While the brouhaha over Lore’s acquisition strategy caused outsize turmoil, perhaps the most damning issue for Walmart leaders like Foran and the company’s chief financial officer was that Lore and his deputies kept missing internal projections for the e-commerce division’s business performance.
In Sam Walton’s autobiography, he wrote, “I have occasionally heard myself compared to P. T. Barnum because of the way I love to get in front of a crowd and talk something up—an idea, a store, a product, the whole company—whatever I happen to be focused on right then. But underneath that personality, I have always had the soul of an operator, somebody who wants to make things work well, then better, then the best they possibly can.”
Few who have spent considerable time around Lore can argue against his excellence at promotion, cheerleading, and vision-setting—some might even call it Walton-esque. The reason that so many talented people agreed to work for the entrepreneur, so many successful investors agreed to fund him, and so many consumers shopped from his companies is that he was outstanding in this role. He was a world-class vision-crafter and promoter.
But inside Walmart, more observers started questioning whether he or anyone else on his team had the operational skills to back up all that big talk. For a logical and disciplined leader like Foran, the e-commerce division’s money-losing ways—as well as the leadership team’s inability to hit internal projections—was inexcusable. Operational excellence was as core to Walmart’s culture as anything. But to Lore and his deputies, it appeared to be a sideshow.
“It’s one thing to miss your plan, but to not know you’re missing a plan is a cardinal sin,” a former Walmart logistics executive told me. “You’re ceding credibility as a management team because at a certain point that says you don’t understand your business.”
The challenge for the e-commerce division at the time, according to leaders from that period, was multifaceted. For one, they said, top Walmart officials often took the internal goals that the digital leaders had set, and pushed them to unreasonable heights. The other issue was that they believed they were swimming in a much more volatile ocean than their counterparts running the physical stores, especially considering the dominance of their No. 1 rival, Amazon.
“We’d go and we’d say, ‘Here’s the number that we’re confident with,’” a former e-commerce executive told me. “And I think any good manager would be like, let’s do more than that. But Bentonville would come back with a number that we’re just like, ‘That’s nothing that we think that we can achieve.’”
Repeatedly, Lore’s division would not reach the goals set out for them, leading to tension that “permeated everything,” the executive said.
The misses on the e-commerce side also affected bonuses for executives on the stores side. Foran’s annual performance bonuses, for example, were heavily tied to the operating income of Walmart’s US business, which included the e-commerce division that Lore ran. But that operating profit didn’t factor into Lore’s annual bonuses—the entrepreneur was mostly judged on sales growth, no matter the impact to the bottom line.1
Lore later admitted to me that the divergent incentive plans were a fundamental problem with the structure inside Walmart at the time. Sure, store leaders wanted to cut costs and hit profitability goals so they could provide Walmart customers with lower prices, or store employees with better wages. But you don’t rise to that level at a company like Walmart without yearning to accumulate more wealth for yourself as well; in short, bonuses mattered—a lot. And if it wasn’t bad enough that Lore’s money-losing ways reduced the compensation that Foran took home, the accomplished retail operator also had to accept the extraordinary compensation package Lore secured before he even walked in the door.
During Walmart’s 2017 fiscal year alone, Lore’s compensation totaled more than $240 million, the majority of which came from the value of restricted stock units that the company granted the entrepreneur as part of the Jet acquisition. Walmart also agreed to pay Lore nearly $500 million in cash for his ownership stake in Jet.
Meanwhile, Foran earned around $11.5 million in total compensation for the same year, though he ran a much larger business in terms of both sales and profit. Colleagues say that Foran found the disparity galling. On several occasions, Foran referred to Lore as “the $3 billion man” when talking to colleagues. At other times, he wondered aloud half-jokingly whether the flashy entrepreneur’s stock package was owing to him secretly being a long-lost cousin of the Walton family.
Innovator or Operator?
With this as a backdrop, panic would spread through senior e-commerce ranks as another quarter was ending and the results were looking much worse than company leaders were expecting. So, in the lead-up to the 2018 holiday season, e-commerce leaders under Lore instructed employees working on Walmart’s marketplace business—the division that signs up small brands and merchants to sell directly to consumers through the Walmart.com website—to convert hundreds of millions of marketplace sales in just thirty days into drop-ship vendor (DSV) sales.
What this meant, in practice, was convincing merchants selling through Walmart’s marketplace to relinquish control of the pricing of their products on Walmart.com, in exchange for a label that marked their products as “sold by Walmart” on Walmart.com—a label that increased the likelihood of a shopper buying a given product.
