US - Walmart Strategy
US - Walmart Strategy
If you don’t listen to your customers, someone else will. Sam Walton Art T. Weinstein,
Kristen Anti and
Walmart is the largest traditional retailer worldwide. The Covid-19 pandemic led to a major Esteban Ochoa are all
shift to online buying, which forced Walmart to rethink its marketing approach to retain based at the Department of
customers. A key part of the revised strategy was the promotion of a new online delivery Marketing, Nova
service known as Walmart Plus. Walmart was able to thrive in the global crisis by delivering Southeastern University,
superior customer value. This case study evaluates the launch of the new business venture Fort Lauderdale, Florida,
and the company’s overall customer value strategy. These insights are useful to retailers, USA.
service organizations and small businesses that need to quickly adapt to change in
turbulent markets.
Walmart Inc., formerly known as Wal-Mart Stores, Inc., was founded by Sam Walton in 1962.
The first store opened in Rogers, AR (USA). Today, there are more than 11,500 Walmart
stores operating in 27 countries. Sam Walton had one simple customer value-based goal:
help people save money so they could live better. Sixty years later, the chain remains true to
that mission by offering low prices and a huge selection of products. Walmart’s core values
are based on customer respect and service, which cements store loyalty and gives Walmart
a strong edge over its retail competitors.
Walmart is the main source for groceries, household items, clothing and more, for hundreds
of millions of consumers. Based on a 2020 survey of consumers who purchase from
discounted chains, 75% of respondents have shopped at Walmart and 66% of respondents
regularly buy food and products from Walmart. In 2021, Walmart averaged about 240
million customer visits per week (Statista, 2021).
How does Walmart manage to gain and retain such a loyal following? Although Walmart
does not have an official loyalty program, strategies such as cashback serve as loyalty
builders. Offers of 1%–3% cashback, depending on where the purchases were made, or
based on the type of purchase made motivate consumers to continue to patronize Walmart.
Cashback programs allow customers to save money and make those funds available for
other necessities, such as paying bills. Further, Walmart participates in the Fetch Rewards
program, which allows consumers to earn points for scanning receipts and later redeem
them for rewards.
Innovations like automated assistants, convenient handheld apps and virtual reality were
implemented across the chain to enhance the shopping experience. In addition to online
shopping, the company also initiated a new delivery and pickup service without the need to
leave one’s vehicle. Walmart Pickup Towers, 16-ft.-tall high-tech vending machines, were
installed in 1,211 stores to create a fun and fast way to shop. The Check Out With Me
service allows associates to check out customers from anywhere on the sales floor, and the
Dot Store App helps customers shopping at Walmart.com find out-of-stock items.
DOI 10.1108/JBS-07-2021-0133 VOL. 43 NO. 6 2022, pp. 381-390, © Emerald Publishing Limited, ISSN 0275-6668 j JOURNAL OF BUSINESS STRATEGY j PAGE 381
Over the past few years, corporations have added services that strategically place
customers at the center stage. During the Covid-19 pandemic, this need was escalated to
an even higher degree, but especially for businesses that provided essential consumer
goods and services. For Walmart and other grocery stores, this meant that they needed to
find a way to make shopping easier and safer. As a result, Walmart launched Walmart Plus
(also known as Walmartþ). Walmart Plus was established to deliver shopping items directly
to the consumer and to offer easy store pickup options. Walmart Plus currently offers free,
same-day delivery of over 160,000 items, including groceries from 2,700 Walmart locations.
At this time, there are no plans for expanding this program internationally. Walmart Plus also
offers the popular purchase online and pickup in-store feature, with handy self-serve pickup
towers in stores. Another convenience feature is its Walmart Pay app, which allows
customers to purchase items with their phones, making it easy to target smartphone-
addicted consumers.
Level 1. Macroenvironment
Society: Walmart’s new subscription-based program, Walmart Plus, is aimed at saving
consumers’ time and money. By signing up for the program, consumers have access to
special offers and free next-day and two-day shipping, with no minimum purchase
requirements. Walmart Plus has now reached more than 4,700 stores, including 2,700
stores that offer delivery as fast as the same day (Walmart Introduces Walmartþ, 2020).
Demographics: According to Business Insider, the average consumer shopping at Walmart
is a 46-year-old white woman with an annual household income of US$76,000 (Hanbury,
2020). With Walmart Plus launching in September 2020, it already accounts for about 14%
of Walmart.com shoppers (Monteros, 2021). Walmart’s typical customer values affordable
pricing. It is interesting to note that the average consumer’s income greatly exceeds the
median household income. As Walmart Plus continues to grow, the average consumer
income is also expected to increase. This is because of Walmart tapping into new middle-
and upper-middle-class market segments. The subscription-based program is geared
toward consumers who have busy schedules and need their groceries delivered quickly. By
providing a seamless option on mobile devices, Walmart Plus will continue to grow.
