Wal-Mart Stores is an
American Corporation started by Sam Walton, in the year 1950s as a single store
in Bentonville, Arkansas. The company was founded in the 1962 and was
officially incorporated in 1969. From a single store in the United States,
Wal-Mart today has a chain of stores around the world along with holding the
title of the world’s largest retailer in terms of revenue. This growth is
attributed to Walton’s branding strategy of treating the customer as a king.
among millions of people is attributes to several reasons like-
customer price sensitivity (discounts
and low retail prices),
close location to customers
Stocking of a broad range of goods to
facilitate one roof shopping experience.
Since its inception, Wal-Mart has followed its Low
retail pricing strategy. It strives to make sure that customers save a
considerable amount of their money when shopping for any products. Every
product is offered at a lower price as compared to the competitors. Wal-Mart
has been very successful at using this strategy mainly by employing economies of
scale in its operations. Wal-Mart also has discounts, coupons, and customer
loyalty cards that enable one to collect points that can be later used for
b) Convenient Location
Many of the Wal-Mart stores around the world are
located in areas with high turnover. Moreover, most of its branches in the
world stock high-turnover convenience goods in addition to other services such
as gas stations. Convenient locations save customers their precious time.
c) Broad Range of Goods
Wal-Mart stores have broad range of goods from
foodstuffs to electronics and clothes. Almost every product can be found in
Wal-Mart Stores with different sizes, colors, and tastes. The broad range of
products allows customers to choose the product based on income, taste, and preferences
and thus improve the rates of satisfaction. The use of technology such as Radio
Frequency Identification (RFID) and the Barcode has enabled Wal-Mart to
keep its inventory up to date, thus eliminating incidences where customers do
not find the products they have come to buy.
The giant retailer started with greeting the customer to show customers
that they are appreciated. A greeter at the door thanked customers for coming
in, they assisted them with a shopping cart, and gave a “goodbye thank
you” upon departing the store. The friendly senior citizen dressed in the
blue vest conveyed warmth and personality to every guest entering or exiting a
4 Key components of Relationship Marketing:
Ø It has to be personalized. Personalization
can come in the form of a highly targeted direct mail piece, a phone call or
email. Obviously the handshake and a smile illustrated by Wal-Mart greeters
also work well in personalizing the relationship.
Ø It has to be targeted. Wal-Mart invests
money in maintaining relationships with existing customers. By targeting this
group, Wal-Mart establishes long-term relationships with their most loyal
shoppers. Targeting customers through programs that reward loyalty can result
in big returns over the life of the customer.
Ø It has to be meaningful. Your marketing
message has to connect in an emotional way to establish a lasting relationship.
If the Wal-Mart greeter did not look you in the eye while saying
“hello,” the greeting would not have a lasting impact.
Ø It should be interactive. Many Wal-Mart
greeters learn the names of frequent shoppers. Walmart.com, a subsidiary of
Wal-Mart Stores Inc., does a great job of asking for the relationship online by
providing special offers to those who supply their email address. It is
important to make relationship marketing interactive so you can hear feedback,
determine what is working and what is not.
Wal-Mart collects 2.5
petabytes of information from 1 million customers every hour. Wal-Mart has
implemented a data analytics system to channel the flow of information to
improve their operational efficiency and marketing campaigns.
Wal-Mart -Tracking their Customer’s Lifecycle
Wal-Mart’s success in delivering messages informed by data
is largely because of innovations of Wal-Mart Labs. The research technology
division of the company has developed a set of big data tools to connect sales
data to individual customers-
Below are 3 different ways Wal-Mart drives value from their
1) Mining Sales Data
Data mining helps Wal-Mart find patterns in their sales data
that can be used to provide personalized product recommendations and
promotional offers. By using a matching algorithm they discover products
commonly purchased together or purchased in a particular sequence.
The important thing about Wal-Mart’s big data program is
that it is able to correlate sales trends with external events – like what’s
trending on Twitter, or who just won a big football game. They even look at how
local weather affects buying patterns.
For example – In 2013, Wal-Mart labs found that strawberry
pop-tarts sales increased 700% before a hurricane. Wal-Mart took action on
this event. It now places pop-tarts at the checkout line before any
2) Connecting In-store and Online Customer Behavior
Wal-Mart has customer database of roughly 145 million
Americans – or 60% of all US adults.
