Reasons for Walmart’s retail success

The secret of success of the retail kingdom Wal-Mart

In August 1996, Wal-Mart, the world's number one retail brand, entered the Chinese market and set off a shopping whirlwind in Shenzhen, changing the traditional department store retail industry. stunned. What is Wal-Mart’s marketing secret? How did Wal-Mart build a world-dominating retail empire?

Wal-Mart founder Sam Walton put it bluntly -

We work side by side, That's the secret. We lower living expenses for every customer. We want to give the world a chance to see what it means to improve the lives of all people through frugality.

USD 93.6 billion: world record sales

No industry is more closely related to consumers’ daily lives than the retail industry. An American scholar once vividly defined the mission of the retail industry as "improving living standards and spreading happiness." And Wal-Mart (WAL-MART) is the brightest pearl in this industry.

In 1991, Wal-Mart's annual sales exceeded US$40 billion, becoming one of the world's largest retail companies. According to the national service industry classification rankings published by the US "Happiness" magazine in May 1994, Wal-Mart's sales in 1993 reached US$67.34 billion, an increase of more than 11.8 billion from the previous year, surpassing the West, which ranked first in 1992. Sears ranks first in the U.S. retail industry. In 1995, Wal-Mart's sales continued to grow and set a world record in the retail industry, achieving annual sales of US$93.6 billion, and ranking fourth on the Fortune Magazine's list of the largest American companies in the United States. In fact, Wal-Mart's annual sales are equivalent to the sum of all department stores in the United States, and it still maintains a strong momentum of development. In comparison, the annual sales of some large department stores in Beijing, Shanghai and Guangzhou in my country are only several billion yuan, which is astonishingly different from Wal-Mart.

To date, Wal-Mart has 2,133 Wal-Mart stores, 469 Sam's Club stores and 248 Wal-Mart shopping plazas across the United States, Mexico, Canada, Puerto Rico, Brazil, Argentina, South Africa, China, Indonesia and other places. Its rapid development in just a few decades has to be said to be a miracle in the retail industry.

How can Wal-Mart rapidly develop from a small retail store to a large retail group and become the world's number one retail brand?

First of all, Wal-Mart proposed "helping customers Save every penny" purpose, and fulfill the promise of the cheapest price.

Secondly, it is not enough to just have cheap products. Wal-Mart also provides customers with the new enjoyment of super-first-class services. The company has always adhered to the principle of "outstanding service and distinctive employees". When entering Wal-Mart, customers can feel the attentive service that makes them feel at home.

Once again, Wal-Mart promotes the new concept of "one-stop" shopping. Customers can purchase all the goods they need in the shortest time and as quickly as possible. It is this fast and convenient shopping method that attracts modern consumers.

In addition, although Wal-Mart has repeatedly reduced advertising expenditures in order to reduce costs, it does not hesitate to donate money to various public welfare undertakings and do good to others. If you put in the effort, you will reap the rewards. Walmart's large long-term investment in charity activities and the unique creativity of the activities themselves have greatly increased the brand's popularity and successfully shaped the brand's excellent image in the minds of consumers.

Finally, and one of the most critical reasons why Wal-Mart can surpass Sears is that Wal-Mart adopts different retail business forms to target different target consumers, occupying high-end and low-end markets respectively. For example: Wal-Mart's Affordable Shopping Plaza, which targets middle-class and lower-middle-class consumers; Sam's Club, which provides various discounts and services only to members; and Wal-Mart's comprehensive department stores, which are popular among upper-class consumers.

The above five reasons have enabled Wal-Mart to stand out from the retail industry and establish a unique contemporary retail kingdom. The following is a detailed explanation of its success from these five aspects. Domestic retail companies may be inspired by it to speed up the process of developing international retail brands.

1. The promise of the cheapest prices

All large supermarket chains adopt low-price management strategies. What makes Wal-Mart unique is that it does everything possible to purchase products from purchase channels, We save money in distribution methods, marketing expenses, administrative expenses and other aspects, put forward the slogan of "affordable prices every day, consistent", and strive to realize the promise of cheaper prices than other merchants.

