Walmart is always looking forward to a market place where it can apply its selling strategies. These have accelerated the business model of Walmart. People often wonder how Walmart uses the marketing mix for its growth. Well, this article will guide you towards Walmart’s selling strategies and also discuss the various marketing mix of the company.
The retail giant Walmart has had some interesting business strategies over the years. This article will go through some of their biggest strategies and discuss what worked and what didn’t. It’s also important to look at the failures of a big business and to learn from them. By looking at the business strategies of Walmart you can see where they have gone wrong or what they have done right.
History Of Walmart And Its Selling Strategies
Walmart is one of the top retailers operating today. Walmart’s selling strategies are famous all around the world. But, have you wondered who started Walmart? Why do people prefer buying items from Walmart? Well, keep on reading further. Walmart was started in 1962. A person named Sam Walton thought of starting a retail store. In the early days, Sam Walton served in the military for a few years. Eventually, he learned how a retail store works and decided to open a store. The first store was opened in Arkansas. Slowly, they grew big and they started operating 24 stores. In 1970, Company changed its name to Walmart, Inc. The name was changed many items in these years and finally, they settled down on “Walmart Stores, Inc”. In 1972, the company for the first time listed its shares on the New York Stock exchange.
The price of one Walmart share at that time was $16.50. Now, the prices of Walmart are rising high. In 1980, they started a Walmart Family Foundation when they touched $1.6. Eventually, they realized that they need to change the cash register. In 1983, Walmart started using Point-of-Sale systems. The most awaited change was when they installed a private satellite communication in the US. Sadly, in 1992, Sam Walton passed away. Years after, Doug McMillon was appointed as CEO of the company.
Principles Of Walmart Selling Strategies
The principles lay the foundation or base of a company. Walmart’s selling strategies are becoming popular because the company has strong core values. These values also become very important for the company as they help them to achieve its goals. Even Walmart has its own set of rules and values. Some are discussed below.
The main principle of Walmart lies in the customers. Customers are the king of the market. Pleasing and convincing them will make them buy from you. Even Walmart has the same thinking. Walmart considers Its customers to be on top. They work hard so that customers do not leave their store easily. That’s the main reason why they offer so many discounts. And customers love discounts. When people find items at a cheaper price, they wish to buy more. This is also a psychological fact that when a human sees a discount, he tends to buy items even though not needed. This is one of the main moves of Walmart’s marketing mix.
Frontline workers is a very common word used in corporates. But, who are frontline workers? Do Walmart’s frontline workers form a part of their selling strategies? Before that, let’s know who are frontline workers. Frontline workers are basically people who work daily and they are always in front of your eyes. For eg, in a store, the staff you see are the frontline workers. Frontline workers also form a big part of Walmart or any other store. They are the lifeline of Walmart. These workers strive hard to provide a better shopping experience to customers. Walmart sees to it that the staff is always happy and contented. Because if they are happy, they will try to give their best. And this will eventually lead to a better consumer experience.
Innovation is what drives the company. It is an important aspect of Walmart. Walmart has brought various innovative changes in its retail selling strategies and marketplace. One such innovation is Voice search. You might have heard about Google assistant. It works the same way. For eg, assume you’re baking a cake and you realize that you don’t have cocoa powder. What will you do? Well, Walmart search comes to your help. So, when you’re out of stock, you have to simply say “Order Cocoa powder”. This will add items to your cart and in the same way you can schedule your grocery and there you go. Walmart also launches GoLocal, a home delivery service. Yet, there are many more innovations powered by Walmart. The main aim is to create a good experience in Walmart’s market place.
Business Model Of Walmart
The main game lies in the business model of Walmart. Walmart works on two main strategies. The first is to create a One-stop shopping experience for the people. And, the second is to provide products at a lower price. Honestly speaking, this has boosted the sales of the company. Thus, it has become an important strategy of Walmart’s marketing mix. To be specific, there are three main components of the Business model of Walmart. Here’s the list.
