Reasons for Wal-Mart's Retail Success

the secret of the success of Wal- Mart, the retail kingdom

In August p>1996, Wal-Mart, the world's number one retail brand, entered the China market and set off a shopping whirlwind in Shenzhen, which stunned the traditional department store retail industry. What is Wal-Mart's marketing secret? Why does Wal-Mart establish a retail kingdom that dominates the world?

sam walton, the founder of Wal-Mart, said,

We work side by side, and that's the secret. We reduce the living expenses for every customer. We want to give the world a chance to see what it's like to improve everyone's life by saving.

US$ 93.6 billion: sales reached a world record

No industry has a closer relationship with consumers' daily life than retail. An American scholar once defined the mission of the retail industry as "improving living standards and spreading happiness". WAL-MART is the brightest pearl in this industry.

In p>1991, Wal-Mart's annual sales exceeded $4 billion, making it one of the largest retail enterprises in the world. According to the classified ranking of service industries in the United States published by Happiness magazine in May 1994, Wal-Mart's sales in 1993 reached US$ 67.34 billion, an increase of more than 11.8 billion over the previous year, surpassing Sears, which ranked first in 1992, and ranked first in the retail industry in the United States. In 1995, Wal-Mart's sales continued to grow and set a world record for the retail industry, achieving annual sales of 93.6 billion US dollars, ranking fourth in Fortune magazine's 95 list of the largest enterprises 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 development momentum. In contrast, the annual sales of some large department stores in Beijing, Shanghai and Guangzhou in China are only several billion RMB, which is quite different from Wal-Mart.

Up to now, Wal-Mart has 2,133 Wal-Mart stores, 469 Sam member stores and 248 Wal-Mart shopping plazas, all over the United States, Mexico, Canada, Puerto Rico, Brazil, Argentina, South Africa, China and Indonesia. It has developed so rapidly in just a few decades that it has to be said to be a miracle of the retail industry.

How can Wal-Mart rapidly develop from a small retail store to a large retail group and become the first retail brand in the world?

First of all, Wal-Mart put forward the aim of "helping customers save every penny" and realized the promise of the cheapest price.

Secondly, it is not enough to have cheap goods. Wal-Mart also provides customers with the new enjoyment of superb service. The company has always adhered to the principle of "service is superior and employees are different". When you walk into Wal-Mart, customers can feel at home in person.

Thirdly, Wal-Mart promotes the new concept of "one-stop" shopping. Customers can buy all the goods they need at the fastest speed in the shortest time. It is this fast and convenient shopping method that attracts modern consumers.

In addition, although Wal-Mart has repeatedly reduced its spending on advertising in order to reduce costs, it has made generous donations to various public welfare undertakings. No pains, no gains. Wal-Mart's long-term investment in public welfare activities and the unique creativity of the activities have greatly improved the popularity of Pinjing brand and successfully shaped the brand's outstanding image in the eyes of consumers.

finally, the key reason why Wal-Mart can surpass Sears is that Wal-Mart adopts different retail operation forms for different target consumers, occupying high-end and low-end markets respectively. For example: Wal-Mart Fair Shopping Plaza for middle and lower class consumers; Sam member stores that only provide various benefits and services for members; And Wal-Mart comprehensive department stores, which are popular with upper-class consumers.

The above five reasons enable Wal-Mart to stand out from the retail industry and establish a unique contemporary retail kingdom. The following is a detailed description of its success from these five aspects, from which domestic retail enterprises may be inspired to accelerate the process of developing international retail brands.

First, the promise of the cheapest price

All large supermarket chains adopt the strategy of low-cost operation. What makes Wal-Mart different is that it tries every means to save money from various aspects such as purchase channels, distribution methods, marketing expenses and administrative expenses, and puts forward the slogan of "parity every day, consistency", and strives to realize the promise of cheaper prices than other firms.

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

Walton, its founder, once said, "We attach importance to the value of every penny, because one of the purposes of our service is to help every customer save money when shopping in the store. Every time we save a dollar, we win the trust of our customers. " To this end, he asked every purchaser to be firm when purchasing goods. He warned: "You are not bargaining for the store, but for the customers. We should get the best price for the customers."

