10 Things To Learn From Walmart Merchandising
In the 21st century, retail business has become the “ultimate competitive battleground.” The battle for retail business is fought by retailers on many fronts, including price, variety, quality, and service. Walmart is a global retail giant known for its customer-friendly prices and wide range of products. Even with the challenges of an ever-changing post-pandemic market, Walmart never stopped being profitable. At US$548.743 billion, it is the largest company by revenue. How did they reach this impressive number? Let’s look at 10 great Walmart merchandising strategies that pulled the customers in:
- Omnichannel retail
In 2021, any business would be hard-pressed to survive on a brick-and-mortar model alone. Ecommerce is booming, and it is generally a good idea to have both offline and online stores. Walmart was able to procure some of the bestsellers by providing incentives for selling via the Walmart online platform. Online stores are also great for moving surplus stock out of warehouses. Traditional stores can accept returns for online orders. All of this is achieved with cutting-edge IT systems that track items in transit and in the inventories. Each channel plugs the gaps in the other. Sometimes, store employees even drop off online purchases on their way home!
- Innovative Supply Chain
Walmart has pioneered cross-docking in the supply chain strategy. It implies that the supply is given directly to the customer or to the next mode of transport, with no storage stage in between. They place distribution centers close to the warehouses in order to achieve this. This removes storage costs and reduces labor costs. It is also on the lookout for the next innovations in supply chain management and pivots fast when any cost-saving strategy comes up. Walmart has already seen a 21% increase in fuel efficiency and a 6.5% reduction of empty vehicle miles. Eliminating middlemen and storage costs have proven to be a very beneficial strategy.
One of the major selling points of Walmart is that you can buy items in every category. You can literally walk out with the week’s groceries and a new TV in the same go. Other discount stores, such as Costco, operate majorly in the grocery sector and do not provide as broad a range as Walmart. This really helped Walmart during the pandemic—when you are trying to avoid contact with people, having to go to only one location is safer, easier, and more cost-efficient. Walmart constantly adds new categories so that the customers come to them. For example, it recently acquired Modcloth to provide competition to Amazon in the online garment space. Now that the economy is opening again, Walmart is making more categories of products available in both online and offline stores.
- Keep the prices low!
From the very beginning, the most attractive feature of Walmart is that it provides value for money. The very slogan of Walmart has been, “We save people money so they can live better.” This singular focus has driven all other strategies-from acquiring local brands to managing supply chains. Walmart monitors frequently bought items constantly, and strives to provide those at competitive rates. It has earned this reputation as well—66% of surveyed customers agreed that Walmart provided “best value for money.” While retailers with middle-of-the-road pricing took the worst hit as the pandemic slowed the economy, the budget stores kept thriving. Additionally, since Walmart has the reputation of being a non-intimidating, family-friendly store, teen shoppers with limited cash tend to prefer Walmart.
- Know thy customer
Walmart invests in shopper data, both demographic as well as psychographic. It does not use differentiation, though. Walmart treats absolutely everybody as a potential customer. Walmart keeps track of the real-time sales data through a software called Retail Link. This software provides daily updates and analyses of the purchasing behavior of customers. Data on most frequently bought items feeds into their “everyday low price” strategy, and they are able to sell the most desirable items at the most competitive prices. They also adopt different strategies in different countries to play to the exact demographic at hand. Online shopping behaviors are increasingly driven by personalized experiences for consumers, so knowing the customer can boost online engagement.
- Going Global
Since 1991, Walmart has pursued global sales aggressively. As the markets of the USA became saturated with superstores, countries like Mexico had their markets wide open. Walmart moved into many countries by acquiring retail chains that were already popular with the customers. Lower-income countries provide a huge opportunity for budget stores, and Walmart has used these opportunities intelligently. On the supply side, many international sellers rely on Walmart to buy their goods. Walmart makes up to 20% of revenue for some sellers. This gives Walmart immense bargaining power. As more nations get industrialized, Walmart can always tap into a newer seller to get what they need.
- Social Media
Great reviews on social media platforms can be key to the public perception of the company. Walmart’s Spotlight program gives incentives to interns and employees for social media posts advocating for Walmart. TikTok is fast becoming the preferred platform for influencers promoting Walmart. These social media posts are very effective in spreading information about the latest Walmart services and discounts. In a world where live stream shopping events are becoming the next trend, it is important to influencers who know how to leverage the media platforms.
- Keep overheads low
Going global before the competition opens up hiring opportunities. Walmart outsourced jobs to countries where wages are traditionally low. Even in the USA, Walmart executives do not have many perks that are common in other big businesses. Walmart’s suppliers span the globe—they have 2800 suppliers from 27 countries. Bulk buying further drives down the cost. Since they have many locations, the transportation costs are also low as compared to other retailers. Suppliers are encouraged to run integrated ad campaigns to lower the cost of promotions as well. Sometimes, Walmart will even sacrifice profit for the sake of the growth of its network and to tap into technical solutions that cut overheads in the long run.
- Reach where competitors haven’t
In the online space, competition is fierce. Amazon is an established giant that operates very much in the same retail space as Walmart, Amazon and has already set expectations of free and fast delivery. So, Walmart now boasts of the best customer service that a buyer can be given. Additionally, the same best-value strategy that is seen in offline stores is given online. Walmart has started delivering in locations where other services are simply not available: rural areas and the suburbs. This has led them to capture an additional slice of the market. At this point, 90% of the US population lives within 10 miles of a Walmart store. Add to this a fleet of trucks that can ensure timely delivery even in far-flung areas.
- Leverage Technology
Walmart was one of the first businesses to have barcodes on their products. This gave them a significant advantage over their competitors in the 1980s, since most other stores were still generating bills manually. In contrast, Walmart checkouts were breezing through, making it attractive for the customers who had to spend less time waiting in the checkout lines. They could also do with fewer cashiers since a major part of the process was automated. Such early adoption of labor-saving technology is a lesson that we can all learn from Walmart. Recently, Walmart’s mobile phone app has rolled out new features, such as lists that the customer can make in a natural language. It is also introducing automation into store inventories by having restocking robots pack shelves efficiently. Even though some app features, such as Walmart pay and scan and go, were not as successful as hoped, Walmart keeps pushing for innovation, learning from past missteps.
Walmart is a well-oiled machine, one which is constantly updating itself to keep its place as the top superstore. If it can successfully build a low-cost, vertically integrated, worldwide chain, why can’t other retailers do the same? Some academics have called Walmart’s strategy the 4Ps marketing mix – price, place, product, and promotion. Walmart has truly mastered these four aspects. We can all learn the best of retail business practices from Walmart—to stick to the core motto of the company. In Walmart’s case, it is to provide the best value, but you can adapt it to whatever the most fundamental practice of your business might be. Keeping a lean, adaptive supply chain and becoming early adopters of technical innovations is key in keeping up in today’s competitive retail environment. It also helps if your strategy can adapt to the ups and downs of a volatile economy and win customer loyalty during any economic climate.
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