What’s The Secret Behind Walmart’s Retail Glory?

BRAND STORY Walmart is intelligently incorporating a more technologically driven CX

In 1962, Sam Walton had one goal: to “help people save money so they could live better.” Six decades later, Walmart remains true to that mission.

Long considered an innovator in-store CX, its recent technological updates intended to improve areas of friction in customers’ shopping journeys include Pickup Towers, systems that quickly pick and pack online groceries, and the DotCom store, among many others.

“Building a seamless omnichannel experience for customers and prioritizing convenience for them is critical,” Walmart President and CEO Doug McMillon told analysts in February. “Our stores have become hybrid; they’re both stores and fulfillment centers. Last year, we increased the number of orders coming from our stores by 170% versus the previous year, which is on top of more than 500% from the previous year. Having inventory so close to so many customers is a competitive advantage. In some cases, we’re getting items to customers in hours rather than days.”

The aim is to appeal to customers and create personalized in-store shopping experiences that more than half of consumers believe have a noticeable impact on purchasing.

Data is the fuel driving Walmart’s reinvention in CX. Every hour, Walmart collects 2.5 petabytes of unstructured data to gain deeper insights into customer behaviors and the products they purchased. Backed by real-time analysis and insights, the retailer optimizes inventory according to customer needs and tastes.

The marketing team built a mobile growth stack to support campaigns, emphasizing app attribution, data sharing, and visualization to get a complete view of the customer journey, crucial to product and marketing teams.

Walmart uses a visualization platform to understand its mobile customers. The computing power, metrics, and flexibility have made customer data analysis more straightforward, pulling a deeper behavioral understanding of its customers and what drives value for them in-app.

The Walmart mobile app aims to support customers who shop across channels. The tools and features are designed to deliver as much value to the customer who shops in-store as those who research items before heading to a store.

Walmart app builds on a set of in-store tools for scanning products, price checking, grocery pick up, checking product availability, and more. Those key features and the convenience they deliver invite app stickiness, adding to the understanding and meeting customer needs. For brick-and-mortar retail marketers, it’s critical to understand customer context to meet their needs appropriately.

Since shoppers expect the seamless integration of technology with in-store shopping, the retailer places the CX at the heart of its business. By intelligently leveraging digital platforms and reshaping the in-store experience, Walmart incorporates a more technologically driven CX that gives it a leg up against the competition.

Automation driving CX

As it becomes more complex to deliver a top-notch CX, automation is becoming more compelling to improve CX. Not to be left behind, Walmart continuously expands and updates the automation of recurring services to help customers save time: from a touch-screen tire-search kiosk to creating smart stores, with shelf scanners, robotics, and computer vision cameras to increase efficiency and contactless payment.

Its Ask Sam voice-assistant app helps associates better serve customers and do their jobs more effectively. Having access to the information at their fingertips allows them more time on the floor with customers.

Recently, to meet shoppers’ increasing demand, Walmart started using high-tech systems that quickly pick and pack online groceries. Last year, dozens of Walmart’s stores became fulfillment centers, with a portion of those stores turned into small, automated warehouses.

Walmart tested Alphabot, a system that allows the retailer to pick orders within minutes and have them ready for a customer within an hour of placing the order.

The retailer also kicked off automation at 25 regional distribution centers to drive speed and efficiency in the US last year. The scalable system encompasses a fleet of fully autonomous robots and proprietary software to improve throughput while boosting warehouse capacity. Some stores have a pick-up area where customers can drive up, scan a code, and grab their orders.

Using IoT to ensure food quality

Predicting and managing the supply chain is crucial to offer the best customer experience. During the pandemic, Walmart integrated internet of things (IoT) capabilities to improve food quality and lower energy consumption. This proprietary software includes a cloud-based dashboard application to manage volume and detect anomalous events, such as refrigeration failures, so that they can be fixed quickly.

Walmart manages more than 7 million unique IoT data points across its US stores, which means each day connected devices send almost 1.5 billion messages regarding temperature, operating functions, and energy use. Walmart uses IoT to help it maintain food in coolers and freezers at the proper temperature. Walmart also uses IoT sensors on stores’ HVAC and energy systems to remotely monitor and respond to community energy consumption needs.