Economic: Walmart Plus is well positioned to offer consumers significant savings. They offer
the service at just US$12.95 monthly or US$98 yearly, which is comparable to Amazon
Prime. Walmart Plus has exclusive perks. It is estimated that this service can save
customers hundreds of dollars annually on groceries and gasoline.
Physical: Given the enormous number of Walmart and Walmart Plus shoppers, operations
need to be streamlined to meet consumer demand. It is imperative that deliveries are on
time and inventory is in stock at their selected stores to prevent customer defections.
Walmart Plus requires consumers to choose locations closest to them when they are
ordering off the app; this allows the local store to package their items and deliver them to
homes. When customers are paying an annual fee and getting additional perks, they are
more likely to stick with that store (Morgan, 2021). This means consumers are now not only
becoming more loyal to Walmart by using the new program but are becoming more loyal to
the individual stores.
Level 2. Microenvironment
Collaboration: Given its huge resources, Walmart can offer goods and services without the
need for many collaborations. Unlike Amazon, which acquired Whole Foods to be able to
provide fast grocery deliveries, Walmart works with local and global suppliers to meet
consumer demands and provide in-stock inventory throughout the year. While there are no
strategic partnerships for the core products, Walmart carefully selects suppliers by having
them meet specified criteria and then complete an application. Collaborators are in place to
ensure Walmart is upholding a healthy work environment. Some of the varied Walmart
collaborations include the Alliance for Bangladesh Worker Safety, the Coalition of
Immokalee Workers, the International Labor Organization and the Ethical Trading Initiative
(Walmart - Collaboration, 2021).
Competition: The head-to-head direct competitor of Walmart Plus is Amazon, as they both
have a similar business model of being a subscription-based, fast-delivering service.
Amazon calls its program Amazon Prime and with a discounted annual fee of US$119 (or
US$13 per month), consumers get same- and two-day delivery on their grocery items.
Amazon has a 42% market share in US e-commerce retail sales, followed by Walmart with
8%, and eBay, Apple and Home Depot all at less than 5%. Walmart has recently become
the market leader in online grocery transactions (30%), closely followed by Amazon (28%).
Target (11%) and other non-grocers (16%) and other grocers (15%) capture the remaining
40% of the online grocery business (Herrera and Calderon, 2021).
Walmart Plus offers a monthly or yearly fee, which is US$21 less than Amazon Prime. While
both offer discounted grocery items, with speedy deliveries, they do provide different
membership perks. Amazon Prime offers the advantage of streaming services, whereas
Walmart has no plans of entering the entertainment arena. One advantage that Walmart
Plus has over Amazon Prime is that it can provide consumers with gas discounts of US$.05
per gallon.
In addition to Amazon, Walmart Plus faces regional and local grocery competitors. For
example, in South Florida, the Walmart Plus main competitor is Publix, the overwhelming
statewide leader, as well as Aldi, BJ Wholesale Club, Costco, Fresh Market, Sedano’s,
Trader Joes, Whole Foods and others.
Suppliers: To meet the demands of its consumer base, Walmart must anticipate the amount
of inventory needed at every store. With over 2,800 suppliers worldwide, Walmart ensures
each supplier will carry out its responsibilities by filling out detailed applications that
address product specifications, insurance requirements, audits and certifications and other
relationship expectations. These measures ensure that suppliers are held to prescribed
Level 3. Organization
Stakeholders: Walmart’s stakeholders include investors, customers, employees and
suppliers. Without these four parties, Walmart would not be the largest retailer today.
Investors allow Walmart to take on new expenditures, such as the launch of Walmart Plus.
Their main objective is to maximize profits so earnings per share may increase. Secondarily,
it is concerned about corporate social responsibility. Walmart can satisfy investors by
attracting and retaining a large number of satisfied consumers. Walmart focuses on
providing the lowest price point to shoppers and emphasizes lifetime relationships rather
than individual transactions.
Customers, the main drivers of revenue, appreciate the massive selection and affordable
prices and seek a great shopping experience. Walmart provides this through Walmart Plus.
The service offers low price points and with the ease of doing grocery shopping on a mobile
device, and same-day delivery. For operations to run smoothly, Walmart is dependent on its
employees to carry out everyday tasks and provide the best consumer experiences. The
company highly values its employees by providing job security, career opportunities and
acceptable wages for drivers and in-store personnel. Suppliers are also important for
meeting the demands of consumers, and Walmart Plus depends on suppliers to provide
enough inventory at each store so that consumers can use their subscription benefits and
avoid cancelations.
Business culture: Walmart follows four main tenets to help build a healthy working
environment: service to customers, respect for the individual, striving for excellence and
acting with integrity (Walmart/Careers, 2021). Service to customers consists of being
attentive to consumers and aiming to provide good customer service. Respect for the
individual applies more to team building, and everyone must be treated with respect and
feel heard when voicing an issue. By striving for excellence, it sets goals for employees, so
they continue to advance in their jobs and take responsibility for their actions. Acting with
integrity asks all employees to do what is right and to be transparent with one another.