Those familiar with the directive said it seemed designed to boost revenue for Walmart since Walmart recorded an entire DSV product sale as revenue, while, for marketplace sales, just Walmart’s commission of 8 to 15 percent of the purchase price was recorded as revenue. One person familiar with the initiative said it seemed “obvious” that it was a last-ditch effort to hit some type of big internal financial goal.
Even with this type of financial maneuvering, the e-commerce unit missed its goals that holiday season. Also, the unit lost more money than planned two years in a row under Lore, while the profits generated by Foran’s US stores unit seemingly helped fund Lore’s risky initiatives. At one point, the e-commerce division lost around $2 billion in a single calendar year.
“The internal narrative became that Marc couldn’t hit both numbers at the same time,” an insider told me. “It cost political capital. The honeymoon was over.”
The idea that Lore couldn’t run a profitable business also appeared to have been encouraged by his previous employer. In 2017, Amazon shut down Diapers.com and its parent company Quidsi, which Lore had sold to them six years earlier, and folded the website into the rest of Amazon.com. At the time, an Amazon spokesperson released a statement that read in part, “We have worked extremely hard for the past [six] years to get Quidsi to be profitable, and unfortunately we have not been able to do so.”
It was extremely rare for a notoriously tight-lipped communications department to publicly discuss the finances of one of Amazon’s smaller business units. It also was extremely odd, considering the fact that Quidsi was on track to generate significant free cash flow by the end of 2018, as sources later told me.2
Years later, I asked a former Amazon executive familiar with the decision about Amazon’s public reasoning for shutting down Quidsi. The executive paused. He eventually managed an uncomfortable smile. “It was not very Amazonian,” he said. “It was an unusual quote. For a lot of people, it stood out.”
For former Quidsi executives, the motive seemed clear: to send a message to Wall Street investors and Walmart leadership that the executive they had just spent $3.3 billion on couldn’t run or build profitable businesses. But amid the internal fallout following the 2018 holiday season at Walmart, e-commerce revenue chief Scott Hilton took the fall and was pushed out, while Lore, the $3 billion man, remained.
“At the end of the day, Marc had the public persona and access to people in Bentonville,” an insider told me.
Still, by 2019, Lore was growing tired of the restraints being placed on his unit and what he saw as increased bureaucracy slowing down important initiatives. He was irked, perhaps most of all by the idea insinuated by McMillon and some board directors that he was only an innovator and not an operator with the chops to make the e-commerce business predictably profitable. Perhaps in an attempt to acknowledge his critics while also thumbing his nose at them, Lore took to wearing one of two hats around the office. One was inscribed with the word “Innovator” on the front and the other with the word “Operator.”3
Some saw the hats as a way to innocently message to his own teams that they needed to take both types of roles seriously to be successful at Walmart, and for Walmart to be successful in this new age of Amazon. Either way, both hats were retired for good after the e-commerce leader wore one in a meeting with store employees and someone in attendance notified a superior that they thought the hat was insulting.
Years later, Lore was diplomatic in discussing any rift with Foran and assigned blame elsewhere.
“I think we did have a good relationship,” Lore told me on one occasion. “It was a lot of stuff coming from people in the organization. Stuff would come up to Greg, like, ‘Do you hear what Marc’s doing?’ And then Greg was like, ‘Wait, what?’ And a lot of the stuff wasn’t true.
“But it just wears on you that you have to keep doing that,” Lore added. “If every conversation we have is defensive like that . . . it just gets tiring. I think he was tired. I was tired.”
The passage of time seemed to soften Foran’s outlook as well, in a departure from what Walmart insiders observed years earlier.
“As to be expected in any organization during a phase of rapid transformation, naturally there are tensions and plenty of healthy debate,” he wrote to me. “Quite often that is how meaningful progress is made.”
Lore said the brick-and-mortar expert understood that the future of Walmart was one that, ideally, meshed the best of the stores business with the best of what online tools could offer. He said a bigger problem was the tribalism that had formed within the stores team, mostly based in Bentonville, and the e-commerce division, based in offices along the coasts.
Old School versus New School. Profit versus Growth. Huge compensation packages versus—well, extraordinary compensation packages. It was a culture clash as old as business itself. But it was threatening to eviscerate the momentum Walmart had been building while stepping out from Amazon’s shadow.
“That’s why I was always telling Doug, ‘We’ve got to bring these orgs together,’” Lore said.
The plan was always to eventually unite the Walmart e-commerce and stores teams under one leader, and Foran wanted that role. But McMillon resisted.