Walmart U.S is one of the largest segments or parts of the organization. There are overall 50 stores in total including stores in the U.S., Washington D.C. and Puerto Rico. Walmart’s main selling strategies involved is to provide physical access to the customers. In other words, you can roam the entire store like you do in supermarkets and shop whatever you want. There are various items related to the category like Grocery, Health, Entertainment, Home appliances, etc. Along with that, they also provide various services. You can also have access to the stores online through their app. These stores have also started “Walmart Pickup“. They basically pick up your grocery and deliver them to your home.
Walmart International basically tries to operate in foreign countries. They try to open their stores in every country as possible. To date, there are stores open in more than 27 countries. It comprises 3 categories namely retail, wholesale, and others. These stores are opened either through joint ventures or wholly-owned subsidiaries. It means two or more companies or people come together and decide to run a company. That’s called a Joint-Venture. People can access these stores that are running in 156 facilities. Just like Walmart U.S, they also provide a Pickup facility.
The third and final segment of Walmart is the Sam’s Club. From the name itself you can guess that it was opened by Sam Walton. He opened the first store on April 7, 1983, in Oklahoma. Just after 21 years of opening Walmart. As of now, they operate in 44 states in the U.S state. They take care of the membership-only warehouse clubs. In other words, they provide subscription services to customers or business owners. It’s a vital component in terms of operating income as Sam’s Club generates about 12% of its net sales in 2018.
What Are The Core Walmart Selling Strategies
On a global scale, Walmart has more than 11,501 stores. Walmart’s selling strategies are what makes it so successful. Walmart’s online market place now includes more than 100,000 sellers. The surprising fact is that the maximum staff at Walmart comprises women, almost about 55%. The selling strategies of Walmart are discussed below.
Low Pricing Strategies
Well, this has been psychologically accepted that people tend to buy more when they see low prices. For eg, assume your mom going to the store and she discovers there is a discount put up in the next section. And the best part is that the prices are very low. Don’t you think she will buy as much she can and take advantage of this opportunity? This is what Walmart knew. They try to keep the prices of items low so that everyone can buy them not just rich people. Also, they have one of the largest supply chains in the world. This means they can make bulk purchases from manufacturers. Thus, giving them the extra benefit of bargaining power. Therefore, this makes one of the most important Walmart selling strategies.
Deliver Great Experience
Delivering a great experience is as important as any other tactic of the company. When a customer enters your store you need to see that people leave the store with a happy face. Surprisingly, many stores are trying to achieve this. Well, do you know Walmart is successful in doing so? To get this answer, you need to keep reading. Basically, According to Walmart statistics, it tries to employ more than 2.2 billion individuals who will try to improve customer experience. This will ensure a good shopping experience for the customer. Walmart has also announced that it will increase the hourly wage rate of its employees. Thus, employees will be more dedicated to the work.
To live a happy life, we need money along with happiness. We, humans, are very choosy about where to spend money. Thus, if we are spending on something, we hope to get good returns out of it. But, what if you don’t get anything out of it. Didn’t get it right? Well, let’s say you brought nachos from Walmart. When the bag was delivered, you saw that the bag was torn. The packaging of the nachos was also disrupted. You will get angry and complain to the customer service. Now, what if they don’t give you your money back or replace the item. You won’t like to buy from them, right? And that’s what Walmart understood. This was one of best Walmart’s selling strategies that worked well. They knew that customers should be given good quality products. Also, if they fail at any point, they refund 100% of your money.
Other Walmart Selling Strategies
Well, there are also many other selling strategies of Walmart. Walmart has created a good environment of a market place for its customers. This enables them to create a good shopping experience. The company is trying to open small retail shops in every part of the state. Although they open huge supermarkets or discount stores, they don’t want to lose customers at any cost. This will also allow customers to access their stores anytime. Now, they don’t have to travel to a far located store to buy groceries. Walmart is also trying to enhance the marketplace experience of the customers.
Also, Walmart is trying to invest heavily in technology. They believe to live with technology. Along with Walmart Labs, they try to create good innovations that would be helpful to the public. One such innovation is voice search tech. You can order anything by using saying what you want. The product will get placed and you will be able to have it at your doorstep. Walmart has also opened pharmacy stores. They’re the only retailer in the U.S to do so. They also provide healthcare checkups and wellness products.
