Retail strategies you can copy from the corporate giant
When it comes to retail stores, the figurative elephant in the room is Walmart. This ubiquitous American super chain seems to have a megastore in every suburb of America. Some people hate Walmart, pointing to their notoriously low wages and history of driving mom and pop stores out of business. Others point to Walmart as a shining example of what an American business can and should be, citing their mastery of logistics and ability to get amazing deals from their suppliers.
Wherever you fall on this spectrum, it’s worth noting that Walmart is extremely successful. We’ll put it this way – if you’re judging a company by its sales revenue, Walmart is the most successful publicly owned company in the world, according to Fortune.com – with a revenue of $482.1 billion dollars in 2016.
If a company makes almost half a trillion dollars in a year, you can bet there are some strategies that you can learn from them. Although Walmart’s sheer size makes directly applying their business model to yours a bad idea, you can nevertheless gain inspiration from some of their tactics for your own retail store success. Here are 5 ways to do so.
#1: Pay Your Employees More Than The Market Rate
We know what you’re thinking – come on, Walmart can’t be paying it’s employees a decent wage. Right? After all, this is the company that has a reputation for cutting costs to the bone at every chance that it can.
However, that reputation may be about to change. In a highly publicized move, Walmart has started to pay it’s employees more than the federal minimum wage of $7.25 they are required by law to give. Specifically, new hires are set to receive $10 per hour after they complete onboarding and skills training, and $9 until then. Additionally, these hires have a clearer path to making $15 an hour than they did prior to the changes, by continuing to attend skills training.
Why the switch? Well, if you listen to Walmart’s PR campaign, they did it because they wanted to invest more in their employees. And while that’s probably true, there are other, more business-oriented reasons as well: Walmart’s profits had been falling.
As the New York Times states in an article titled “How Did Walmart Get Cleaner Stores and Higher Sales? It Paid Its People More“, “sales at stores open at least a year fell for five straight quarters; the company’s revenue fell for the first time in Walmart’s 45 year run as a public company in 2015.”
Outside survey agencies pointed to Walmart’s lack of stocked shelves and hard to find employees as factors. And so, Walmart executives bit the bullet (costing them $2.7 billion dollars) and upped their pay rates.
While the results of this massive “experiment” aren’t set in stone, so far have they painted a picture of optimism. Walmart store customer approval ratings, which previously had around 16% of stores meeting customer service expectations, rose to about 75%.
The moral of the story?
If your store is suffering from a lack of quality customer service, ask yourself: am I paying my employees more than the market rate? If not, that could be a potential area of improvement. The logic is simple: when employees are paid more, they work harder and are happier on the job – which leads to better service and more sales from customers.
#2: Combine Your Online and In-Store Inventory
If you currently have a separate inventory for your eCommerce side of business and for your brick and mortar retail store, now could be a good time to examine how you might integrate those two sides of your business.
Why? In a word: efficiency. When you have separate inventories and ordering/payment processors, you make it harder on yourself to get your inventory supplied.
That’s why Walmart has recently begun to consolidate the inventory buying process for its online and physical stores. As Reuters details, the giant did so for a few reasons:
- To take another step in the ongoing fight against Amazon
- To start flexing its expertise in getting the lowest possible prices in the eCommerce space
- To make buying inventory easier and more coordinated
An unnamed consumer goods supplier is quoted by Reuters as saying, “The way it operated until now was extremely inefficient for us and them….For example, they would buy 5 million cases a year for stores and 500 cases (for) online and then make us go through a different buyer for online. It was a nuisance.”
While you obviously don’t buy as much inventory as Walmart does, there’s still a lot to be said for streamlining business processes (like buying inventory) that have to be repeated over…and over…and over.
If you’re unsure of how to go about the process of streamlining your inventory ordering, schedule a free consultation with us here. We’ll show you how Agiliron can allow you to manage your online and in-store inventory in one easy to use interface. That way, you can spend your time where it counts – on growing your business.
#3: Start Offering Online Ordering and In-Store Pickup
Many of Walmart’s recent business moves have been efforts to up the ante against Amazon. The two companies are currently in an “arms race” to see which one can conquer the other’s territory first.
Will Amazon develop physical locations to rival Walmart? Or will Walmart upgrade its online offerings to be better than Amazon? Only time will tell. However, along the way, other retail stores can benefit from seeing the experiments Walmart tries out on the market.
Case in point, Walmart has been offering in-store pickup of online grocery orders at some of its stores. Customers can buy from pretty much all of Walmart’s areas of merchandise, except for automotive supplies. Walmart has offered in-store pickup of non-food items for quite some time, but this is the first time that grocery items have been included.
While there’s a $30 dollar minimum for the service, there’s no extra fee added on for the convenience. Give Walmart credit for seeking a competitive advantage by making the lives of their customers easier. While you probably don’t offer groceries at your retail store, consider how you can make your customers in-store experience through the use of the internet.
For example, if you’re a clothes retailer, maybe you can have your customers use your website to pick out a few items of clothing they’d like to try on when they get into the store, or maybe they can fill out a short form telling you their sizes and style preferences.
#4: Give Customers A Kickin’ Reason To Come Into Your Stores
Walmart has been bringing bulls and professional bull riders to some of its stores in the past year, in an effort to offer “retailtainment” that will drive more customers into their aisles.
Though no bull riding occurs (strangely, they don’t have room for that in Walmart’s store layout) there are live bulls and the riders sign autographs for interested customers.
Explaining the move, Walmart Chief Marketing Officer Tony Rogers is quoted in a Business Insider article, stating, “Just as the world is becoming more digital, a lot of our customers are craving for a more physical, real experience, and a live retail experience.”
Obviously, bringing bulls and rodeo stars into your retail store probably isn’t a good fit for your business. However, the idea still stands: how can you entice people into your store through exciting events? If people are in your store, having a good time, there’s a great chance they’ll spend more money than they would otherwise.
#5: Know Your Niche, And Stick To It
You might object to this last lesson, thinking, “Wait a minute. Walmart doesn’t have a niche! I mean, they sell everything for crying out loud. The only thing they offer is… really low prices.”
And that, my friend, is Walmart’s niche. Through massive economies of scale, cost cutting efforts, great deals with suppliers, and excellent logistics, Walmart has created a national image around “Always low prices”.
However, it’s unlikely that you’ll want to use that niche for your business. After all, price cutting as a way to differentiate yourself is often a pretty dangerous long term strategy. Just because it worked for Walmart doesn’t mean that it’ll work for you.
However, what you SHOULD do is:
- Know what your store is good at in the eyes of your customers
- Double down on those strengths
- Feature those strengths in all of your marketing
For example, maybe you’re an automotive shop that frankly has the best tire changing service at the best price around. Feature that online and in your store. Tell your customers about it.
Or maybe you’re a beauty supply store that has the most extensive collection of foot care products in town, as well as very knowledgeable staff in that area. Make use of that!
Walmart is a retail juggernaut. Many things that work well for them would be bad practice on a smaller scale.
However, as self-development author Tony Robbins says, “Success leaves clues.” And Walmart’s unprecedented success offers many lessons that you can use to help make your brick and mortar retail store thrive and continue to do so for years to come.
Even if you can’t copy these strategies directly, they can be an inspiration for your own ideas on how you can make your brick and mortar store stand out.Tags: business lessons, business success, growing business, retail, Sales Strategy