With his path to more power and more control over the destiny of Walmart’s US business blocked, Foran eventually opted to leave Walmart for a flight home and a new role to boot: CEO of Air New Zealand. He would finally occupy a chief executive role that oversaw an entire corporation, one that returned him to his home country—but also one far afield from the only industry he knew.
Three years later, he declined to address the desire he had expressed internally to run both the store and e-commerce divisions.
“I absolutely loved my time with Walmart,” he told me, “and at the end of almost a decade felt like I’d done what I’d been brought in to do: reinvigorate both the Walmart China and Walmart US businesses, deliver significant tangible results, and position both businesses for continued growth.”
In his place, McMillon and Walmart’s board tapped John Furner, a younger executive who, like McMillon, all but grew up inside Walmart and was coming off a stint as the CEO of the Sam’s Club division, like McMillon once did. Sam’s Club often served as a testing ground for new technologies as well as experiments in organizational structure, which gave Furner some tech credibility. Furner’s Walmart roots were also deep—his father had been a Walmart store manager himself. With his background, Furner was viewed as one of two or three potential successors to McMillon when the CEO decides to move on.
With Foran exiting, Lore and Furner quickly eliminated one of the past causes of friction: bonuses. Each of their bonuses entailed the performance of both digital and physical stores. Within a year, Lore’s organization began reporting to Furner. With Furner’s takeover, speculation ramped up about whether Lore would make it the full five years at Walmart that he had signed up for when he and McMillon struck the Jet deal in the second half of 2016. Such speculation had actually begun less than a year after the Jet acquisition was first consummated, but the rumors got louder in late 2018 into 2019. At one private social gathering attended by Lore, former Jet executives even placed bets on how long their friend and former boss would last.
The timing wasn’t a coincidence. From late 2018 into early 2019—about halfway through Lore’s five-year Walmart agreement—it became clear to some executives below Lore that his voice didn’t carry the same weight it once did. E-commerce staff were shocked, for example, when Lore aggressively pitched an idea for a Jet.com physical store in New York City, yet was still rebuffed. Others couldn’t believe that he couldn’t get sign-off for the sortation warehouse expansion, championed by former Amazon exec Mike Indresano, when many had long thought it was a sure thing.
After e-commerce losses ballooned in 2018, McMillon delivered Lore a new, harsh reality: you need to stem the bleeding. Lore once reportedly quipped to reporters that Foran “makes the money; I lose it.”4 But Walmart’s other leaders weren’t laughing. With McMillon and the board tightening his leash, Lore began pulling back on many of his most aggressive plans, including the acquisition strategy around digital-native brands run by Bonobos’s Andy Dunn. Some insiders say part of this was a strategic move by Lore—that he chose to partially disconnect and stop challenging some disappointing decisions on expensive investments so the stores and e-commerce divisions could quickly unite under Furner. He also hoped that Walmart might let him out of his five-year agreement early to get back to his startup ways if he stopped rabble-rousing.
But it wasn’t only Lore’s free-spending ways in business that ruffled feathers in Bentonville. His flashy city lifestyle didn’t help, either, considering the modesty with which most longtime Walmart executives carried themselves back at the home office. Lore, at times, recognized this.
When the news broke that he had purchased a nearly $44 million Manhattan penthouse apartment,5 making him a neighbor to celebrities like Jennifer Lawrence, Lore was furious. He had tried, but failed, to conceal himself as the buyer, and he knew what the perception would be back in Bentonville. After all, Sam Walton himself had made his opinion on the matter abundantly clear:
“We’re not ashamed of having money, but I just don’t believe a big showy lifestyle is appropriate for anywhere, least of all here in Bentonville where folks work hard for their money and where we all know that everyone puts on their trousers one leg at a time,” the Walmart founder wrote in his memoir. The ethos of frugality ran deep inside the company.
On another occasion, Lore showed up at Teterboro Airport for a flight to Bentonville on one of Walmart’s private jets. He pulled up to the airport in a Bentley car, which typically costs at least $150,000 on the low end. He was also accompanied by his then-girlfriend—Lore and his wife had recently divorced—and the pair, each sporting designer shades, looked like a Hollywood power couple.
One of Lore’s fellow passengers apparently didn’t like what they saw, and the anecdote made its way all the way up to McMillon, the CEO. In a subsequent meeting, McMillon requested that Lore act more low-key—the Bentley came up in the conversation. It wasn’t clear what the specific problem was, but Lore later told confidants that he thought the fact that he was divorced and traveling with his girlfriend was not a welcome turn of life events at a company like Walmart, where some newcomers believed religion and the sanctity of marriage were held up on a pedestal as much as the Everyday Low Price guarantee.