Strict purchasing attitude, complete delivery system and advanced inventory management are the key factors that enable Wal-Mart to achieve the lowest cost and cheapest price.

Its founder Walton once said, "We value the value of every penny, because one of the purposes of our service is to help every customer who purchases in the store save money. Whenever we Saving a dollar will win the trust of customers. "For this reason, he requires every purchasing staff to be firm when purchasing goods. He warned: "You are not bargaining for the store, but for the customer. We should get the best price for the customer."

Wal-Mart usually purchases directly from the factory at the lowest purchase price commodity. Once the transaction is completed, the headquarters will notify the manufacturer to send the goods directly to Wal-Mart's delivery center. Walmart has 16 fulfillment centers in the United States, all located less than a day's journey from its outlets. It has more than 6,000 trucks and delivers an average of 190,000 boxes every day. In 1987, the company established the largest private satellite communication system in the United States to save communication costs between the headquarters and branches, speed up decision-making and information feedback, and improve the operational efficiency of the entire company. High-speed computers at the headquarters are connected to 16 shipping centers and more than 1,000 stores. Every item sold through a store's checkout laser scanner is automatically recorded on a computer. When the inventory of a certain product is reduced to a certain amount, the computer will send out a signal to remind the store to request restocking from the headquarters in a timely manner. The headquarters arranges the supply of goods and sends them to a shipping center closest to the store, and then the computer in the shipping center arranges the delivery time and route. The required goods appear on warehouse shelves within 36 hours of placing an order in the store. This highly efficient inventory management enables the company to quickly grasp sales conditions and market demand trends and replenish inventory shortages in a timely manner. This can reduce inventory risks, reduce the amount of capital backlog, and accelerate the speed of capital operation.

Wal-Mart also adopts warehousing operations, which fully reflects the economies of scale in terms of commodity sales costs. For example: Sam's Club store decoration is simple and all shelf space is used as much as possible to store and display products. The price is not marked on each item, but uniformly marked on the shelf. As long as the bar code of the item is scanned, the cash register will accurately charge the price. Products are mostly sold in large packages to reduce the cost of individual packaging. With the continuous improvement of my country's productivity level and the enhancement of consumer purchasing power, many cities have the conditions to implement this model. Merchants gradually realized the advantages of the warehouse business model and began to make some attempts. Affordable warehouse stores similar to Guangkelong opened one after another. The most critical issue at present is to learn from the experience of successful foreign companies (such as Wal-Mart) to achieve the lowest cost and achieve economies of scale more comprehensively and thoroughly.

In addition to the above points, in order to reduce operating expenses, Wal-Mart has chosen a strategy of compressing advertising expenses. The average large department store in the United States places 50 to 100 advertisements on television or newspapers every year, while Wal-Mart only advertises 12 times. Facing the American market flooded with advertising, Wal-Mart has boldly adopted this advertising strategy, and it has been able to remain invincible for a long time. We can get some inspiration from this: For merchants, blindly increasing advertising investment does not guarantee turnover. grow proportionally. Sometimes when advertising expenses are appropriately reduced and operating costs are reduced accordingly, performance will be significantly improved.

2. New enjoyment of super-first-class services

In the retail industry, a comfortable shopping environment and high-quality and thoughtful services are inevitably associated with higher prices; in chain stores with low commodity prices, In supermarkets, customers often only get discounts on shopping prices, but cannot enjoy high-quality services. K-Mart is a well-known large-scale discount chain store in the United States. Its stores are vast, but in order to save labor costs, it has very few store employees. Although the store displays a wide variety of cheap products, it is not easy for customers to find one or two store clerks to ask relevant questions. Here, although customers satisfy their desire to buy cheap goods, they do not feel that the clerk pays a little attention to them, so they feel regretful about the imperfection in the heart of the customer.