Customer loyalty builder

Walmart’s customer loyalty strategies include cashback rewards card options that allow customers to save money and make money by shopping the chain. Walmart also participates with Fetch Rewards, an app with over 3 million downloads that enables users to earn points and redeem them for rewards, including Walmart gift cards.

The retailer, which has historically relied on its motto of Everyday Low Prices to offer customers savings, has made unlimited grocery deliveries a central perk of its membership program, Walmart+, to drive a greater volume of orders as more and more customers rely on pick-up and delivery as an essential part of their lives.

Walmart+ creates digital offers on Walmart.com and the Walmart app, where customers can access hundreds of cash rebates. Walmart joined the Ibotta Performance Network (IPN), which delivers cashback to loyal customers. The IPN enables cash rebates to be delivered coordinated across large third-party sites, including social media networks, recipe sites, and other platforms.

Another customer convenience feature is the Walmart Pay app. It allows customers to buy items with their phones, and funds can be loaded to the app from the store credit, Walmart gift cards, or debit cards.

Customers at the centerstage

Walmart provides the best of online and offline worlds. Customers can get their weekly groceries from Walmart by shopping in person, picking up an online order at the store, or having their items shipped to home. The Walmart Pickup Towers ensure that customers never have to wait in line if they have something delivered in-store. Or the Click and Collect online grocery pick-up in stores or as a drive-in service. And the Express Delivery is in two hours.

The Scan & Go app feature streamlines the store shopping experience and reduces in-person contact. The app allows shoppers to scan items and add them to their cart with their phones. The app keeps a running list of things scanned and a cart subtotal. Customers can adjust the quantity or delete an item. Once they are done shopping, they can pay with the phone’s digital wallet and walk out.

What’s the best part? If an item is out of stock, a shopper can scan its UPC and add it to their online cart to be ordered later.

Taking a direct shot at Amazon, where third-party sellers can reach millions of customers worldwide, Walmart partnered with Shopify in 2020. The deal opened Walmart’s Marketplace to Shopify’s small business sellers and expanded the reach of the participating brands by placing them in front of Walmart Marketplace’s millions of monthly visitors. In the first half of 2021, Walmart’s marketplace surpassed 100,000 sellers.

To appeal to a new user demographic, Walmart partnered with Affirm on Buy Now, Pay Later (BNPL) service to enable customers to take home purchases right away and then pay them off in installments.

Focus on improvement and innovation

As every retailer knows, start with happy, well-trained employees to strengthen customer service. Retail jobs are different than they were three years ago. Now, knowledge of digital skills, technology, and product expertise is essential.

A few years ago, Walmart introduced a $100 million Retail Opportunity Initiative to offer employees education opportunities, improve training programs and assist with career advancement within the organization. Through the Walmart Academies, associates even get virtual training. The company also rolled out an education benefit for full-time, part-time, and salaried US Walmart associates.

Meanwhile, Check Out With Me, a service designed to save customers time, allows associates to scan a customer’s items with a mobile device, swipes their credit card, and provides them with a receipt – printed or electronic options available. Customers pay and go. It’s as simple as that. The Dotcom Store app lets associates help in-store customers shop on Walmart.com for items out of stock at the store.

Conclusion

Add all the things mentioned above, and it’s not surprising that Walmart is growing much faster online than Amazon in eCommerce, more than five times faster, according to a new report by Jungle Scout. If those rates hold steady, Walmart’s eCommerce will overtake Amazon’s retail sales in four years.

For a company with firm roots in the brick-and-mortar world, that’s brilliant growth. According to Jungle Scout’s research, the biggest reason consumers shop on Walmart is price, followed by familiarity with products and proximity to Walmart stores for easy pick-up and returns, with 31% favoring Walmart because of their stores. Stores are still a strength of Walmart in eCommerce consumers’ minds.

To paraphrase CEO Doug McMillon, these critical decisions have  moved Walmart from a “preferred destination” to the consumer’s “primary destination.”

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