It probably didn’t help Lore’s cause that, on another occasion, he was spotted being a little too affectionate with his girlfriend in public at one of Walmart’s annual shareholder meetings. For all of his entrepreneurial brilliance and empathetic leadership qualities, Lore at times baffled longtime friends and Walmart executives alike with actions or commentary that appeared naïve or out of touch. He was proud of the fact, for example, that he didn’t read much outside of what was directly necessary for his job.
“Reading takes time away from thinking . . . you get a little brainwashed,” he once told a group of Harvard business students. “I like to talk to people, take in the world, think about stuff, and think about a better way.”
The Lore Goodbye
Finally, in early 2021, a Walmart spokesperson reached out to me with a message: Lore was departing the company—a little less than a year ahead of schedule—and wanted to talk to me about it before the news went public. In our discussion, Lore spoke positively of Walmart, and encouraged its leaders “to continue to be bold and not be a follower.”6
“The fast-follower strategy is not going to get it done,” he said.
He acknowledged that the failed acquisition program he had once heralded was his biggest disappointment. But he added that he had hoped “people think about Walmart a bit differently than they did four and a half years ago.”
Months later, I asked Lore in a phone call whether he ever got complete buy-in for his vision of what the Walmart of the future could, even should, become. The short answer: not completely.
“There were just so many voices, and key people with different opinions . . . and I wasn’t the CEO of the overall company where I could sit people down and say, ‘Okay, we’re gonna keep banging on this vision,’” he told me.
But he said he believed that most top executives still at the company believed that the e-commerce division was on a path to become quite profitable in the future—something that Foran wasn’t shy about proclaiming would never happen when he was at the helm of Walmart stores.
“That’s half the battle,” Lore said.
In many ways, McMillon’s bet on Lore and Jet was a success. Under Lore, Walmart.com grew into the clear No. 2 online shopping site in the US after Amazon, having doubled its market share for online sales during Lore’s tenure. The merchandise selection on Walmart.com, thanks in part to some of Lore’s less sexy acquisitions, also grew to eight times the size of the product catalogue he had inherited. Walmart’s delivery speeds also improved.
Even store leaders cheered the impact on Walmart’s stock price. It increased more than 80 percent from the time of Lore’s arrival, and the company’s price-to-earnings ratio—which compares the stock price to company earnings per share—doubled, signaling that investors believed the company had a positive growth outlook still in front of it.
The company’s industry reputation also improved. Technology executives who never would have considered joining the retail giant stopped viewing Walmart as the digital dinosaur it once was. Lore and his team had indeed succeeded in changing the Walmart narrative, both in the press and on Wall Street, where many leaders still thought it mattered most.
But that glass-half-full view of Lore’s Walmart tenure is only part of the picture. Walmart’s e-commerce sales, though second only to Amazon’s, still were around six to seven times smaller than the tech giant’s at the time that Lore announced he was leaving. What’s more, if you were grading some of Lore’s most ambitious bets, including the digital-brand acquisition strategy and the startup incubator, you could make a case for handing Lore a C or D. Perhaps an Incomplete if you were being generous. Jet.com also shut down and the once-heralded Smart Cart innovation never surfaced on Walmart.com in a meaningful way.
Across the board, Walmart leaders told me that the culture clash between Lore and Foran was understandable, if not expected. They made the case that if either of the executives had controlled the other’s division, Walmart would be in a much worse place than it is today. But did Walmart really get its money’s worth by spending $3.3 billion on Jet and billions more on new e-commerce leaders and the programs they led? From a stock price and narrative perspective, the answer is clearly yes. And in the world of megacorporations and megacapitalism, maybe that’s enough.
But there are other perspectives that are worthy to consider, and those are where the what-ifs lie. What if Doug McMillon had intervened more often between Lore and Foran to unlock stalemates that slowed down decision-making and, thus, progress? What if Lore had leaned more aggressively into new ideas that took advantage of Walmart’s biggest differentiator from Amazon—its stores? And what if McMillon didn’t wait more than three years to unify the two divisions and cultures under a single leader who could bridge the gap and execute on a single vision of reinvention?
“I get questions about, ‘Did you leave that separate too long or just the right amount?’” McMillon said in early 2022, seated across from me inside the CEO’s office that Sam Walton once inhabited. “You guys can figure that out over time; I don’t know. But I’m convinced keeping it independent and separate for a period of time was necessary.”
Perhaps in the end, what mattered most for Walmart is that a single leader was responsible for the entire US business—stores and websites alike—by the time a global pandemic upended Walmart’s business, and all of our lives, in the year 2020.