For retail companies to establish a brand image in the minds of customers, it is not enough to rely solely on high-quality and low-price products. Customers also hope to enjoy meticulous and warm services while shopping. Wal-Mart takes this into consideration and attracts a large number of customers with its first-class services from the customer's perspective. When you walk into any Wal-Mart store, a store clerk will immediately appear in front of you and greet you with a smile. There is a slogan in the store, "We strive to do this, and every product is guaranteed to satisfy you!" If customers are not satisfied with any product purchased here, they can return it to the store within one month and receive full payment. Walton once said, "We all work for customers. You may feel that you are working for your boss, but in fact he is just like you. There is a big boss outside our organization, and that is the customer." Wal-Mart Treat first-class service as your supreme responsibility.

Slogans like this hang in many Wal-Mart stores:

1. The customer is always right;

2. If Gu Rong makes any mistakes, please refer to Article 1.

This is a vivid portrayal of Wal-Mart’s customer first principle. Some employees said with emotion, "It was Wal-Mart that made us realize for the first time that the customer is always right.

The secret of Wal-Mart's business is to constantly understand the needs of customers, put themselves in their shoes, and serve them to the greatest extent possible. Customer convenience. Once, a customer went to Wal-Mart looking for a special paint, but the store was out of stock, so the manager of the paint department personally took the customer to the paint store opposite to buy it. All the bosses are grateful. Walton often says to his employees, "Let us treat customers with kindness and enthusiasm, just like entertaining guests at home, so that they feel that we care about their needs all the time." "

3. The new concept of "one-stop" shopping

Whether customers can purchase all the goods they need in the store at one time, whether they can get timely new product sales information, whether they can Enjoy additional services such as door-to-door delivery and free parking, and whether you can shop in the store at any time you have free time... These questions are also important indicators of evaluating the quality of a store.

In Wal-Mart, consumers can. Experience the new concept of "one-stop" shopping. In terms of product structure, it strives to be varied and distinctive to meet customers' various preferences. It operates a wide range of items, including food, toys, new clothing, Cosmetics, household appliances, daily necessities, meats, fruits and vegetables, etc.

In addition, Wal-Mart has also set up a number of special service types for the convenience of customers:

●Free parking. For example, the Sam's Store in Shenzhen has a business area of ??more than 12,000 square meters and has nearly 400 free parking spaces, while another Wal-Mart shopping mall with a business area of ??more than 17,800 square meters also has about 150 parking spaces.

●Wal-Mart has moved its pastry shop into the mall, and also has a "Sam's Lounge", where all the delicious food and fresh pastries provide customers with a leisurely experience after shopping.

●In-store employees. Professionals provide customers with free consultation on computers, cameras, video recorders and related supplies, which helps reduce the risks of blind purchases.

●The store has a Xerox Document Processing Business Center, which can be used for shopping. Provide customers with a variety of services including color document production, copying, enlarging and reducing engineering drawings, and high-speed printing.

●Walmart can provide delivery services for purchases of 2,000 yuan or more at one time. 49 yuan per time within the specified range (because the product price does not include delivery costs)

●In addition, Shenzhen Sam Store handles all mobile computer sales, and the prices of all models sold by the mobile bureau are the same. It is 100 yuan cheaper than other agency outlets; it also sells Runxun's communication products and collects phone fees for various models. All Chinese and digital machines are 50 yuan cheaper than other Runxun outlets on the market.

When it comes to choosing store locations, Wal-Mart also takes convenience of shopping as its primary consideration. In the United States, its tentacles extend to remote towns that Sears and Kmart disdain, from Minnesota to Mississippi. Wal-Mart is everywhere from Southern California to Oklahoma. As long as there is a shortage of low-cost stores in towns, Wal-Mart will open there.

4. Donate to charity to build an image

In order to provide customers with To provide more benefits and reduce advertising costs as much as possible, it puts a lot of thought into promotional creativity and strives to obtain the best results with the least investment.

