems

• Supercenter

• Computerized point of sale systems

• Handheld shelf-scanning terminals

• Satellite network

• “Store within a store”

• Rollback America

• Retail Link vendor support system

• Walmart.com

• Neighborhood Market

• International division

• Data exchange with suppliers

• Radio-frequency item tracking

• Sustainability goals

• $4 generic drugs

• Site to Store service

• Small store formats

• @WalmartLabs

• Grocery pickup and delivery

• Walmart Pay

• Unattended delivery

3

Sam Walton’s 10 Rules for Building a Business

1. Commit to your business

2. Share your profits with all your associates, treat them as partners

3. Motivate your partners

4. Communicate everything you possibly can to your partners

5. Appreciate everything your associates do for your business

6. Celebrate your success

7. Listen to everyone in your company

8. Exceed your customers’ expectations

9. Control your expenses better than your competition

10. Swim upstream

Innovation begins with our associates

Innovation from our associates is part of our DNA

4

Retailers rise and fall over time – innovation needed to stay ahead

1970 1980 1990 2000 2010 20181.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Source: BloombergNote: Rankings based on U.S. retail sales in retailer fiscal year that best aligns with calendar yearRankings exclude: PBM for CVS, pharmaceutical wholesale for Walgreens, AWS for Amazon

5

Four trends driving innovation with connected, empowered customers

Changing Consumers

§ Urbanization§ Aging Population§ Rising Millennials & Gen Z§ Rise of the Individual§ Growing Income Disparity

New Consumption Patterns§ Focus on Health & Wellness§ Desire for Convenience§ Demand for Personalization§ Shift to Services & Experiences§ Importance of Social Media

Tech Advancements

§ Mobile World (5G)§ Internet of Things (IoT)§ Advanced Robotics§ 3D Printing§ Autonomous Vehicles

Structural Shifts

§ E-Commerce Accelerating§ Continued Consolidations§ Direct to Consumer Models§ Economic Power Shifts§ Resource Scarcity

Source: World Economic Forum

6

Our competitors are moving quickly and testing variety of initiatives –here are some recent examples

AI-driven fashion recommendations

Shop-in-shop test with Kohl’s

On-demand delivery

Fast fashionprivate label

Health clinics expansion

Home decor category expansion

Chronic care management

In-store cryptocurrency

7

In particular, Amazon is always evolving…

Source: Bain

8

…as it continually innovates to enter new categories and businesses (even though not all are successes, they test and learn)

* = EstimateSource: Bain

/ NOT EXHAUSTIVEAmazon’s Products and Services

Abandoned

9* = Partnership or joint venture

Walmart is also growing assets and capabilities beyond core retail

First party eCommerce MarketplaceStores

Fina

ncial

Se

rvic

es

Logistics

Social / Loyalty

Digital

Entertainment Home and Seasonal Services

Health and

Wellness

Adve

rtisi

ng

10

Our long-term Walmart US omnichannel strategy is to consistently deliver a winning value proposition for our customers

Grocery & Consumables

Made easy and fast in a way that deepens our relationship

with the customer

General Merchandise

Meet our customers’ most important needs in key

categories

Consistently deliver a winning value proposition for our customers

Services

Simplify access and affordability for customers

Omnichannel: fully-integrated shopping experience uniting customer experiencesfrom our stores to our app and everything in between

11

We need to understand our customers to better serve their needs –busy families are looking for ways to save time and money

MAJORITYcite money & bills as biggest source of stress in their lives

LESS LIKELYto say they’ll spend time to

save money

MOST LIKELYto consider customer service

in their purchase decisions

THEY NEED TO KEEP TO A TIGHT FAMILYBUDGET

THEY NEED TO REDUCE THEIR TIME SHOPPING TO MAKE TIME FOR OTHER NEEDS

THEY NEED ACCESS TO THE BEST POSSIBLE QUALITY & EXPERIENCE

Example Pain PointsNervous they will forget

something and wish there was an easier way to list out what they

need every week

Frustrated they will have to make another stop because Walmart didn’t have what they wanted

Overwhelmed navigating store and finding forgotten

or last minute items

Impatient and stressed byparking lot, checkout line,

return line, etc.

30% List “offers the best pickup / delivery” as key purchase criteria

55% Say owning quality brands is important to them

68% Set a budget when shopping

12

We continue to test different initiatives to bring our strategy and customer value proposition to life

Grocery & Consumables General Merchandise Services

Next Day Delivery

Unattended Grocery Delivery

Express Money

Services

Express RxAutomated

Click & Collect

CurbsidePickup

Store MapsInventory Scanning

RobotEasy Returns

/ NOT EXHAUSTIVE