INTRODUCTIONWal-Mart Stores is anAmerican Corporation started by Sam Walton, in the year 1950s as a single storein Bentonville, Arkansas. The company was founded in the 1962 and wasofficially 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 thetitle of the world’s largest retailer in terms of revenue.
This growth isattributed to Walton’s branding strategy of treating the customer as a king. Wal-Mart’s popularityamong millions of people is attributes to several reasons like-· customer price sensitivity (discountsand low retail prices),· close location to customers · Stocking of a broad range of goods tofacilitate one roof shopping experience. a) Lowretail pricesSince its inception, Wal-Mart has followed its Lowretail pricing strategy.
It strives to make sure that customers save aconsiderable amount of their money when shopping for any products. Everyproduct is offered at a lower price as compared to the competitors. Wal-Marthas been very successful at using this strategy mainly by employing economies ofscale in its operations.
Wal-Mart also has discounts, coupons, and customerloyalty cards that enable one to collect points that can be later used forpurchasing goods. b) Convenient LocationMany of the Wal-Mart stores around the world arelocated in areas with high turnover. Moreover, most of its branches in theworld stock high-turnover convenience goods in addition to other services suchas gas stations. Convenient locations save customers their precious time.c) Broad Range of GoodsWal-Mart stores have broad range of goods fromfoodstuffs to electronics and clothes.
Almost every product can be found inWal-Mart Stores with different sizes, colors, and tastes. The broad range ofproducts allows customers to choose the product based on income, taste, and preferencesand thus improve the rates of satisfaction. The use of technology such as RadioFrequency Identification (RFID) and the Barcode has enabled Wal-Mart tokeep its inventory up to date, thus eliminating incidences where customers donot find the products they have come to buy.
INITIAL STEPSThe giant retailer started with greeting the customer to show customersthat they are appreciated. A greeter at the door thanked customers for comingin, they assisted them with a shopping cart, and gave a “goodbye thankyou” upon departing the store. The friendly senior citizen dressed in theblue vest conveyed warmth and personality to every guest entering or exiting aWal-Mart store.4 Key components of Relationship Marketing:Ø It has to be personalized. Personalizationcan come in the form of a highly targeted direct mail piece, a phone call oremail.
Obviously the handshake and a smile illustrated by Wal-Mart greetersalso work well in personalizing the relationship.Ø It has to be targeted. Wal-Mart investsmoney in maintaining relationships with existing customers. By targeting thisgroup, Wal-Mart establishes long-term relationships with their most loyalshoppers. Targeting customers through programs that reward loyalty can resultin big returns over the life of the customer.Ø It has to be meaningful. Your marketingmessage 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-Martgreeters learn the names of frequent shoppers. Walmart.com, a subsidiary ofWal-Mart Stores Inc.
, does a great job of asking for the relationship online byproviding special offers to those who supply their email address. It isimportant to make relationship marketing interactive so you can hear feedback,determine what is working and what is not. Data collectionWal-Mart collects 2.
5petabytes of information from 1 million customers every hour. Wal-Mart hasimplemented a data analytics system to channel the flow of information toimprove their operational efficiency and marketing campaigns.Wal-Mart -Tracking their Customer’s LifecycleWal-Mart’s success in delivering messages informed by datais largely because of innovations of Wal-Mart Labs. The research technologydivision of the company has developed a set of big data tools to connect salesdata to individual customers- Below are 3 different ways Wal-Mart drives value from theircustomer data:1) Mining Sales DataData mining helps Wal-Mart find patterns in their sales datathat can be used to provide personalized product recommendations andpromotional offers. By using a matching algorithm they discover productscommonly purchased together or purchased in a particular sequence.
The important thing about Wal-Mart’s big data program isthat it is able to correlate sales trends with external events – like what’strending on Twitter, or who just won a big football game. They even look at howlocal weather affects buying patterns. For example – In 2013, Wal-Mart labs found that strawberrypop-tarts sales increased 700% before a hurricane. Wal-Mart took action onthis event. It now places pop-tarts at the checkout line before anyhurricane.2) Connecting In-store and Online Customer BehaviorWal-Mart has customer database of roughly 145 millionAmericans – or 60% of all US adults.