All products promoted by Wal-Mart are always sold out. Among promotional methods, Wal-Mart pays special attention to the role of event marketing (EventMarketin8). For example, a "Precision Shopping Float Training Team" was established at a branch in Fairbury, Nebraska, and organized to participate in local float parades. All the team members were wearing Wal-Mart uniforms and changing formations while pushing the float, which was particularly eye-catching in the parade. In order to add some spice to the boring life in the community and create a happy atmosphere, Wal-Mart will often carry out a series of outdoor auctions, bands and circus performances to attract customers to come shopping. Every year on the second Saturday of October, Walmart holds a "mooncake eating" contest in the parking lot of its Oneanta store. This event attracted many customers from other states to participate and watch. News media coverage increased the competition's and Wal-Mart's visibility. In addition, when Wal-Mart's stock was listed, Wall Street securities analysts and shareholders were invited to go boating in the stream and camp on the lakeside.

Although Walmart has repeatedly cut back on its advertising spending, it has continued to donate to non-profit organizations and causes such as schools, libraries, economic development groups, hospitals, medical research programs, and environmental programs. At that time, he did not hesitate to spend money and was very generous.

▲Since 1983, Walmart has donated US$52 million to United Way charities in various states in the United States.

▲The branch in Xiangshan City, Georgia held a pig kissing contest to raise funds for charity.

▲Since 1988, Wal-Mart has raised US$57 million to assist children's hospitals in setting up the "Children's Miracle" TV program, making it the largest sponsor.

▲Walton also actively supports public and private schools and establishes special scholarships to help Latin American students go to Arkansas for college. He will also donate a certain percentage of the sales of his own brand "Sam's American Selection" to scholarships for students studying mathematics, science and computers.

Domestic retail companies are rarely willing to invest in public welfare undertakings that have no obvious short-term direct benefits. What they care about are often seasonal promotions and publicity. In fact, donating to public welfare undertakings (such as Project Hope, etc.) is a long-term investment. In the long run, it plays an important role in improving brand awareness and corporate image that cannot be ignored.

5. Comprehensive coverage of market segments

Sears is the ancestor of the global bulk mail order and retail industry, founded in 1886. Before 1992, it maintained its position as the top retail company. Its popularity in the United States is astonishing—8 out of 10 people in the United States shop at Sears at least once a year. The product route taken by Sears has always targeted the middle and lower classes as its consumer appeal. One of its main selling points, like Wal-Mart's, is its low prices. But after entering the 1990s, Sears' retail industry was in crisis. By 1992, it had been overtaken by Wal-Mart, which had only a few decades of history. In order to survive and develop the company, Sears had to change its business strategy and focus on Move to the insurance industry, real estate industry, finance industry and credit card industry to conduct diversified operations. So why is Wal-Mart able to defeat Sears, which has been the dominant player for many years, on the battlefield of the retail industry?

In terms of brand management strategy, Wal-Mart has chosen a variety of retail formats to target different levels of target consumers. It is precisely because of Wal-Mart's all-round attack to seize the high-end and low-end markets that Wal-Mart replaced Sears, which was once popular throughout the United States, and became the number one brand in the retail industry.

After World War II, the structural level of consumers began to change. The original lower-middle class has gradually divided into two classes: "upper-middle" and "lower". In response to this change, Wal-Mart has decisively adopted brand strategies in different business forms. Among them, Sam's Club, founded in 1983, and Wal-Mart Shopping Mall, founded in 1988, are aimed at "lower" consumers, achieving the ideal situation of reducing spending more thoroughly, and winning over most of the customers who originally belonged to Sears. Another business model founded in 1987, Wal-Mart is a comprehensive department store with stylish decoration, large scale, and excellent service. The products sold are diverse and unique. In comparison, the products sold by Sears are mostly simple styles and lack of uniqueness. place, so of course the "upper-middle" class customers are no longer attached to Sears.

Since Wal-Mart challenged Sears and launched an attack from both aspects at the same time, Sears was unable to compete with it and finally gave up its position as the leader and moved to industries other than retail.