Wal-Mart retrieves data from common sources like clickable
actions on their website, contact information from their e-club, and
POS transactions, and also from one-of-kind programs developed by
One program allows them to track when real-world
shoppers are looking at a product online using in-store Wi-Fi. Another program
named- Social Genome, allows Wal-Mart to reach customers who have mentioned
something on social media in order to inform them about that exact product and
include a discount.
Collecting information from online and in-store
sources, combining and analyzing the aggregate data has resulted in a vast,
constantly changing, up-to-date knowledge base with hundreds of millions of
entities and relationships.
It helps Wal-Mart to properly understand the context
of what their customers are saying and doing, and gives them the subject they
need to send tailored offers and messages at scale.
3) Personalized Email Marketing
Wal-Mart’s extensive inventory of actionable data has
facilitated their marketing team with incredible power in driving new revenue
through best-in-class email marketing.
The system is far more sophisticated than their retail
competitors- with Amazon being the only notable exception.
Here are a few areas where Wal-Mart’s email program
a. Personalized Recommendations – According to a 2014 Industry Report, only 10% of
emails sent by the 20 largest American retailers includes a personalized product
recommendation. Moreover, 25% of the top retailers failed to send any product
Wal-Mart is one of the rare outliers. They
consistently send tailored product offers based on customer behavior online and
inside their stores.
b. Time of Send – Use of timing optimization has been another
important part of Wal-Mart’s email success. Since 60% of email users only click
through emails during a single hour each day, achieving big open and redemption
rates is highly dependent on when customers receive your message.
Wal-Mart tracks each campaign’s open rate and
re-aligns delivery times based on individual user patters. For example, if I
open an email from Wal-Mart at 3:00pm, they will make sure the next email I
receive will be sent in this timeframe.
c. Subject Line Personalization – As we know, a subject line can make or break
an email campaign. A good subject line should be eye-catching and be able to
instantly establish trust. Including a recipient’s name in the subject line is
the best way to achieve both of these goals.
CRM system and
Retail Link are the databases used at Wal-Mart. CRM helps with the tracking of
customers, while Retail Link is a decision support system for suppliers
and retailer. The brand of database software which is used is- NCR’s Teradata
Software. It is believed to carry approximately 583 terabytes.
A data warehouse is a
logical collection of information gathered from different operational databases
which is used to create business intelligence that supports decision making
tasks and business analysis activities. Wal-Mart is known for having the
biggest data warehouse used, which is larger than 4 Petabytes. For managing
daily store operations, Wal-Mart turned its data warehouse into an operational
system by refreshing the information that data warehouse holds every hour. The
massive data warehouse is not only for customer of CRM systems but it also
serves as the base for Wal-Mart’s Retail-Link support system. Teradata is
Wal-marts data warehouse vendor.
subset of a data warehouse is data mart, which only focused portion of the data
warehouse information is kept. The CEO may want to see all of the information
he can also he may look at each section and get individual reports. Originally
Wal-Mart used data marts. They started out with many small data marts, first
being IBM DB2 and the second- IBM VM/SQL. Eventually the Teradata
system was introduced that enabled Wal-Mart to manage all of the information
into one database so they built a big data mart. The POS table at Wal-Mart was
1.2 billion records. Within a six months of this, Wal-Mart decided to turn it
into a data warehouse with several tables over 500 million rows.
tools are the software tools that are used to query information in a data
ware-house. These data-mining tools support the concept of OLAP. OLAP is an
online application processing query. Wal-Mart uses a global leader in business
intelligence software, Hyperion. They use Hyperion Essbase OLAP technology to
build an advanced merchandise planning and reporting system. Hyperion’s Essbase
technology will help Wal-Mart create a scalable system that will deliver
budgeting, forecasting and planning tools to international operations.
STRATEGY FOR MAINTAINING LOYAL CUSTOMERS
Ø Valuing the Customer
Wal-Mart looks its customer as the
boss. This old strategy was developed by Sam Walton, founder of Wal-Mart. All
the Wal-Mart associates are expected to serve the customer like their employer
and make sure they meet or exceed the expectation of the customer. Such
customer experiences have contributed to high repeat purchases in Wal-Mart
Ø Customized Services
Wal-Mart employees have been trained
to provide “service to customers”. Any customer who visits Wal-Mart Stores is
welcomed by an associate who offers to guide the customer around the store. The
associate may also offer to help customers in describing the various product
specifications. As a result, the customer may end up buying more; does a repeat
purchase or both. All of Wal-Mart strategies are meant to meet or exceed the
customer expectations and thus earn their loyalty