Wal-Mart retrieves data from common sources like clickableactions on their website, contact information from their e-club, andPOS transactions, and also from one-of-kind programs developed byWal-Mart Labs.One program allows them to track when real-worldshoppers are looking at a product online using in-store Wi-Fi. Another programnamed- Social Genome, allows Wal-Mart to reach customers who have mentionedsomething on social media in order to inform them about that exact product andinclude a discount.Collecting information from online and in-storesources, combining and analyzing the aggregate data has resulted in a vast,constantly changing, up-to-date knowledge base with hundreds of millions ofentities and relationships.It helps Wal-Mart to properly understand the contextof what their customers are saying and doing, and gives them the subject theyneed to send tailored offers and messages at scale.3) Personalized Email MarketingWal-Mart’s extensive inventory of actionable data hasfacilitated their marketing team with incredible power in driving new revenuethrough best-in-class email marketing.
The system is far more sophisticated than their retailcompetitors- with Amazon being the only notable exception.Here are a few areas where Wal-Mart’s email programshines:a. Personalized Recommendations – According to a 2014 Industry Report, only 10% ofemails sent by the 20 largest American retailers includes a personalized productrecommendation. Moreover, 25% of the top retailers failed to send any productrecommendations.Wal-Mart is one of the rare outliers. Theyconsistently send tailored product offers based on customer behavior online andinside their stores. b.
Time of Send – Use of timing optimization has been anotherimportant part of Wal-Mart’s email success. Since 60% of email users only clickthrough emails during a single hour each day, achieving big open and redemptionrates is highly dependent on when customers receive your message.Wal-Mart tracks each campaign’s open rate andre-aligns delivery times based on individual user patters.
For example, if Iopen an email from Wal-Mart at 3:00pm, they will make sure the next email Ireceive will be sent in this timeframe.c. Subject Line Personalization – As we know, a subject line can make or breakan email campaign. A good subject line should be eye-catching and be able toinstantly establish trust. Including a recipient’s name in the subject line isthe best way to achieve both of these goals.TECHNOLOGY CRM system andRetail Link are the databases used at Wal-Mart.
CRM helps with the tracking ofcustomers, while Retail Link is a decision support system for suppliersand retailer. The brand of database software which is used is- NCR’s TeradataSoftware. It is believed to carry approximately 583 terabytes.
a) DATA-WAREHOUSEA data warehouse is alogical collection of information gathered from different operational databaseswhich is used to create business intelligence that supports decision makingtasks and business analysis activities. Wal-Mart is known for having thebiggest data warehouse used, which is larger than 4 Petabytes. For managingdaily store operations, Wal-Mart turned its data warehouse into an operationalsystem by refreshing the information that data warehouse holds every hour. Themassive data warehouse is not only for customer of CRM systems but it alsoserves as the base for Wal-Mart’s Retail-Link support system.
Teradata isWal-marts data warehouse vendor.b) DATA MARTS Asubset of a data warehouse is data mart, which only focused portion of the datawarehouse information is kept. The CEO may want to see all of the informationhe can also he may look at each section and get individual reports. OriginallyWal-Mart used data marts.
They started out with many small data marts, firstbeing IBM DB2 and the second- IBM VM/SQL. Eventually the Teradatasystem was introduced that enabled Wal-Mart to manage all of the informationinto one database so they built a big data mart. The POS table at Wal-Mart was1.2 billion records. Within a six months of this, Wal-Mart decided to turn itinto a data warehouse with several tables over 500 million rows. c) DATA MINING Data-Miningtools are the software tools that are used to query information in a dataware-house.
These data-mining tools support the concept of OLAP. OLAP is anonline application processing query. Wal-Mart uses a global leader in businessintelligence software, Hyperion. They use Hyperion Essbase OLAP technology tobuild an advanced merchandise planning and reporting system.
Hyperion’s Essbasetechnology will help Wal-Mart create a scalable system that will deliverbudgeting, forecasting and planning tools to international operations. WALMART’SSTRATEGY FOR MAINTAINING LOYAL CUSTOMERS Ø Valuing the CustomerWal-Mart looks its customer as theboss. This old strategy was developed by Sam Walton, founder of Wal-Mart. Allthe Wal-Mart associates are expected to serve the customer like their employerand make sure they meet or exceed the expectation of the customer. Suchcustomer experiences have contributed to high repeat purchases in Wal-MartStores. Ø Customized ServicesWal-Mart employees have been trainedto provide “service to customers”.
Any customer who visits Wal-Mart Stores iswelcomed by an associate who offers to guide the customer around the store. Theassociate may also offer to help customers in describing the various productspecifications. As a result, the customer may end up buying more; does a repeatpurchase or both. All of Wal-Mart strategies are meant to meet or exceed thecustomer expectations and thus earn their loyalty