Membership is an emerging retail form. Sam's Club is a major feature of Wal-Mart's operations and a magic weapon for it to capture the market and defeat Sears.

The implementation of the membership system has brought many benefits to Wal-Mart:

1. A long-term and stable consumer market has been established. Through the membership system, Wal-Mart turns a large number of unstable consumers into stable customers in the form of organizational constraints, thus greatly increasing Wal-Mart's turnover and market share.

2． Cultivated a large number of brand loyalists. Through the membership system, consumers who become members will shop at Sam's Club for a long time, which can easily form purchasing habits, thereby cultivating consumers' loyalty to Wal-Mart, a retailer brand.

3． The income from membership fees is considerable. Although the membership fee is a small amount for an individual, it is a considerable amount of income for Sam's stores with many members, which is often more than the net profit from sales.

On the other hand, the implementation of a membership system is a form of promotion similar to price reductions, and consumers can also obtain many benefits from it, such as:

A Enjoy ultra-low price discounts or special services. For consumers, joining Sam's Store can enjoy lower prices. The one-time membership fee is far less than the ultra-low discounts they will enjoy every time they shop in the future, so they are often willing to join member stores.

B Convenient for shopping. Once consumers become members, they can enjoy a variety of special services; for example, they can regularly receive information on the styles, performance, prices, etc. of new arrivals, and enjoy door-to-door delivery services.

C You can use membership cards to give gifts to relatives and friends. There are many forms of membership cards, and their supplementary cards can be given to others in the form of gifts.

Sam’s Club membership is divided into two categories: business membership and personal membership. Commercial membership applicants must present a copy of a valid business license and can nominate 8 affiliated members; individual membership applicants only need to present their resident ID card or passport and can nominate 2 affiliated members. The two types of membership fees are unified. The annual fee for the main card is 150 yuan, and the annual fee for each supplementary card is 50 yuan (taking Shenzhen Sam's Store as an example). Simple membership procedures ensure that every consumer has the possibility to become a member and enjoy discounts.

Wal-Mart (WAL-MART) profile:

In 1950, Sam Walton opened the first discount store.

In 1962, Walton opened the first Wal-Mart discount store in Rogers, Arkansas, under the name "WaI-Mart".

In 1972, Wal-Mart listed its shares in New York, and its value increased 100 times in the next 17 years (to 1989).

In 1979, Wal-Mart's total sales exceeded US$1 billion for the first time.

In 1983, the Sam's Club store (SAM'S CLUB) was successfully opened, which allowed affordable shopping with membership.

In 1985, the famous American financial magazine "Forbes" listed Walton as the richest man in the United States.

In 1987, the first comprehensive department store (HyperMart) was opened in Gallen, Texas, and one of the largest private satellite communication systems in the United States was established to connect its branches and headquarters.

In March 1988, the first Wal-Mart Super Center was established in Washington, Missouri.

In 1991, in Mexico, we worked with the famous local CifaS. A cooperated to establish 45 Sam's Club stores and Wal-Mart shopping malls, and opened 122 chain stores in Canada.

On March 17, 1992, Walton was awarded the "Presidential Medal of Freedom."

In 1993, it had 330 retail stores in Britain, France, Germany and other European countries, and its overseas turnover accounted for 27.6% of the total turnover.

In 1994, the International Business Department was formally established to be responsible for overseas affairs.

On August 12, 1996, China’s first Wal-Mart affordable shopping mall and Sam’s Club store opened in Shenzhen.

Sam Walton’s ten rules for successful business operations:

1. Work wholeheartedly and work harder than others.

2． Share profits with colleagues.

3． Motivate your colleagues.

4. Communicate with colleagues on everything.

5． Appreciate colleagues’ contributions to the company.

6． Celebrate success and don't be discouraged by failure.

7. Listen to what everyone in the company has to say.

8. Exceed your customers' expectations and they'll come back again and again.

9. Control costs lower than competitors.