4P's Of Walmart Marketing Mix Of Its Selling Strategies
Walmart always wants to bring more and more sellers to its marketplace. As of 2021, there are more than 31,000 sellers joined the Walmart market place and the number continues. According to Fortune Global 500, Walmart acquired 1st position, whereas State grid secured the 2nd position. Now that you have learned about Walmart’s selling strategies, let’s dive deeper into the 4Ps of the marketing mix. The 4Ps of Walmart’s marketing mix include Price, Product, Place, and Promotion.
Price has been the major factor in the business model of Walmart. Walmart basically uses the concept of EDLP. EDLP means Everyday Low Prices. It is one of the main elements of Walmart’s marketing mix. Low prices are kept so that everyone can buy items from their store. The company tries to reduce their costs so that the savings of customers increases.
Place matters a lot when you run a business. Thus, it is necessary to open a store at a convenient place so that customers can easily access it. In total Walmart operates 11,847 stores. The business model of Walmart tries to operate stores in every possible location of the country. They use High IT solutions for tracking their delivery and maintaining the items.
Walmart has a larger variety of items in every category that they sell. Its items include furniture, groceries, appliances, hardware, health and beauty items, wellness, sports, and entertainment. Walmart has a strong relationship with its suppliers. This enables them to buy things in bulk from them. It allows them to provide greater prices to their clients. Thus, as a result, it generates more sales.
The last element of Walmart’s marketing mix is Promotion. Promoting and advertising your product helps to reach more people. People become more aware of your company. Walmart uses well-known phrases that are linked to lower prices. “Save money, live better,” “the lowest price store,” “daily cheap price,” and so on are a few examples.
How Does Walmart Earn from Its Selling Strategies?
You might be wondering if Walmart keeps low prices, how do they earn? Isn’t their loss? Well, you’ll get your answer here. The business model of Walmart is making huge profits every year. Here is the list of the different sources through which Walmart earns money.
Walmart sells different items under various categories. The majority of their income comes from them. While Walmart offers items at lower prices, they also earn from it. There are two main reasons behind it. Firstly, Lower prices attract customers a lot. So, when they see items put on sale, they tend to buy products that are not at all needed. Secondly, Walmart tries to buy huge stock directly from the manufacturers and producers. Thus, they get huge discounts from them. And the same discount is passed on to the customers. Walmart offers various items. They are discussed below.
- Grocery: Meats, bakery, dairy, frozen food, and dry supermarket.
- Consumables are also sold, such as beauty and health aids, paper goods, and pet supplies.
- Health and Wellness: Over-the-counter medications and clinical services
- Entertainment: Electronics, toys, cameras, phones, photography supplies
- Hardlines: Stationery, hardware, paints, fabrics, and crafts
- Apparel: For women, men, boys, girls, infants as well as shoes, accessories
- Home: Home furnishings, housewares, bedding, home décor
The business model of Walmart has enabled more revenue for the company. Walmart earns a small percentage of its income from the services they offer. Some services include Financial services, income through movie streaming, and some medical services that they offer. Financial services include money orders, prepaid cards, wire transfers, bill payments, money transfers, and cheque cashing. Walmart also earns income from subscription fees. It includes buying or giving movies on rent, etc. It also provides medical services and health checkups to people.
Financial Figures Of Walmart Selling Strategies
The financial statements of Walmart predict good results as compared to last year. As per the annual reports, Walmart recorded revenue of $571.962 billion as of October 31, 2021. There was an increase of 4.23% as compared to last year. Walmart’s annual operating income as of last year was $22.548 billion. 9.63% increase was observed from 2020. Walmart’s annual net income for 2021 was $13.51B, a 9.21% decline from 2020. The total amount of assets for 2021 was $252.496B, a 6.77% increase from 2020.
Summarizing all of the above, this article discusses the business model of Walmart. Walmart is a huge business in the United States, and it has a strong presence across the entire country. If you have ever wondered about Walmart’s selling strategies, this article provides you with all the information. Walmart’s Marketing mix is what drives the success of the company. Walmart has created a good market place for the customers. Eventually, all the efforts of the staff drive the success of Walmart.