Nearly every single US consumer shopped at Walmart in 2016 – what’s its secret?

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  • Date:
  • Sector: business model, customer loyalty, hypermarket, retail, Walmart
  • Posted in: Trends

Whilst Walmart is out there winning the hypermarket game, other retailers are collapsing around it. In 2016 95% of US consumers shopped at Walmart. The brand also employs an impressive 1% of Americans; 2.2 million people to be exact.

As the largest retailer in the world, Walmart has stuck to the same core message since opening its doors in 1962: low prices on a large scale. Appealing to everyone, Walmart sets-out to help its customers save money and this applies to everything it does. As stated in Forbes, “Because of Walmart’s ability to effectively fulfil its purpose, customer loyalty is strong and personal.”

Not only does the retail giant have a solid structure and brand message, it has an omnipresence, especially within the US. 90% of Americans live within 15 miles of a Walmart store. This greatly increases the probability of consumers choosing them to purchase from; boasting the best prices and never more than 20 minutes away.

Image courtesy of Atlas 

Looking forward, Walmart is set to expand on its already billion-dollar empire. Market Watch reported earlier this week that Walmart’s expectations for e-commerce growth are sky high; reported by UBS analysts as expecting a 40% growth. Its expansion of same-day delivery through Walmart Spark Delivery shows that its moving into the rapid delivery space to compete with competitors such as Amazon Prime.

The inner workings of the billion-dollar company are as integral to its success as its customer-facing facets. It has a supply chain system that is regarded by many as one of the most technologically advanced. As a pioneer in smooth running inventory databases, Walmart mastered the goal of knowing what was needed, when, and how much.

Back in the 1980s, Walmart moved to deal directly with suppliers. These suppliers were then in charge of inventory management, prompting a smoother flow which in turn, made sure products requested by customers were always stocked and on the shelves. This shift in responsibility resulted in a more cost-effective process and this translated to even lower prices for Walmart customers.

Walmart in Ontario, Canada. Image by Kathy Dewitt 2012. 

Ahead of the game, Walmart’s point of sale data runs in quick time. Shifting inventory levels to a centralised database, suppliers can easily access the information, so they know when to ship more products. These all work in tandem to ensure Walmart can function swiftly; low prices on a big scale and items rarely running out of stock. A cost-effective work flow behind the scenes means competitive and affordable prices for its loyal customers.

Walmart keeps its overhead costs to a minimum and somewhat controversially, this sometimes comes at the expense of its employees. Its comparatively low wages, and alleged tendency to ask workers to work overtime for no extra pay are two ways they keep these costs to a minimum. Even heating and cooling of the buildings are sometimes sacrificed for the sake of minimising these operational costs.

This last tactic has somewhat tarnished the brand identity of Walmart in the public eye, although not enough to greatly infringe on their profits.

What is the secret to the success of Walmart? It stays true to its purpose by executing it in everything it does. Sam Walton, found of Walmart, told his employees “If we work together…we’ll give the world an opportunity to see what it’s like to save and have a better life.”

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