Wal-Mart generally buys goods directly from the factory at the lowest purchase price. Once the transaction is concluded, the headquarters will inform the manufacturer to send the goods directly to the Wal-Mart delivery center. Wal-Mart has 16 distribution centers in the United States, all of which are located less than one day away from the outlets. Its more than 6, trucks deliver an average of 19, cases a day. In 1987, the company established the largest private satellite communication system in the United States, in order to save the communication cost between headquarters and branches, speed up the decision-making communication and information feedback, and improve the operation efficiency of the whole company. The high-speed computer at the headquarters is connected with 16 delivery centers and more than 1 stores. Every item sold through the laser scanner at the store checkout counter will be automatically recorded in the computer. When the stock of a certain commodity is reduced to a certain amount, the computer will send out a signal to remind the store to ask the headquarters for stock in time. The headquarters arranges the supply and sends it to a delivery center nearest to the store, and then the computer in the delivery center arranges the delivery time and route. The required goods will appear on the shelves of the warehouse within 36 hours after the store issues the order. This efficient inventory management enables the company to quickly grasp the sales situation and market demand trends and replenish the inventory shortage in time. This can reduce the risk of inventory, reduce the amount of capital backlog and speed up the operation of funds.

Wal-Mart also adopts warehouse operation, which fully reflects the economies of scale in the cost of commodity sales. For example, the interior decoration of Sam member stores is simple, and all shelf space is used to store and display goods as much as possible. The price is not marked on every commodity, but on the shelf. As long as the barcode of the commodity is scanned, the cash register will accurately collect the price. Commodities are mostly sold in large packages to reduce the cost of individual packaging. With the continuous improvement of China's productivity level and the enhancement of consumers' purchasing power, many cities have the conditions to implement this model. Merchants gradually realized the advantages of the warehousing business model, and began some attempts. Cheap warehousing stores like Guangkelong opened one after another. At present, the most critical issue is to learn from the experience of foreign successful enterprises (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 chose the strategy of reducing advertising expenses. Generally, large department stores in the United States advertise on TV or newspapers 5-1 times a year, while Wal-Mart only advertises 12 times. Facing the American market flooded with advertisements, Wal-Mart boldly adopted this advertising strategy, and it can remain invincible for a long time, from which we can get some enlightenment: for businesses, blindly increasing advertising investment may not necessarily lead to a proportional increase in turnover. Sometimes, when advertising expenses are appropriately reduced and operating costs are correspondingly reduced, performance will also be significantly improved.

second, the new enjoyment of super-first-class service

in the retail industry, a comfortable shopping environment and good and thoughtful service are bound to be associated with higher prices; However, in chain supermarkets with low commodity prices, customers can only get discounts on shopping prices, but can't enjoy quality services. K-Mart is a famous large discount chain store in the United States. Its stores are vast, but in order to save labor costs, there are few clerks. Although there are many kinds of cheap goods on display in the store, it is not easy for customers to ask one or two shop assistants about them. Here, although customers have satisfied their desire to buy cheap goods, they don't feel that the clerk has paid a little attention to them, so there is a fly in the ointment regret in their hearts.

It is not enough for retail enterprises to establish brand image in customers' minds, and customers also want to enjoy meticulous and hospitable service while shopping. It is with this in mind that Wal-Mart attracts a large number of customers with its superb service from the customer's point of view. When you walk into any Wal-Mart store, the clerk will immediately appear in front of you, smiling. There is such a slogan in the store: "We strive to do it, and every product is guaranteed to satisfy you!" If customers feel dissatisfied with any goods they buy here, they can return them to the store within one month and get the full payment. Walton once said, "We all work for customers. You may think 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 regards superb service as its supreme duty.

In many Wal-Mart stores, such slogans are hung:

1. The customer is always right;

2. if gu Rong has 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 is the first time that Wal-Mart has made us realize that customers are always right.

The secret of Wal-Mart's operation lies in constantly understanding customers' needs, putting yourself in customers' shoes and providing customers with maximum convenience. Once, a customer went to a Wal-Mart store to look for a special paint, but the store was out of stock, so the manager of the paint department personally took the customer to the opposite paint store to buy it. Both the customer and the owner of the paint shop are grateful. Walton often says to employees, "Let's treat customers with friendliness and enthusiasm, just like entertaining guests at home, and let them feel that we care about their needs all the time. "

Third, the new concept of" one-stop "shopping

Whether customers can buy all the goods they need at once, whether they can get timely sales information of new products, whether they can enjoy additional services such as door-to-door delivery and free parking, and whether they can shop in the store at any free time ... These issues are also important signs to evaluate the quality of a store.

in wal-mart, consumers can experience the new concept of "One-Stop Shopping". In terms of commodity structure, it strives to be rich in variety and characteristics to meet the various preferences of customers. Its business projects are various, including food, toys, new clothes, cosmetics, household appliances, daily necessities, meat, fruits and vegetables and so on.