These four factors are the business culture’s foundation and the reason why Walmart
continues to be the leading retailer.
Organizational structure: Walmart follows a hierarchical organizational structure. This is
evidenced in the stores by managers and retail associates. Every employee reports to a
supervisor, who is then given a task to complete. This chain of command is in place every
“I love the way they provide so many times for pick up and that it is a
touchless pick-up. They let me pay online with EBT and if I have a
problem, they get it fixed so quickly. The pricing is good, and the
quality is good.”
Susan - Rothbury, MI
dependent, and unexpected with new products, that make life, much
more improved.”
Doris - San Diego, CA
* The above comments are a small sample of some verified five-star reviews
that were posted from June 2020 to February 2021. (Consumer Affairs,
2021).
option, however, to waive the minimum fee by selecting curbside pickup. This allows them
not to spend any additional time in the store and have the items ready by arrival time.
Consumers carefully evaluate the quality of the core products, the freshness of the produce,
the speed and reliability of the delivery service and the trust they place in their personal
shopper. In the case of deliveries and store pickups, customer satisfaction is directly linked
to how well the personal shopper fulfills orders. When considering product and service
quality, many of the customers noted that they did not trust their shoppers’ judgment in the
freshness of the products and produce picked and they did not trust shoppers to research
each of the items offered on the shelf and double-check product expiration dates. Many
Walmart Plus subscribers expressed concern over substitutions of sold-out products.
Based on delivery and grocery pickup service reviews, almost all Walmart Plus competitors,
including Amazon Prime, face the same issues regarding the quality of the product picked
Strategic implications
Improve communications
The message behind Walmart Plus is not being conveyed effectively by the Walmart
marketing team. Extensive market research throughout the USA is imperative for the
success and mass implementation of the Walmart Plus program. The local survey
conducted showcased that in the South Florida region (n = 70), only 27% surveyed were
aware of the existence of Walmart Plus. For a retail giant like Walmart, just over a quarter of
Household size One 8% Two 34% Three 31% Four or more 27%
Children < 18 Yes 69 No 31
Ethnicity Hispanic: 64 Caucasian: 25 African-American: 10 Asian-American: 1
Household income < US$25,000: 8 US$25,000–US$49,999: 15 US$50,000–US$99,999: US$100,000þ: 41
36
Racially mixed household Yes 15 No 85
Geographic South Florida 95 Non-Florida residents 5
the sample is a poor awareness level. To increase the awareness of the Walmart Plus
membership, the company needs to:
1. revise the current communication strategy and clearly identify the strengths and
weaknesses of the approach;
2. conduct market research within Walmart stores throughout the country on:
䊏 Walmart Plus awareness for Walmart shoppers;
䊏 Walmart Plus usage (those who already have the subscriptions); and
䊏 Walmart Plus likely tryers.
3. create several ideal consumer profiles (personas) to test in future research initiatives
based on current users. Split-half test advertisements in selected major metropolitan
areas, small metropolitan areas and semi-rural areas can be useful in this endeavor;
and
4. increase social media presence through local ambassadors and category influencers.
Use geo-segmentation
With a population of almost 330 million people, the USA has 60% Caucasian, 18.5%
Hispanic and 13.4% African-American (United States Census Bureau, 2020). Research
published by Hanbury (2020) reveals that 18% of Walmart’s client base is Hispanic, and
about 15% is African-American. Our study found that only 14 of the 74 households (19%)
surveyed were willing to try Walmart Plus. Further, 79% of potential buyers (n = 11) were
Hispanics; the remainder (n = 3, 21%) were African-American.
Walmart can emphasize geo-segmenting of minorities in large urban areas to try the new
service/product. Minority majority markets are located in counties such as Cook (Chicago),
Dallas, Los Angeles, Miami-Dade, Philadelphia and San Diego. In the USA, Walmart has a
potential minority client base of 105 million people, out of which they currently serve
approximately 35 million people (33%). Assuming the survey ratios remain constant, there is
Concluding remarks
Overall, the Walmart Plus concept is innovative, interesting and beneficial to shoppers. As Keywords:
of now, it has not met market and corporate expectations, so it needs to be enhanced and Marketing strategy,
upgraded. Walmart must do a better job of relaying information to their existing shoppers E-commerce,
Customer value,
and potential consumers to maximize the effectiveness of this new business. Great ideas
Online shopping,
without sufficient market awareness and adaptation to change are doomed to fail. Given Walmart,
Walmart’s massive resources and marketing prowess, we believe that the company has an Retail management,
excellent opportunity to succeed with Walmart Plus in the USA and abroad. Grocery industry
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Corresponding author
Art T. Weinstein can be contacted at: art@nova.edu
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