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

● Free parking. For example, the Sam store in Shenzhen has a business area of more than 12, square meters and nearly 4 free parking spaces, while another Wal-Mart shopping plaza with a business area of more than 17,8 square meters also has about 15 parking spaces.

● Wal-Mart moved the bakery into the shopping mall, and even set up the "Sam Leisure Gallery". All the delicious food and fresh cakes give customers leisure enjoyment after shopping.

● Professionals are hired in the store to consult customers about computers, cameras, video recorders and related products for free, which helps to reduce the risks brought by blind purchase.

● There is a Lancashire document processing business center in the store, which can provide customers with many services including making and copying color documents, enlarging and reducing engineering drawings, and printing at high speed.

● Wal-Mart can provide delivery service for a purchase of 2 yuan or more, and every time it goes to 49 yuan within the specified range (because the commodity price does not include delivery cost).

● In addition, Shenzhen Sam Store handles all mobile computer sales business and all models sold by the Mobile Bureau. Prices are cheaper than other agency outlets in 1 yuan; It also sells the communication products of Runxun as an agent, and collects the Taiwan fees of various models. All kinds of Chinese machines and digital machines are cheaper than other Runxun outlets in 5 yuan.

In the choice of store location, Wal-Mart also takes convenience for customers to shop as the primary consideration. In the United States, its tentacles extend to remote small towns that Sears and Kmart disdain. From Minnesota to Mississippi, from Southern California to Oklahoma, Wal-Mart is everywhere. As long as there is a shortage of cheap shops in any township, Wal-Mart will open there.

IV. Donating public welfare to build an image

In order to provide more benefits to customers, Wal-Mart tries to reduce advertising expenses as much as possible. For this reason, it puts a lot of effort into promotional creativity and strives to get the best results with the least investment. All the products promoted by Wal-Mart can always be snapped up. In the way of promotion, Wal-Mart pays special attention to the role of EventMarketin8. For example, a "Precision Shopping Float Training Team" was set up at the branch in Fairbury, California, in Nablus, and participated in the local float parade. All the players dressed in Wal-Mart uniforms and pushing floats to change formations stood out in the parade. In order to add some interest to the boring life in the community and create a happy atmosphere, Wal-Mart will regularly carry out a series of outdoor auctions, bands and circus performances to attract customers to shop. On the second Saturday of October every year, Wal-Mart will hold a "eat round moon cakes" competition in the parking lot of the Onyanta branch. This activity attracted many customers from other states to attend and watch. News media coverage has further enhanced the popularity of the competition and Wal-Mart. In addition, when Wal-Mart's stock went public, securities analysts and shareholders on Wall Street were invited to go boating in streams and camping on lakes.

Although Wal-Mart has repeatedly reduced its advertising expenses, on the other hand, it has been generous in donating money to non-profit organizations and public welfare undertakings (such as schools, libraries, economic development groups, hospitals, medical research programs and environmental protection programs).

▲ Since p>▲1983, Wal-Mart has donated $52 million to United Way charities in various states in the United States.

▲ The branch in Xiangshan City, Georgia held a pro-pig contest to raise money for charity.

▲ Since p>▲1988, Wal-Mart has raised $57 million to help children's hospitals set up "Children's Miracles" TV programs, among which it is the largest sponsor.

▲ Walton also actively funded public and private schools and set up special scholarships to help Latin American students go to Arkansas to study at universities. He also donated a certain percentage of the turnover of his own brand "Sam American Select" as a scholarship for students studying mathematics, science and computers.

However, domestic retail enterprises are rarely willing to invest in public welfare undertakings with obvious short-term direct benefits, and they are often concerned with seasonal promotion and publicity. In fact, donating to public welfare undertakings (such as Project Hope) is a long-term investment, which plays an important role in improving brand awareness and corporate image in the long run.

V. Full coverage of market segments